Attention online daters: Beware the "romance scam."
Americans reported $1.3 billion in losses from so-called romance scams over the past five years, according to a new report from the Federal Trade Commission (FTC). In 2021, reported losses hit an all-time high of $547 million, or six times the total losses in 2017.
These types of crimes were recently highlighted in the popular Netflix documentary The Tinder Swindler about the exploits of convicted fraudster Simon Leviev, who denies the allegations.
What is a romance scam exactly? It's a form of fraud that begins with the scammer pretending to have a romantic interest in you. Most scams start on dating apps, but other social media platforms are commonly used as well. More than a third of people who reported losses in 2021 said the cons began on Instagram or Facebook as unexpected private messages.
The FTC said scammers are often "masters of disguise" who create fake online profiles with photos they found on the web. The actual scam usually takes the form of a money request, but sometimes scammers start by asking for help moving their own money around.
"Stories like this often set people up to become 'money mules' — they may think they’re just helping, but they’re really laundering stolen funds," said the agency in a press release. "These stories are also used to trick people into sending their own money."
Scammers also increasingly lured people into bogus investment opportunities, particularly in foreign exchange trading and cryptocurrencies.
Indeed, scams involving cryptocurrencies were the fastest-growing and most costly. Total losses in that category were $139 million, five times what they were in 2019, while the median loss per person was nearly $10,000.
While younger people still use dating apps the most, the financial impact of the grifts skews older, with those over 70 seeing the biggest losses.
The uptick in scams tracks with an overall increase in online dating. The Pew Research Center found that 30 percent of U.S. adults reported using a dating app or site back in 2019. Since then, the industry has continued to grow, with revenue nearly doubling to $5.6 billion in 2021.
It also tracks along with the explosive rise in all types of fraud. The agency reported that losses from fraud were up 70 percent from 2020 to more than $5.8 billion.