Romance fraud is a financial crime that is alarmingly on the rise by 9% since last year, perpetrated by criminals that have more sophisticated tactics than ever before.
Although there is strong evidence of intervention and support for victims from banks, the Financial Conduct Authority unearthed many shortcomings in how banks and payment firms are currently detecting and preventing romance fraud for victims.
According to the regulator’s latest review, victims lost £106 million to romance scams last year.
One victim lost more than £428,000 after being deceived into sending money to a fraudster they had developed a romantic connection with, and it is becoming more common behaviour with 8 in 10 cases beginning online, particularly through social media that can be more harmful than face-to-face. Such statistics suggest that these platforms and dating sites have a critical role and responsibility to curb fraud and stronger collaboration between financial institutions and tech companies is needed.
Romance fraud occurs when criminals build false emotional relationships to manipulate victims into transferring money.
The FCA’s review revealed that almost half of victims, 42%, did not disclose the true reason for their payments, making early intervention difficult. Many victims remain “under the spell” of fraudsters, and are therefore in denial or reluctant to believe they are being deceived.
While some firms demonstrated strong practices of detection and offered empathetic support, the FCA said others missed key warning signs. Monitoring systems were not always calibrated to flag patterns, and staff were not sufficiently trained to identify suspicious transactions.
The review set out measures banks and payment firms can take heed of including, better detection and monitoring systems, staff training, early identification of signs of vulnerability, and compassionate aftercare.
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 that fall victim. The impact – financially and personally – can be devastating”.
He said that the FCA recognises “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”.
In one case, a victim made 403 payments over a year, losing £72,000, yet the bank failed to identify the out-of-character activity.
The FCA also highlighted positive examples of bank staff going above and beyond to provide assistance to the victim and navigate them out of sending fraudulent payments to their ‘partners’. They showed a commitment to breaking the fraudster’s hold and restoring customer confidence.
In 15% of the cases reviewed, customers had previously been victims of fraud while banking with the same firm.
With romance scams costing UK consumers millions, the FCA is urging banks to strengthen identity verification and fraud prevention. Identity Week Europe 2026 provides a vital platform for financial institutions, regulators, and tech innovators to explore how digital ID, biometrics, and trust frameworks can protect users. From liveness checks to secure authentication, the event showcases speakers from Gruppo Sella, Raifeissen Bank International, N26, the Dutch Chamber of Commerce, Gusto, Interac, Monzo, and more to discuss how identity-driven solutions are crucial in safeguarding individuals and financial systems against evolving digital threats.
