The National Anti-Scam Centre is warning people looking for love online to beware of financial criminals luring them into investment scams.
Romance baiting scams cause significant emotional and financial harm to Australians, with Scamwatch receiving 484 reports of this scam in 2023. Despite overall losses nearly halving in the past year, reports to Scamwatch show that more than $40 million was lost to romance baiting scams in 2023.
Romance baiting scams disproportionately impact people from culturally and linguistically diverse backgrounds, with reports to Scamwatch from these communities accounting for more than 30 per cent ($12 million) of total losses last year.
“Scammers are cold-hearted criminals who are looking to exploit people’s emotions in order to take their money,” ACCC Deputy Chair Catriona Lowe said.
“We are urging people to not take financial or investment advice from someone you have only met online. Even if you think you know who you are messaging, remember that it could be a scammer on the other side of the screen.”
“These scammers will spend weeks, even months, messaging their victim, making them feel like they’ve formed a genuine connection before shifting the conversation to investment or cryptocurrency opportunities. Ultimately, these ‘opportunities’ turn out to be investment scams, leaving the victim not only broken hearted but out of pocket by significant amounts of money.”
Australians aged over 55 years old suffered the highest individual losses to romance baiting scams in 2023.
“While the decline in annual losses indicates that co-ordination between government and industry is increasing community awareness and disrupting scammers, we are concerned that people are still losing an alarming amount of money to romance baiting scams,” Ms Lowe said.
“Online dating and social media connection is a common way to meet new people, but it also presents an opportunity for scammers to deceive people and take advantage of their trust.”
How the scam works
- The victim and scammer meet on a dating app or dating website. Sometimes scammers will befriend the victim on social media.
- After some initial messages, the scammer will ask the victim to move the conversation to a free, encrypted messaging platform, such as Google Hangouts, WeChat, Line or WhatsApp.
- The scammer typically spends a couple of weeks developing a close relationship with the victim. This is sometimes referred to as ‘love bombing’ where the scammer is in contact with the victim several times a day professing their feelings for them.
- After a while, the scammer begins to talk about making money through different investments, most commonly involving cryptocurrency.
- The scammer will then offer to show the victim how to invest and will pressure the victim into transferring a small amount of money to see how easy it is.
- Initially, it often appears to victims as though they are making a profit from their investment. They may even be able to move money around, as the scammer entices them to keep investing more money.
- Often victims will be told they have to ‘top up’ their account to access their money or that they must always have a certain amount in their account otherwise it will be frozen, and their money lost.
- The scam ends when the victim has no more money to give or refuses to keep investing. At this point, the scammer may either disappear and stop all contact with the victim or may demand that the victim invests more money to access the money already invested.
- The victim is left with a significant financial loss while also losing the person who they thought they were developing a relationship with.
STOP – Don’t give personal information or act on investment advice from someone you have only met online. Don’t feel pressured to invest. If you have any doubts, stop communicating with them.
THINK – Ask yourself if you really know who you are communicating with? Scammers can use different profile pictures and lie about who they really are, especially online. Do an internet search of the person’s name or photo to see if it’s a scam.
PROTECT – Act quickly if something feels wrong. Contact your bank immediately if you have invested money. Help others by reporting scams to Scamwatch.
- The National Anti-Scam Centre is working closely with the Australian Federal Police to protect the public from romance baiting scams, also known as ‘pig butchering scams’, and assisting law enforcement to bring offenders to justice.
- The National Anti-Scam Centre’s first fusion cell is currently working with industry on better ways to combat investment scams in Australia. There has been an overall downward trend in investment scams impacting Australians since the establishment of this fusion cell in July 2023.