Paul's Insights: Romance scammers pocket $29 million
Last year, Australians reported 4,000 dating and romance scams to consumer watchdog, the ACCC. A total of $29 million was lost to these scams, with victims being cheated out of an average of $19,000 – figures that are believed to be the tip of the iceberg.
It’s easy to wonder how people get caught up in these scams. But the ACCC say a growing number of victims weren’t even looking for a relationship. Plenty were just engaging in social media or, surprisingly, online games.
Beyond traditional online dating websites, the highest losses from romance scams originated on Instagram and Facebook. Conventional dating platforms like Tinder or Match.com also had high losses in 2019.
However, a new trend is that scammers are turning to online games such as Words with Friends and Scrabble to con their victims.
There are some classic warning signs to look for that you could be dealing with a scammer. The ACCC says they try to make their target fall in love with the persona they have created, while quickly professing their love for the victim.
That’s normally followed by complicated stories about why the scammer can’t meet in person. It’s when the scammer starts to ask for money – for whatever reason, that the warning bells should really start ringing.
The requests for money don’t always involve hard cash. Scammers are open to other options. Close to $9 million was lost by payment methods like iTunes, Steam and Google Play gift cards.
The main point is that if you send money, the scammer asks for more, often using guilt to get you to dip further into your wallet.
These scams are not new. Yet people continue to fall for them, and are left worse off financially, with a few emotional scars to show for the experience.
That’s why a healthy dose of skepticism goes a long way when you’re online. Never lose sight of the possibility that your new online buddy could be a crook.
Some simple steps can help protect you, and your money.
Don’t give out personal information – especially your financial details – to someone you haven’t met in person no matter who they say they are. If the conversation swings to requests for money, the solution is easy: Stop communicating with them.
Discovering that your new heartthrob is a fake can be demoralising. But that may be a lot less damaging than being fleeced thousands of dollars – money you will never see again.
Paul Clitheroe is Chairman of InvestSMART, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.
Frequently Asked Questions about this Article…
Romance scams are fraudulent schemes where scammers create fake personas to build romantic relationships with victims, often leading to financial loss. Everyday investors can be affected by these scams as they may be targeted on social media or online games, resulting in significant financial losses.
Last year, Australians reported losing a total of $29 million to romance scams, with the average victim losing around $19,000. These figures are believed to be just the tip of the iceberg.
Most romance scams originate from social media platforms like Instagram and Facebook, as well as traditional online dating websites such as Tinder and Match.com. Surprisingly, online games like Words with Friends and Scrabble are also becoming popular platforms for scammers.
Warning signs of a romance scam include the scammer quickly professing love, creating complicated stories to avoid meeting in person, and eventually asking for money or gift cards. If someone you haven't met in person starts requesting money, it's a major red flag.
Scammers often ask for money through various methods, including direct cash transfers or gift cards like iTunes, Steam, and Google Play. They may use emotional manipulation or guilt to persuade victims to send more money.
To protect yourself from romance scams, avoid giving out personal or financial information to someone you haven't met in person. If the conversation turns to money requests, stop communicating with the person immediately.
A healthy dose of skepticism is crucial when interacting online because it helps you remain cautious and aware of potential scams. Recognizing that your new online acquaintance could be a scammer can prevent financial and emotional harm.
If you suspect you're being targeted by a romance scam, cease all communication with the individual immediately. Do not send any money or personal information, and consider reporting the incident to authorities or consumer protection agencies.