InvestSMART

Paul's Insights: Romance scammers pocket $29 million

If Cupid's arrow missed you on Valentine's Day, be wary of strangers declaring their love online.

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.

 

Photo by Brooke Lark on Unsplash

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