Information from the Better Business Bureau:
In February 2018, BBB issued an in-depth investigative study on romance scams, describing how fraudsters target people who are looking for romance. BBB’s follow-up study – “Fall in Love – Go to Jail: A BBB Report on How Romance Fraud Victims Become Money Mules” – describes how fraudsters then exploit that relationship further. It digs into the scope of the problem, who is behind it, and the need for law enforcement and consumer education to address the issue. Read the complete report here. (us.bbb.org/moneymules)
As detailed in the original study, romance scammers typically contact their victims through dating websites, apps or social media, often using fake profiles and even stolen credit card information. Using these false identities, scammers may spend months grooming their victims, building what the victim believes to be a loving relationship, before asking for money to handle an emergency or travel expenses.
The financial damage inflicted by these scams, which is often accompanied by far greater emotional harm, is often just the tip of the iceberg. According to the new BBB report, 20 to 30 percent of romance scam victims were used as “money mules” in 2018 alone, with these victims numbering in the thousands.
Money mules act as financial middlemen in a variety of scams, laundering money from other victims by receiving money or goods purchased with stolen credit cards and sending them on to the fraudsters, often out of the country. This often happens when the romance scam victim has no money or already has given all of their money to the scammer. The victim may be a willing accomplice or may have a variety of other motives – love, fear, financial compensation for their own losses – but the outcome is the same: By providing this type of aid to the fraudster instead, the victim aids and abets a variety of other frauds, muddying the scope of a fraud and the identity of the real perpetrator.
The scams and crimes in which money mules may become embroiled include business email compromises, fake check scams (the subject of an in-depth BBB investigative study in 2018), credit card reshipping, grandparent scams, and even illegal drug transportation. These frauds have in common that the money mules frequently are romance scam victims.
As law enforcement cracks down on romance and other frauds, prosecuting more and more of these scams’ perpetrators in recent years, money mules at times have been prosecuted as well, facing jail time and hundreds of thousands of dollars in fines and restitution payments. In most cases, however, there is no desire to take criminal action against unwitting participants who had no financial gain and who stop transferring money for crooks as soon as they realize the role they have been playing.
“Romance scams can hurt emotionally but when the victim is also used as a money mule, it adds insult to injury,” said Janna Kiehl, BBB President & CEO. “After losing money and dignity to fraudsters they believed were loving romantic partners, these victims find themselves tangled in a web of even more serious crimes, possibly facing consequences themselves. We work together with law enforcement to expose these scams in hopes unwitting fraud victims will avoid being re-victimized.”
According to the new BBB report, cybersecurity experts have traced the bulk of online romance scams to Nigeria, though Nigerian nationals operating these frauds are based in several countries around the world, including the U.S. The same groups involved in romance scams frequently operate other frauds on a worldwide scale. One expert reports that at any given time, there may be more than 25,000 scammers online with victims.
In addition, law enforcement officials say that Jamaican groups that operate sweepstakes and lottery frauds – the subject of an in-depth BBB investigative study in 2018 – have begun running romance frauds as well, using those victims to help launder money from sweepstakes and lottery fraud victims.
The report recommends:
- It is important to warn people about romance frauds before they get invested in an online relationship. Alert them that the loss of their money is not the end of the matter because fraudsters may try to enlist them as money mules. It also is important to exercise caution in one’s own online dating ventures in order to avoid falling for a romance fraud at the outset.
- Romance fraud victims often need counseling to help them overcome the trauma of this fraud. More victim support groups like those in Los Angeles and Ventura, California, would be helpful.
- More warnings to money mules may help alert romance fraud victims that they are engaged in assisting frauds and encourage them to stop.
- More prosecutions of romance fraudsters would help deter romance fraud.
- Change existing restrictions to let banks share information with law enforcement, regulators and other financial institutions about possible money mule accounts.
- Increase cooperation and sharing of information between law enforcement officials in different jurisdictions working on the same cases.
- More training and cooperation is needed internationally to recognize and combat romance fraud.
What to do if you are the victim of a romance scam:
- Complain to bbb.org
- Report the fraud to bbb.org/scamtracker
- Report it to the Federal Trade Commission (FTC) or call 877-FTC-Help
- Report it to the Internet Crime Complaint Center, or IC3
Report it to the Canadian Anti-Fraud Centre. Toll free from the US at 1-888-495-8501
Report it to the Senate Aging Committee Fraud Hotline at 1-855-303-9470 or through its website.
Victims who have sent money through Western Union should complain directly to them at 1-800-448-1492.
Victims who have sent money through MoneyGram should notify them directly at 1-800-926-9400.
Better Business Bureau
600 South Tyler, Suite 1300