Exploiting a romantic relationship for financial gain is one of the oldest fraud schemes in the books and thanks to new banking technologies, this method, also known as sweetheart scamming, has taken on a new life.
Today, according to a new report by Guardian Analytics, all it takes is a little bit of time, sweet talking and a mobile device and in a few steps a criminal can simultaneously break a victim’s heart and bank account from anywhere in the world.
Step No. 1: Find ‘romance’
Criminals begin a sweetheart scams by romancing an unknowing victims-to-be, gaining their trust and making promises of love and new lives together. At this stage, no mention of money.
While victims can be anyone, these schemes most commonly target the elderly and young on social media networks or online dating websites. In today’s digital world, a criminal no longer needs to be in face-to-face “relationship” with their victim.
This is typically the longest part of the scam process, but from the criminal’s perspective, it’s worth it, according to John Breyault, director of the National Consumers League’s fraud center.
“Scam artists spend significant time and energy to convince their often-suspicious victims that they are in a real romantic relationship,” he told Fraud.org. “Love is a powerful emotion that these criminals manipulate to extract large sums of money from their victims.”
Step No. 2: Plea for help
Once a fraudster gains a victim’s trust, up pops a problem only money — the victim’s money — can cure.
“My mother had a stroke and I can’t afford to see her.” “I want to see you, but I’m too broke to make the trip.” It may start as small requests here and there, but that’s only the beginning. The ultimate goal is to gain access to a legitimate bank account under the victim’s name so the criminal can move money around without having to explicitly hack into an account.
Step No. 3: Establish remote control
Once account credentials are in hand, the criminal then sets up mobile banking for the account, making sure the ability to use a mobile device for remote deposit capture is available. Remote deposit capture enables fraudsters to take a picture of a check and submit it for deposit virtually without having to be physically present at any time.
Step No. 4: Make the desired transactions
Using remote deposit capture, the fraudster then deposits stolen or counterfeit checks into the victim’s account. The crook may also ask the victim to transfer money from another outside account to the compromised account.
Either way, the objective is to get funds into the victim’s account using legitimate pathways, even if the funds aren’t legitimate themselves, so the criminal can continue to fly under the financial institution and victim’s radar.
Step No. 5: Wait for the all-clear
A time-sensitive waiting process then begins. Access to mobile banking tools helps the criminal keep an eye on the processing deposit or transfer transactions. As soon as the transactions clear, the criminal can complete the scam.
It’s likely the transactions will clear, even if the financial institution has to confirm the deposited checks with the legitimate account holder, according to Wesley Wilhelm, a lead fraud expert at anti-money-laundering service company NICE Actimize. Emotions still outweigh logic at this point.
“In these cases, the victim frequently has some doubt about the checks,” he said. “But they go through with the transactions anyway because of the trusted relationship they think they have developed.”
Step No. 6: Take the money and run
Once the transactions have cleared, the criminal has a few options for retrieving the fraudulent money:
- Ask the victim to send a debit card so cash can be withdrawn from an ATM.
- Request that the victim send the money directly via a wire transfer or other third-party money transfer service.
- Have the victim transfer the funds online to an account controlled solely by the criminal.
Since the victim is the one that has to agree to and initiate any of these options, it’s hard for the financial institution to tell a scam is in progress until the criminal gets the money and disappears — and the victim complains.
“We have seen examples of the bank calling their customer to verify a certain wire transfer or cash withdrawal and the accountholder confirms the activity, so the bank lets it happen,” said Craig Priess, President of Guardian Analytics. “Then, a week later, the accountholder realizes they’ve been duped and it’s too late.”
The FBI investigates and collects data about romance fraud schemes, so if you believe you’ve been seduced by a sweetheart scammer, file a complaint with the FBI’s Internet Crime Complaint Center.