Romance scams predicted to rise significantly in 2024

As Valentine’s Day approaches, the allure of romance takes center stage, but behind the facade lies a stark reality: the prevalence of romance scams targeting those seeking love online. The online dating industry is thriving, with projected revenues of $3.1 billion in 2024 and an estimated 440 million users anticipated by 2027.

Romance scams hit $1.3 billion in 2023

However, amidst the quest for companionship lies a darker truth: the pervasive nature of romance scams. According to Norton’s 2023 Cyber Safety Insights report, one in every four adults globally has fallen victim to an online dating or romance scam.

The United States Federal Trade Commission received 11,235 dating and romance scam complaints in 2016, a number that has since ballooned, with around 70,000 reports filed in 2022, resulting in $1.3 billion in losses for unsuspecting individuals.

While traditional cash transactions have historically been associated with money laundering, cryptocurrency payments have emerged as a significant avenue for fraudsters, constituting 34% of reported losses in romance scams.

Binance’s internal data from 2023 estimates that romance scams comprised 2% of total reported cases, with victims losing an average of $14,000 each. Drawing from his experience as a former U.S. IRS investigator, Tigran Gambaryan, Binance’s head of financial crime compliance, highlights the parallels between romance scammers and financial fraudsters.

He emphasizes their shared tactics of exploiting trust and fabricating connections to manipulate victims into parting with their money. Binance’s global head of intelligence and investigations recounts several cases where victims were ensnared by sophisticated scams.

Tactics and trends in online deception

In one instance, a victim lost $100,000 to a scammer who initiated contact through Tinder, gradually siphoning money from the victim. Another victim fell prey to a cryptocurrency trader they met on social media, eventually transferring $500,000 to the scammer before communication abruptly ceased.

Fortunately, with Binance’s assistance, $200,000 of the victim’s funds were recovered. The rise of “pig-butchering,” a term coined by security firms and law enforcement agencies, is indicative of the evolving landscape of online fraud. According to research by Sophos, pig-butchering has become one of the fastest-growing segments of online fraud, with U.S. victims losing billions of dollars to fraudulent cryptocurrency-related investment schemes.

Scammers are adapting to new technologies, leveraging decentralized finance (DeFi) applications and protocols to perpetrate their schemes. By exploiting trust built over time, scammers entice victims to connect their Web3 wallets to malicious contracts, facilitating the unauthorized transfer of funds.

As the digital realm continues to intertwine with matters of the heart, vigilance is paramount. Potential love interests should be approached with caution, and red flags indicating suspicious behavior should not be ignored. Platforms and authorities must also collaborate to combat these scams effectively, providing support and resources to victims while holding perpetrators accountable.

While Valentine’s Day celebrates love and connection, it also serves as a reminder to stay vigilant in the face of romance scams proliferating in the online world. Awareness, education, and collaboration are essential in safeguarding individuals from falling victim to these deceitful schemes.