The banking industry is calling for assistance from the federal government and social media platforms to combat the growing problem of online romance scams, which are costing Americans billions of dollars each year. These scams have become more prevalent since the pandemic, with criminals posing as attractive partners and targeting lonely individuals on social media.
According to Paul Benda, the executive vice president for risk, fraud, and cybersecurity at the American Bankers Association, it is crucial for social media companies to take action against these scammers and for law enforcement to prosecute them. Benda emphasizes that unless the culprits are held accountable, they will continue to exploit vulnerable individuals.
Experts estimate that the known instances of fraud amount to billions of dollars annually. However, considering that many victims do not report their losses, the overall losses could be in the tens of billions of dollars each year. These romance scams are orchestrated by organized criminal networks, often based in Southeast Asia, who create fake social media profiles to connect with potential victims in the United States. The victims can be of any gender, age, or educational background; the common factor is their loneliness and willingness to engage online.
Once a victim responds to a message from a scammer, the scammer initiates a prolonged campaign to convince the victim that they are in a genuine romantic relationship. This can involve hours of texting each day, creating a deep psychological connection. Some individuals become hooked within a matter of weeks due to the intensity and constant communication.
Once the emotional hook is established, the scammer transitions the conversation to money. They may present investment opportunities or exploit the victim’s empathy by requesting funds for a phony medical procedure. In some cases, victims have drained their entire bank accounts for scammers they believe they are in love with. Benda describes these scammers as “evil people taking advantage of vulnerable individuals.”
Experts believe that social media companies should do more to prevent these scams on their platforms and take down the major perpetrators. They also suggest regulatory changes that would allow financial institutions to share information about at-risk customers. Currently, victims may deplete one bank account to send funds to a fraudster while their other accounts remain unaware of the situation.
Banks face a challenging position when they suspect their customers are being defrauded. While they are legally obligated to provide access to funds, they cannot prevent customers from withdrawing money, even if it will harm them financially. This creates a dilemma for banks, as they are unable to intervene even when they believe the customer is making a grave mistake.
Banks generally do not reimburse customers for losses incurred through romance scams because the customers willingly transferred the money. Reimbursement would likely attract more scammers, creating a larger market for these fraudulent activities. Erin West, a deputy district attorney in Santa Clara County, California, estimates that between $30 billion and $50 billion was lost to romance scams in 2022. However, she notes that arriving at an accurate estimate can be challenging as victims are often reluctant to report their financial humiliation.
The emotional toll of these scams can be devastating, resulting in broken marriages, lost careers, and permanent financial setbacks. West, who is part of a national group of prosecutors addressing this issue, explains that the loss experienced by victims is profound. Discovering that their entire life has been upended in a single day can lead to deep despair.
Loneliness plays a significant role in why individuals fall prey to these scams. West explains that the desire for love and companionship is fundamental to human nature. Scammers prey on this need by providing victims with affection and attention. They also offer the illusion of financial security, promising a life of comfort and luxury. It is important to recognize that victims are not driven solely by lust or greed but also by the desire for emotional connection and stability.
In conclusion, online romance scams have become a widespread problem, costing Americans billions of dollars each year. The banking industry is urging the federal government and social media platforms to take action against these scams. It is crucial to shut down the perpetrators, prosecute them, and implement regulatory changes that allow financial institutions to share information about at-risk customers. By addressing this issue collectively, we can protect vulnerable individuals from emotional and financial devastation caused by online romance scams.
