UNSW UNSW Business School UNSW Business School

When love is blind to the great lonely hearts swindle

June 21, 2017
Social impact

The hopes of online daters can override taking sensible precautions

They target the lonely and the loveless and they sometimes make big money out of it. In Australia in 2016, scammers who lied, cheated and even blackmailed their way into the lives and hearts of people looking for love swindled nearly $42 million from their victims. 

Romance fraud is now the biggest of all scams operating in Australia, in terms of dollar value, according to Scamwatch figures from the Australian Competition and Consumer Commission (ACCC). But despite the high risk, it's on the increase. 

Victims reported 4109 dating swindles to Scamwatch in 2016, costing $25.48 million, up from 2619 in 2015, costing $22.58 million. Another $16.39 million in losses due to romance scams were reported last year to the Australian Cybercrime Online Reporting Network (ACORN), resulting from 1056 reports. Of these, 473 victims lost money. 

"It really is so sad," says Lesley Land, a senior lecturer in the school of information systems and technology management at UNSW Business School. 

"It is financially and psychologically so hurting. The victims can become so depressed that they want to kill themselves, because they feel so stupid." 

And Land notes that many victims are often too embarrassed to report the crime and any financial loss, so actual scam amounts are higher than official figures. 

Seventy-five people, mostly women, lost more than $100,000 to dating and romance scams in 2016 and 257 lost between $10,000 and $100,000, according to Scamwatch. 

Worst of all, blackmail or 'sextortion' reports numbered 440 last year. These are cases where scammers threaten to or do publicly release sexually compromising images of victims unless they pay money.

‘It depends how desperate you are. If you are lonely and miserable, then any partner is better than no partner’ 

– lesley land





Optimism bias

New research co-authored by Land on the psychology of computer-based online dating shows that the risks are no deterrent. Her team's survey of 399 registered online daters accessed through the Amazon Mechanical Turk site shows most users have a false sense of security.

"They appreciate the severity of the risk and may have seen stories or case studies which are very detrimental, but their attitude is they think it won't happen to them personally," says Land. "So, that's one of the problems."

The study explores whether daters use online protection methods (such as reporting and heeding warnings) to shield themselves against scams. Based on their coping and threat appraisals and attitude, the results show it's their attitude to the use of protection methods that is the overriding factor. 

Part of the psychology at work relates to 'optimism bias', where people tend to underestimate the probability of negative events.

"Sometimes people just over-trust their own judgment," says Land. "Some people do have very good judgment. But not everybody does. It depends how desperate you are. If you are lonely and miserable, then any partner is better than no partner."

According to Land, more needs to be done by government and industry to improve the technology design of dating sites to educate, warn and protect users.

Her team is presently building a mock dating site platform based on the Tinder website, which includes a TripAdvisor-style ratings system where users rate fellow daters via their profiles.

"Ratings would operate as a warning system to other users," says Land. Ongoing research will investigate whether a ratings system is more effective at protecting users.

Use of social media

New ways of preventing online dating fraud are also being carried out by regulators. Last year, the ACCC continued its Scam Disruption project, with more than 2834 letters sent to potential scam victims. Of those who were sent a letter, 74% stopped sending money within six weeks. Similar disruption projects operated by other agencies including police teams have been running in South Australia and Western Australia.

"Dating scams are the scams that trouble us the most," says ACCC deputy chair Delia Rickard.

"I think they not only ruin people financially, they also destroy people emotionally. It's not uncommon for children to stop speaking to a mother after she's lost the family money. People are totally devastated. I just think this scam is unbelievably cruel and hideous."

In a new trend, scammers are increasingly using social media platforms such as Facebook to target victims, more than the online dating sites, she adds.

"Romance scams are increasing because of social media. We're seeing [more than] one-third of victims initially contacted via social media, with about 90% of that through Facebook," Rickard says.

Last year, the ACCC began working with Facebook and other social media platforms, plus banks, telcos such as Telstra, and money transfer agencies such as Western Union and Moneygram to identify possible scams.

Using data from the Australian Transaction Reports and Analysis Centre, scammers are identified from transactions to suspect countries, such as Nigeria. In total, about 5000 letters have been sent by the ACCC in the past few years, says Rickard.

Work is also being done with bank staff to recognise customers who may be sending money to scammers.

"We're working with Facebook to encourage them to do more to keep scammers off and warn people who've been approached. We provide them with intelligence and there are things they can do. I think it should be possible for them to use an algorithm to identify romance scammers," Rickard says. 

'You can put thousands of investigators into the process to prosecute them but there are just more scammers waiting to replace them' 

– delia rickard





Notoriously hard to catch

According to Scamwatch figures for 2016, women were the biggest losers. Where gender was reported, females lost almost $12 million, 70% more than males ($7 million). The 55–64 age group lost the most money.

In one of Australia's worst cases, Melbourne-based Jan Marshall was defrauded in 2013 of more than $260,000. The self-titled romance scam survivor is now an activist with an anti-scam blog and is an ambassador for ACORN, which offers support for scam victims. Police should listen more to friends and relatives who know someone is being scammed, Marshall says.

In another shocking case, a NSW man took his own life last year after being targeted by a scam on the gay dating app Grindr. He was allegedly blackmailed by a gang of Canberra teenagers.

In terms of fraud prevention, the Land and her co-authors recommend that content be made more prominent on how to date safely, that users be allowed to flag suspicious members and told how to perform do-it-yourself checks such as reverse Google image searches, and that they be offered an option to pay an external investigator to check profile backgrounds.

However, Rickard points out that scammers are often based overseas and are notoriously hard to catch, with only two overseas prosecutions so far. 

"You can put thousands of investigators into the process to prosecute them but there are just more scammers waiting to replace them. So we're hoping the work we do with intermediaries in terms of education will have a broader impact," Rickard says. 

As the UNSW research shows, the hopes of online daters are the complicating factor. 

According to the Norton Online Dating Survey released this year, as many as one in five online daters send potentially compromising photos or videos of themselves to strangers, 

Sydney-based Lyonswood Investigations and Forensics warns that timing is important for background checks. Many victims are taken advantage of "as they allow their emotions to override their intuition and do not carry out a due diligence investigation until it is too late". 

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