Warning on Romance Scams in the UK
Britain’s financial regulator has raised concerns about banks not doing enough to tackle the rising issue of romance scams, which have surged almost 10% over the past year.
On Friday, the Financial Conduct Authority (FCA) revealed that it found “multiple instances” where banks and payment companies failed to detect suspicious transactions. They released a review based on the actions of six firms, noting that these scams are “increasing in scale and complexity.” Victims across the UK lost £106 million to such scams in 2024, with one individual losing over £400,000.
Romance scams typically manipulate a person’s emotions, tricking them into engaging in a fake relationship. Once trust is established, the scammer often makes various excuses for not being able to meet and eventually concocts a detailed story requiring money to be sent.
One case from the FCA’s investigation involved a victim who asked a bank to transfer cryptocurrencies to Iraq, claiming it was the only payment method accepted by his military “partners.” Despite clear indicators of potential fraud, such as screenshots of conversations, bank staff proceeded with the transaction.
The FCA has proposed several measures aimed at helping banks and payment companies enhance their defenses against these scams. This includes training staff to recognize warning signs and closely assess customer accounts, as many victims don’t divulge the true nature of their payments.
However, the FCA pointed out that some companies failed to provide adequate protection for customers even after fraud was confirmed, despite visible signs of distress, including suicidal thoughts in one case and threats from the scammer in another.
Research by Lloyds Bank indicates that the issue is especially pressing for individuals over 55, with a 52% increase in romance scams in that age group over the past year. Additionally, scams targeting those aged 35 to 44 have risen by 20%.
The regulator encouraged banks to create avenues for customers to disclose vulnerabilities, suggesting the development of dedicated sections in mobile apps for this purpose.
It’s worth noting that 85% of romance scams begin online, especially via social media and dating sites. The FCA emphasized the critical role these platforms play in reducing harm.
Rocio Concha, Director of Policy and Advocacy at Which?, stressed the importance of holding both banks and social media companies accountable. He urged regulators to take decisive action against banks that are not meeting standards and highlighted the necessity for Ofcom to investigate how these platforms are operating, particularly since many scams initiate on social media and dating apps, which fall under the Online Safety Act.
