The Financial Conduct Authority (FCA) found examples of banks
going to significant lengths to protect those at risk of romance
fraud. But the regulator also uncovered missed opportunities to
prevent these scams, which cost victims £106 million last year.
One of the cases the FCA reviewed involved a victim losing more
than £428,000.
Romance fraud is a growing financial crime, with cases rising by
9% last year. Victims are deceived into sending money to
fraudsters who engineer false romantic relationships or
friendships. Over eight in 10 cases (85%) start online,
particularly through social media and dating websites, suggesting
platforms have a critical role to play in preventing fraud and
reducing harm.
In its romance fraud review published today, the FCA has set out
measures banks and other payment firms can take to protect their
customers. These include better detection and monitoring systems,
staff training, early identification of signs of vulnerability,
and compassionate aftercare.
Key findings:
- Intervention and prevention are made difficult for firms
because victims may be ‘under the spell' of the fraudster and
reluctant to accept they are being defrauded. In nearly half
(42%) of the cases the FCA reviewed, victims did not disclose the
true reason for making a payment when asked.
- Despite examples of good practice, there were multiple
instances of firms missing opportunities to identify seemingly
suspicious transactions. This indicated that firms could
calibrate their monitoring systems to be more effective.
- A key area of improvement is for firms to ensure their staff
are trained to spot red flags and critically probe customer
explanations. This was not consistent across all firms.
- Many firms are providing a high-level of support,
occasionally exceeding the FCA's expectations, through
compassionate and tailored engagement, although this wasn't
consistent across all firms.
Steve Smart, executive director of enforcement and market
oversight at the FCA, said:
“Romance fraud is a vicious crime. All too often it is the
vulnerable that fall victim. The impact – financially and
personally – can be devastating. We recognise the challenge banks
and payment firms have in combating this complex crime and this
review aims to help them stay one step ahead of the criminals.
“We also all need to be on guard so we can protect ourselves and
loved ones by recognising the romance fraud red flags.”
In one case in the FCA's review, the victim made 403 payments to
a fraudster over the course of a year, resulting in losses of
over £72,000. The firm's investigation acknowledged that it had
not identified the sustained, out-of-character activity.
Another case involved a victim telling bank staff they intended
to send cryptocurrency payments to Iraq, claiming it was the only
method accepted by their ‘partner' in the military.
The FCA also saw positive examples of banks and payment firms
going above and beyond. One firm made 11 calls over a six-week
period to support a victim, demonstrating a commitment to
breaking the fraudster's hold and restoring customer confidence.
Another responded with care to a victim who had recently divorced
and was supporting a child undergoing cancer treatment. They
proceeded to closely monitor the victim's account.
Romance fraud red flags:
- Alarm bells should ring if someone you've only met online
asks for money or suggests investments. Never send money (or
crypto assets or vouchers), no matter how sad their story.
- Look beyond the online profile. If someone asks you for lots
of personal information, yet is unable to meet in person, then
that could be a red flag. And use image checkers to see if their
pictures can be found elsewhere.
- Get a second opinion from a family member or friend if the
other person's behaviour seems suspicious and you are being asked
to make financial commitments you aren't comfortable with.
- If you think you've fallen victim, report it to Action Fraud
or Police Scotland if you live there. Speak to your bank as you
may be able to get a refund of money you've sent – up to £85,000
– and it can help to prevent further losses.
ENDS
Notes to editors
- The FCA reviewed a sample of 6 firms, including retail banks
and payment firms - some well-established and others newer to the
market.
-
Figures from City of
London Police show that more than £106 million was lost to
romance fraud in the UK in the 2024/25 financial year. It is
estimated that, on average, victims lost £11,222 each.
- Report scams to Action Fraud on 0300 123 2040 or via its
website. If you live in
Scotland, you should report to Police Scotland by calling 101,
or contact Advice Direct Scotland on 0808 164 6000.
- The FCA enables a fair and thriving financial services market
for the good of consumers and the economy. Find out
more.
