Romance fraud, vulnerable victims and missed red flags
Head of Investigations Tony McClements tells us what the FCA’s review really means for banks and investigators in the UK.
The core message is simple: romance fraud is not merely “embarrassing”, it is serious organised crime, and banks and law enforcement need to rise to the challenge.
As a retired fraud squad detective plying my trade in the private sector, I’ve spent several decades investigating all manner of despicable frauds. I have seen companies go bust, people lose their homes and livelihoods, and in several instances even being driven to suicide by fraud. But for too many, this is still seen as a victimless crime.
Perhaps one of the most upsetting types of fraud is “romance fraud”. This scam has come back into focus due after the UK’s FCA identified weaknesses in the banking sector where red flags have been missed.
Professional fraudsters are extremely intelligent and cunning. In many instances they have been successful business people. Sometimes they’ve acted out of desperation or simply succumbed to temptation. We saw this during the COVID pandemic, when the compensations systems and loans were exploited by people who ordinarily would never have considered themselves to be dishonest.
Romance fraudsters are different. They are perhaps the most despicable of crooks, in that they deliberately target the most vulnerable: those with special needs, who have been widowed, the recently divorced, and those with physical disabilities (such as the deaf community).
Bank branches
Those of us old enough to remember truly local banking will recognize concurrent a shift that the FCA can only hint at.
When bank branches sat on town and village high streets, customers and bank staff were often on first-name terms. The manager knew who had just been widowed, who had recently retired, who rarely travelled – and a request for a sudden overseas transfer or a large cash withdrawal would feel wrong long before it tripped an algorithm. The demise of local branches has put a stop to this early warning system.
I dealt with one harrowing case where an elderly lady, living on her own but with ample family support, fell for a handsome American soldier online during one of the Middle East conflicts. A family member approached the police due to the significant sum of money she had willingly handed over to her new beau, only to find that he’d disappeared once her money had run out. She had lost her life savings, and the family had lost their inheritance.
The core message is simple: romance fraud is not merely “embarrassing,” it is serious organised crime, and banks and law enforcement need to rise to the challenge.
The case was so moving I asked the press office to alert the public (yet again) to the tale and the dangers of romance fraud. Not only did the story gain traction locally, but the national media, including the BBC and other national broadcasters, also picked it up. We arranged an interview with the victim where her face and voice were disguised, with yours truly warning the viewers of the tactics the fraudsters employed.
I am therefore grateful to the FCA for grasping this particular nettle again. The romance scam in question led me up several dead ends. The culprits were traced to West Africa, the money disappeared once transferred electronically across several jurisdictions, and we received no help from the African state concerned – exactly as those of you reading this would expect.
The one good thing that came out of this case was that the Lancashire Deaf Society (LDS) approached me to discuss similar problems their members were experiencing. Many relied heavily on their computers for communication.
This left them extremely vulnerable to online scams and explained why, in comparative terms, the deaf community might have been over-represented as victims in these scams. Digital channels have increasingly been substituted for face-to-face interaction, as traditional telephone-based scams are often ineffective at targeting these groups.
After several meetings with the LDS, we floated the idea of reaching out to the deaf community using a YouTube video. LDS believed that this would be an effective way of getting the message across to their own scam victims. I was appalled to learn that many local victims had not reported their crimes to the police due to their disability, and the complications that may have arisen in doing so.
The film Watch Out! Scam Awareness in BSL became a family affair on our side, featuring the head of the Fraud Squad (also soon to become my wife) and filmed and narrated by my son. The video has now been viewed across the globe and it was a success. Coincidentally, Action Fraud, the UK’s central fraud reporting agency, also picked up on the video and wrote and published its own article.
Stark numbers
The FCA is thus right to keep pressing this particular button. It has recently set out stark numbers: a nine percent increase in reported romance fraud in 2024/25, over £106m ($142.7m) in losses, and cases ranging from £100 ($134) lost to over £428,000 ($576.2m). More than 85% of cases start online, mainly via social media and dating platforms.
For those of us working in financial crime and the regulated sector, the FCA’s accompanying multi-firm review, Combating romance fraud – prevention, detection and supporting victims is not just another document to file under “good to know.” It should be treated as a playbook for banks and investigators alike.
As Steve Smart of the FCA put it: “Romance fraud is a vicious crime” that disproportionately affects vulnerable customers. When a regulator uses such language, investigators should take note.
The core message is simple: romance fraud is not merely “embarrassing”, it is serious organised crime, and banks and law enforcement need to rise to the challenge.
