Romance scams are rising: What we’re seeing on the front lines

As a fraud manager, I have handled financial crimes for years. Typical cases follow a familiar pattern: a compromised credential, a suspicious merchant and an account takeover. Romance scams are different. They are often authorized payments. A member is moving money on purpose, convinced that the person on the other end is real and the request is legitimate. This creates an even bigger challenge for financial institutions, as they have to be able to interrupt a carefully crafted emotional manipulation without embarrassing or shaming the member. 

What we have been seeing is consistent with what regulators and law enforcement have been warning for many years; romance scams are increasing in frequency, the losses are severe and the damage is not just financial but emotional as well.

The Federal Trade Commission reports that Americans lost more than $1 billion to romance scams last year. However, these figures only capture reported losses. Many victims never file a report or tell their financial institution due to shame or embarrassment, suggesting the actual impact is significantly higher.

The following member stories have been modified, with certain identifying details altered to protect member privacy.

Recently, our monitoring systems flagged a member's account for unusual outgoing wire activity. The member explained she had met someone on a dating platform. The individual, claiming to be an American businessman traveling abroad, expressed interest in building a future together and proposed sending her money to invest in cryptocurrency on their behalf.

What made this case particularly complex was the involvement of a third party, the scammer's supposed "secretary," who was directing the logistics and providing wiring instructions. In reality, this “secretary” was actually another victim—a recent widow who had liquidated assets and was transferring approximately $175,000. The scammer had convinced this widow that the funds were needed for someone's life-saving medical treatment. The member, believing she was facilitating an investment for her relationship's future, wired money to accounts controlled by the scammer.

When I contacted the member and raised concerns, she was initially resistant. That response is common. The conversation focused on the pattern of activity, the involvement of third parties she'd never met, payments involving wires and cryptocurrency and a  third party who was routing the payments and pushing urgency, all significant red flags.

After confronting the individual, he ceased all contact immediately. The member, at the recommendation of the credit union, has since implemented additional fraud prevention tools and reports that other individuals have attempted similar approaches.

In another case, a member was contacted through social media and quickly moved to an encrypted messaging app. The person claimed to be a U.S. military service member deployed in an overseas war zone. The member and the scammer were soon engaged in an online romance.

The scammer created escalating urgency by claiming his life was in immediate danger. He sent photographs to prove his situation including images that showed him in hospitals and combat zones. He requested funds for medical expenses, transportation and airline tickets to return to the United States. Each request was framed as a life-or-death emergency requiring immediate action.

The member wired money multiple times and was warned by the credit union that this was a scam. It wasn’t until losing a significant amount of money that the member recognized the deception. She attempted to recall the funds, but they had already been moved through multiple accounts and were unrecoverable. Subsequently, she discovered numerous online accounts documenting identical scenarios, the same script replicated across thousands of victims. The photographs he provided were stolen from actual service members.

Here are warning signs that financial institutions and consumers should recognize:

Scammers quickly move conversations from dating apps and social media to encrypted messaging platforms where there's minimal oversight and no algorithmic detection of suspicious behavior.

Video calls are refused, repeatedly canceled or appear suspicious. In-person meetings are delayed due to travel, deployment, family emergencies or business complications.

Expressions of commitment or love occur within days or weeks to establish emotional investment.

Every request for money is tied to emergencies and deadlines: medical crises, legal complications, travel problems or time-sensitive investment opportunities. 

Scammers prefer wire transfers, gift cards, cryptocurrency, and peer-to-peer payment because they're difficult or impossible to reverse.

Educate members with practical, specific steps. Financial institutions play a critical role in prevention, but individual vigilance is essential.

When members realize they've been victimized, the recovery process is complicated.

Victims should act immediately:

While recovery isn't always possible, quick action can make a difference. But these victims must also be cautioned about the risk of being targeted again by “recovery scams” by individuals or fake firms that promise to get the funds back for a fee.

Financial institutions must balance fraud prevention with member dignity. These conversations require training in technical fraud indicators and empathetic intervention. The language we use matters significantly. “This is a scam” can feel like “you are foolish” and it’s much better to describe patterns and risks. Victims are experiencing sophisticated psychological manipulation, not demonstrating poor judgment.

At SchoolsFirst FCU, our approach focuses on clear, actionable guidance during highly emotional situations. This includes immediately halting pending payments, documenting relevant activity, filing appropriate reports and exploring potential recovery options through payment networks or recipient institutions.

Advanced fraud monitoring systems provide essential detection capabilities. However, the human element, the staff member who notices unusual patterns, asks appropriate questions, and responds with professionalism rather than judgment, often determines whether intervention succeeds.

Romance scams exploit fundamental human needs for connection and trust. The sophistication of these operations continues to evolve, with scammers adapting to detection methods and leveraging new technologies and platforms.

Financial institutions must maintain vigilance through ongoing staff training, updated monitoring protocols, and proactive member education. Institutions must provide technological safeguards and human support, a combination that offers the most effective defense against these crimes.

The members we work with often express disbelief that they became victims, but these scams succeed because they're professionally executed psychological operations. Recognizing that reality is essential for effective prevention and appropriate institutional response.