The recently divorced client was on the verge of sending $47,772 to a man she never met in person. The client, and the scammer, had met on a dating site and had already been communicating for several months when he asked for a loan to pay a customs fee so that he could reclaim some equipment.
The client and the scammer had talked at length about forming a life together. In fact, the scammer had already convinced the client to provide two smaller loans totaling about $8,000.
Weisz had become aware that something fishy was going on when her client asked for the large and very specific cash transfer from her managed account. She asked the client why she needed the money so quickly, an uncomfortable question. The client eventually confided in Weisz but made her promise not to tell anyone and demanded she transfer the money as requested.
The client thought “how dare she interfere in what might be my last chance at having fun and romance again?” Weisz asked if she could join the client at the bank before authorizing the transfer and the client agreed. The bank officer was also skeptical and, during the course of their business asked the scammer for identification, which he refused to provide. Finally, the client agreed to call the police, who looked into the scammer’s cover story and found he was not who he said.
Romance scams costs Americans more than $201 million in 2019, up 40% from the year prior. But, there are things FAs can do to help protect clients from such scams.
Advisors can be on the lookout for irregular cash transactions from clients. They can also ask why the money is needed so quickly, encourage the client to know the person they are sending money to face to face, not just their online profile. This can include video chats early on in the relationships or even in person.
They can also encourage clients to do a reverse image search for profile photos and discourage them from ever sending money to people they have only communicated with online. They can also question the client about any major life event that’s due to an online relationship.