Romance Baiting: Romance Scam meets Investment Fraud

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What are romance baiting scams?

Romance scams – or online dating scams – have been around for a long time. Preying on people’s loneliness, romance scammers impersonate individuals looking for love on dating sites by using fake or stolen identities. Once an innocuous connection is established, they often shower their victims with affection – a process known as lovebombing – in order to breach their defences and gain their trust. Once they have achieved this, fraudsters will then pressure their target to send money under the pretext of an emergency. Often, the scammer will pretend to be abroad, working on an oil rig, in construction or the military. They then say they are caught up in an accident, crime or harassment by local authorities. Victims might be suspicious, but scammers emotionally manipulate them by appealing to their feelings of love and compassion. When they realise the con, it’s already too late!

Romance baiting scams are a new variation of these romance scams, according to the Australian Competition and Consumer Commission (ACCC). To begin with, scammers use the same methods (dating sites) to connect with victims under the pretense of romance. Instead of asking for money, however, they casually mention lucrative investment opportunities they are involved in (the bait). Once the victim takes the bait, the fraudsters hook them using tried and tested investment fraud methods, usually involving cryptocurrencies. It’s only when it’s too late that victims realise that their hard-earned money and object of desire have vanished together! Let’s look at how this works in some more detail.

Anatomy of a romance baiting scam

The following is a typical example from one of many romance baiting scam victims who have contacted us for help over recent months. We have used pseudonyms and removed all identifying details in order to preserve victims’ privacy. After connecting on a popular dating app, John and his match messaged back and forth about their interests and hobbies. They developed an easy rapport and John enjoyed their exchanges. His match casually mentioned that she had been learning about crypto trading from a relative and had been quite successful in a short period of time. Soon, she invited John to try it out for himself, under the guidance of her relative.

Despite some hesitations, John agreed to an initial capital investment of USD2,000, which felt a safe enough amount for him. As is often the case with investment fraud, John got a quick “win” on his initial investment. Feeling confident due to the immediate success and further encouraged by his match, John then ploughed in more money. Soon afterwards, problems started to emerge with trades that required additional deposits in order to win back “lost” funds.

Throwing good money after bad

After more deposits, John’s match pretended to help by connecting him to her relative via an encrypted messaging app. This resulted in more “wins” but when John then tried to withdraw his funds, he hit a roadblock. According to the trading platform, he had made a mistake that had triggered a money laundering alert. The only solution was for John to deposit further funds to “free” his money. Wracked with doubt, John hesitated but his match assured him that she had successfully and routinely navigated these challenges before.

After thus “unlocking” his account, John tried to again withdraw his money. However, he was hit with a demand to pay 20% income tax to the trading platform first. Following further reassurances from his match, John paid the amount as he was desperate to get his money back. When withdrawing his money failed once again, John finally realised that he had been the victim of a scam. His “match”, her “relative” and the “trading platform” were all part of the same scam. By now, he had lost more thanUSD150,000 of mostly borrowed money!

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How serious are romance baiting scams?

According to the ACCC’s recent Targeting Scams report (see infographic below), with $131 million romance scams in general caused the second-most financial losses in 2020, after investment scams and business email compromise. While men were more likely to be victims of investment scams, women reported the highest losses to romance scams. In addition, people with disability suffered disproportionate losses due to romance scam. It made up half of all losses for this group!

The ACCC identified romance baiting as a new type of scam that arose in 2020 to particularly target younger people, a section of the population that has not typically suffered high losses to investment scams in the past. While older people are usually the targets of romance scams, 25-to-34-year-olds lost the most money to romance baiting. In 2020, it totalled a whopping $7.3 million as well as plenty of heartache!

How can I protect myself from a romance baiting scam?

Fortunately, authorities like Crimestoppers and the FBI provide some guidance for how you can protect yourself from romance baiting scams. Firstly, be mindful of what personal information you share via social media and dating sites. Secondly, do an image search of your admirer to see if they really exist or have used similar details elsewhere. Note, however, that while this is a useful first step, it isn’t always conclusive. Thirdly, beware if your match makes continual excuses not to meet in person or use video chat. Fourthly, talk to people with your best interest at heart, such as friends or family, before making any investment decisions. Most importantly, never send money to, or invest with, a match you have never met in person!

 

How can Cybertrace help?

There are several ways in which Cybertrace can help you. If you are unsure whether a person you have matched with is real, Cybertrace can confirm their bona fides. And if you have already been a victim of a romance baiting scam, don’t despair (or be embarrassed)! Cybertrace has vast amounts of experience and expertise in tracing cryptocurrencies and works with law enforcement and asset recovery companies. Contact Cybertrace’s team of experienced investigators today to discuss how we can help you!

 

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