Banks 'miss chances' to tackle rise in 'vicious' scam costing Brits £11,222 each

Banks have occasionally failed to seize opportunities to help "break the spell" of romance scams, the City regulator has said. The Financial Conduct Authority (FCA) acknowledged witnessing examples of banks making extraordinary efforts to safeguard those vulnerable to romance fraud. However, the watchdog also discovered some missed opportunities to thwart scams.

City of London Police statistics indicate that over £106 million was reported stolen through romance fraud across the UK during the 2024/25 financial year, marking a 9% yearly rise in romance fraud reports. It is calculated that victims typically lost £11,222 each. Victims fall prey to sending money to criminals who fabricate false romantic relationships or friendships.

More than eight in 10 (85%) cases scrutinised by the FCA originated online, especially via social media and dating platforms, indicating these sites have a vital role in fraud prevention and harm reduction, the regulator stated. Losses in verified romance fraud cases evaluated by the FCA spanned from £100 to £428,249.

In its romance fraud examination, the FCA outlined steps that banks and other payment companies could implement to safeguard their customers - including enhanced detection and monitoring systems, staff training, early recognition of vulnerability indicators, and compassionate aftercare. The regulator has highlighted that firms often struggle to intervene as victims may be hesitant to admit they are being defrauded.

In nearly half (42%) of the cases reviewed by the FCA, victims did not disclose the true reason for making a payment when questioned.

A crucial area for improvement is ensuring staff are trained to identify warning signs and critically question customer explanations, according to the regulator. It added that this practice was not consistent across all firms.

In 15% of the cases reviewed, customers had previously fallen victim to fraud while banking with the same firm, underlining the need for bespoke protections and ongoing monitoring, the regulator stated.

In a quarter (25%) of instances, victims were pressured into sourcing funds from various places, including new loans, borrowing from friends and family or selling their personal assets.

The regulator identified situations where victims were left in a financially vulnerable position, with one entering an individual voluntary arrangement (IVA).

In one case from the FCA's review, an individual made 403 payments to a fraudster over a year, resulting in losses exceeding £72,000. Another case involved a victim informing bank staff they planned to send cryptocurrency payments to Iraq, claiming it was the only method accepted by their "partner" in the military.

However, the regulator noted that many firms were providing a high level of support, occasionally surpassing the FCA's expectations, through compassionate and tailored engagement.

Steve Smart, executive director of enforcement and market oversight at the FCA, said: "Romance fraud is a vicious crime. All too often, it is the vulnerable who fall victim. The impact - financially and personally - can be devastating. We recognise the challenge banks and payment firms have in combating this complex crime, and this review aims to help them stay one step ahead of the criminals.

"We also all need to be on guard so we can protect ourselves and loved ones by recognising the romance fraud red flags."

The FCA revealed it witnessed encouraging examples of banks and payment firms exceeding expectations.

One firm placed 11 calls across a six-week period to assist a victim, showing dedication to severing the fraudster's grip and rebuilding customer trust, the regulator noted. Another responded compassionately to a victim who had recently divorced and was caring for a child receiving cancer treatment, it stated. They then proceeded to carefully scrutinise the victim's account.

When spotlighting warning signs of romance fraud, the FCA stated alarm bells should sound if someone you have only communicated with digitally requests money or proposes investments.

Demanding extensive personal details represents another potential danger signal.

Individuals can use image verification tools to determine if the photograph of the person they believe they are conversing with has been sourced from elsewhere. People are urged to report scams to the police and their bank or building society.

Prompt communication with the account provider could potentially help recover any losses and prevent further payments from being made.

Michelle Pilsworth, head of fraud and complaints at Santander UK, said: "Since January, we've seen nearly £5.5 million stolen by scammers through romance fraud alone. These criminals will invest time in building an emotional connection, before asking for money, they'll claim is needed for food, medical treatment, or an investment opportunity. We're also increasingly seeing them asking for gift cards.

"The lengths these scammers go to, to earn a consumer's trust, make these one of the most distressing scams, leaving people feeling emotional and financially vulnerable. At Santander, we have a dedicated 'break the spell' team, a specialist fraud prevention unit that works with customers who are being manipulated by scammers, particularly in cases of romance scams.

"In the first six months of this year, the team stopped scammers stealing a further £3.5 million from our customers."

Liz Ziegler, fraud prevention director at Lloyds, said: "Taking advantage of people who are looking for love and companionship, fraudsters play with victims' emotions when they could be at their most vulnerable.

"Whilst they can be convincing, it's easy to spot some of the most obvious mistakes these scammers can make. Always take a step back and ask yourself if what they are telling you sounds believable.

"Never in any circumstances, send money to someone you've met online. No good relationship starts off in this way, and there aren't many valid reasons in 2025 why someone can't speak to you on the phone. If you have an older person in your life that is active online, make sure to educate them as best you can on the risks and signs of potential fraudsters looking to take advantage of them."

Pat Hurley, ombudsman director at the Financial Ombudsman Service (FOS), stated: "Over the past year alone, we've received hundreds of complaints about romance scams, often involving scammers deceiving victims and gaining their trust using different online platforms like dating sites and gaming apps.

"It's important that people understand that there is no shame in falling victim to a romance scam. People don't need to feel embarrassed; there is help available."

Nick Sharp, deputy director for fraud at the National Crime Agency, said: "Romance fraud affects people not only financially, but also emotionally, with victims often finding it challenging to contemplate that someone they thought they could trust was not what they thought.

"This makes it one of the most harmful types of fraud that victims face and all the more important that all industries take every opportunity to identify such frauds and develop a victim-centred approach."

Rocio Concha, Which? Director of Policy and Advocacy, said: "Banks and payment providers are on the front line to protect their customers from sending money to fraudsters, so it's good to see the FCA setting out clear expectations for how these firms should protect their customers.

"The regulator must not hesitate to take action against any firms falling short."

A spokesperson for UK Finance commented: "Banks are committed to protecting their customers from romance fraud - they invest significant sums and have teams that are trained to spot warning signs.

"The FCA's review highlights that a lot of good work is done to keep people safe and prevent this awful crime from taking place.

"Firms will take on board the FCA's findings and look to make any improvements needed to keep even more people safe."

The spokesperson further added: "We need social media and dating sites to take much greater action to address the problem that begins on their platforms.

"To stay safe, it's important to be open and honest with your bank when they ask you questions regarding your payments.

"And we encourage everyone to follow the advice of the Take Five To Stop Fraud campaign and contact your bank if you are concerned about being a victim of fraud."