It has been covered by everyone from Ella Fitzgerald to Seal to Tony Bennett and Lady Gaga. The lyrics of “Love For Sale” (Cole Porter) are a little bittersweet for Valentine’s Day. “Love for sale; Who will buy?” But then again, for some unfortunate love-seekers this year the song carries a bit of irony. Because there’s plenty of us out there who have answered those questions from would-be lovers with a little bit of fraud attached. This is looking like another year of “romance fraud” all over the world. But in the UK , the real tragedy is that it could have been easily avoided using Confirmation of Payee (CoP).
Before we get to some actual stories of romance fraud, and lest you think this is a little bit of occasional “fraud lite.” think again. According to the U.S. Federal Trade Commission, romance fraud cost Americans $547 million in 2021, and it has been the biggest fraud category it measures over the past five years. UK Finance reports that 38% of people who have entered online relationships have been asked for money. No wonder “The Tinder Swindler” is the number one trending documentary on Netflix.
Banks would do well to use their current fraud defences to spot aberrations in accounts that pay another person a large sum. In December 2021, Barclays added a “romance option” asking customers if they are trying to send money to a 'love interest' in a bid to crackdown on romance scams. Consumers and businesses in the UK, have an even better defence in the aforementioned CoP. Let’s use an unfortunate example to show how it could have made a difference.
Early last year, a 50-year old woman from the West Midlands met a man online, and the relationship quickly escalated with a promise that the man, who lived somewhere in Eastern Europe but said he had an address outside of London, would visit soon. Then the man claimed he was being held by the Ukranian government and needed £100,000 pounds to pay taxes to be freed from jail. The woman even got a bill from the Ukranian government as proof. It too was a fraud. More than £100,000 pounds later, the woman only found out that she had been scammed when she traveled to Heathrow to pick the man up. He never showed.
Although we can’t comment on the intricacies of this particular case, it's hardly an isolated incident with account-to-account payment fraud now bigger than card fraud in the UK and many times can be stopped through common sense. The CoP service is available now for banks in the UK who subscribe and would have shown positive proof that the name on the recipient account is the same person or business they intended to send the money to. The red flag would have been raised when she tried to confirm her first payment. It’s important to highlight that in order for CoP to work successfully, UK banks need to subscribe to the service to protect their customers from cases of Authorised Push Payment (APP) fraud or misdirected payments. And even if the fraudster would have set up an account and identity that matched, the digital trail would have led to a chance to prosecute and recover the funds.
Let’s leave “Love For Sale” in the category of pop songs. CoP is our new best friend that can help banks and their customers sing a better tune.