FCA Warns Banks Over Missed Chances to Stop Romance Scams

The Financial Conduct Authority (FCA) has criticised UK banks and payment firms for repeatedly missing key opportunities to prevent romance fraud, one of the fastest-growing forms of financial crime. According to a recent FCA review, victims are losing tens of thousands of pounds, sometimes over hundreds of separate transactions, while red flags are being overlooked.

Romance Fraud: A Deeply Personal Crime

Romance fraud occurs when criminals create fake online relationships to emotionally manipulate victims into sending money. These frauds typically begin on social media or dating platforms and escalate as trust builds. Scammers often claim to be overseas for work or military service, claiming they need money for emergencies, investments, or travel.

One case cited by the FCA involved a victim who made 403 payments over a year, losing £72,000 to a scammer. Another sent cryptocurrency to a supposed partner in Iraq. In 2024 alone, £106 million was lost to romance fraud in the UK, a 9% increase from the previous year, with an average individual loss exceeding £11,000.

What the FCA Found

The FCA’s review found that many firms:

• Failed to identify repeated, suspicious transactions.
• Lacked consistent staff training to spot manipulation or emotional distress.
• Did not provide appropriate support to vulnerable victims, even when warning signs were clear.
• Missed chances to question unusual payment activity or freeze accounts proactively.

While some firms demonstrated “compassionate and proactive aftercare,” others showed inconsistent or reactive responses.

Why Detection Is Difficult

Romance fraud victims often conceal the true nature of their payments. In 42% of the cases reviewed, victims provided misleading explanations to their bank, usually because they genuinely believed their online relationship was real. This emotional investment makes detection challenging, as the transactions appear voluntary and legitimate on the surface.

However, as the FCA notes, financial firms still have both the data and the duty to detect behavioural red flags, especially repeated transfers, high-risk payment methods (like crypto), or new accounts sending large sums abroad.

Lessons for the Fraud Prevention Community

For professionals and organisations like A Jolly Consulting, the FCA’s findings underline several critical areas for improvement across the sector:

1. Data-Driven Monitoring: Banks and fintechs must use behavioural analytics to flag inconsistent transaction patterns or changes in payment habits that may signal coercion.

2. Enhanced Staff Training: Fraud prevention is not just technical; it is psychological. Employees need to recognise emotional indicators such as anxiety, secrecy, or over-defensiveness.

3. Customer Protection Protocols: Firms should develop clear escalation processes for suspected romance frauds, including compassionate victim support and real-time interventions.

4. Cross-Industry Collaboration: Sharing intelligence between banks, law enforcement, and digital platforms is key to identifying serial fraudsters.

AJC’s Take: Human-Centric Fraud Prevention

At A Jolly Consulting, we believe that effective fraud prevention must blend technology, empathy, and education. Romance frauds are not simply financial crimes; they are emotional manipulations that exploit human vulnerability. By training staff to combine analytical skills with human understanding, organisations can prevent both financial loss and long-term psychological harm.

What Individuals Can Do

• Pause before sending money to anyone you have not met in person.
• Be cautious of urgent financial requests, especially involving crypto or overseas transfers.
• Consult your bank or a fraud prevention expert if you feel pressured.
• Report incidents to Action Fraud or local authorities immediately.
• Stay informed, education remains the strongest first line of defence.

Final Word

Romance fraud thrives in silence and shame. The FCA’s findings are a timely reminder that fraud prevention is a shared responsibility between all those involved – social media platforms/dating sites, institutions, regulators, and the public.

At A Jolly Consulting, our mission is to equip individuals and organisations with the insight and strategies to detect deception early, protect assets, and foster digital trust.

Empathy saves money and lives. That is the future of fraud prevention.

How AJC Can Help

At A Jolly Consulting, we help organisations strengthen their fraud prevention, detection, and response strategies – with a focus on both technical resilience and customer trust. From policy audits to staff training, we work with businesses, educational institutions, and government bodies to build robust frameworks that protect both people and data.

Fraud may be on the rise, but with the right strategy, it does not have to cost you your customers.

If your organisation is ready to step up its fraud response, contact us at AJC to find out how we can support your journey.

Click here, to find out more about our Fraud Prevention services.

Contact us on 020 7101 4861 or email us at info@ajollyconsulting.co.uk if you think we can help.

Sources:

https://www.fca.org.uk/publications/multi-firm-reviews/combating-romance-fraud-prevention-detection-and-supporting-victims

Romance scam warning as fraudster cons £72k from victim | The Independent

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