Welcome to the second installment of our “Scam Likely” series where we blow the lid off recent scams, frauds, and other financial crimes. In our first post, we examined the growing threat of bank impersonation scams and the staggering financial losses caused by fraud each year. In this second installment, we shed light on so-called “romance scams.” These scams have been around for some time, but new technology is making them more and more convincing (and effective) every day – love is a battlefield.
The Set Up
It starts quietly: your customer meets someone through a dating app, social media, or even a casual “wrong number” text. The conversation moves quickly from small talk to daily exchanges. The new love interest always has a good reason they cannot meet in person—they are deployed, working on an oil rig, or stationed overseas—but they are attentive, affectionate, attractive, and very good at making the customer feel uniquely understood.
By the time the story reaches the bank, weeks or months of emotional groundwork have been laid, and the customer’s relationship feels more “real” to the customer than any red flag the bank might raise. We have encountered many banks that, despite their efforts, simply cannot convince their customer that they may be falling victim to a scam.
The Actors
On one side is a fraudster (often part of an organized group) armed with scripts, stolen photos, and a practiced backstory designed to generate trust and sympathy. On the other side is your customer, who may be financially competent but emotionally vulnerable—widowed, recently divorced, isolated, or simply lonely—and who is convinced they have found a genuine partner. When asked about their relationship, your staff come across as the prying skeptic sticking their nose into the customer’s personal life. Problematically, now your bank has actual knowledge that your customer is at risk – many consumer advocates argue the bank now has a duty to act.
The Grift
Once their fake relationship is secure, the financial ask arrives: a medical emergency, a customs holdup, a frozen account, an investment opportunity, or money needed to finally travel and meet in person. The payment channels are familiar—wires, online transfers, P2P apps, gift cards, and cryptocurrency. In many cases, your customer is often coached on what to say if the bank asks questions.
From the bank’s perspective, the warning signs tend to be transactional and behavioral: sudden large or international transfers, liquidation of savings, multiple high‑risk payment methods in quick succession, large cash withdrawals, and a customer offering vague or scripted explanations about who is being paid and why.
The Pain
When the scam is finally exposed—by a relative, law enforcement, or a persistent banker—the losses are often significant, and the emotional damage is profound. Customers may feel embarrassed and betrayed and then experience a second shock when they learn that because they authorized the transfers, even though they were misled, reimbursement options can be limited under most consumer protection frameworks. For example, if the customer was tricked into voluntarily sending money to the scammer, Regulation E protections usually will not apply.
On the other hand, however, if the customer was tricked into providing his or her debit card number to the scammer, the customer may have recovery options available. Banks are left to explain what can and cannot be done to attempt recovery, manage expectations around liability, and preserve a relationship with a customer who now feels victimized by both the scammer and the system. In some cases, banks will “eat” the loss and reimburse their customer despite the fact they may not be legally required to do so (e.g., to save the customer relationship, etc.).
The Reality
For banks, romance scams underscore a difficult reality: by the time an unusual payment hits the queue, the emotional momentum is usually on the scammer’s side, and the law may treat the transfers as authorized despite the underlying manipulation. The only winner in that scenario is the scammer. With that in mind, institutions can materially reduce harm by training frontline staff to recognize romance‑scam patterns, building targeted warnings and friction into high‑risk payments, and using customer‑facing education to normalize questions about online relationships before funds leave the account.
Further, many fintech companies are using AI to build profiles about customer behavior in an effort to flag potential scams in real time. The most effective response blends clear communication and education with a healthy dose of empathy for customers whose “too good to be true” romance turned out to be exactly that.
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This article is provided for informational purposes only—it does not constitute legal advice and does not create an attorney-client relationship between the firm and the reader. Readers should consult legal counsel before taking action relating to the subject matter of this article.
