Romance scams have surged to a six-year high globally, with 1,193 new entities and individuals identified in 2024 as having potential ties to these fraudulent activities, according to data released by Moody’s. The increase represents a 14 percent jump from 2023, underscoring the growing sophistication of scammers and the evolving nature of financial grooming tactics.
The rise of these scams poses significant challenges for the financial system, as criminals often use traditional banking channels to launder illicit funds. Financial institutions face increased scrutiny and potential reputational damage if they fail to detect and prevent such activities.
The dramatic growth of romance scams can be traced back to the COVID-19 pandemic, which created fertile ground for financial grooming. During prolonged lockdowns, individuals experienced heightened isolation and a greater need for emotional connection, making them more susceptible to such schemes. Moody’s data shows that while new scam profiles decreased by 29 percent in 2020, they surged by 57 percent in 2021 as lockdowns intensified.
Among the various types of romance scams, sextortion has become particularly alarming, especially among teenagers and young adults. Perpetrators often create fake social media profiles to solicit explicit images or videos from victims. They then resort to blackmail, threatening to expose the content unless paid off. This method has disproportionately targeted teenage boys, adding an additional layer of concern for parents, educators, and law enforcement.
The United States remains the epicenter of romance scams, accounting for 38 percent of newly identified profiles in 2024. Nigeria follows with 14 percent, while India ranks third with 12 percent. The United Kingdom (11 percent), Malaysia and China (5 percent each), the Philippines and Brazil (4 percent each), and Canada and Australia (3 percent each) round out the top 10 countries with the highest scam activity.
Moody’s uses a sophisticated system to track and compile risk profiles of individuals and organizations potentially linked to romance scams. The firm gathers information from negative news reports, government watchlists, sanctions lists, and databases of politically exposed persons (PEPs). Financial institutions rely on this data to conduct thorough due diligence and comply with anti-money laundering (AML) and counter-financing of terrorism (CFT) regulations.
As scams grow more elaborate, the need for proactive measures in financial monitoring and public awareness becomes increasingly critical. Experts urge users to remain vigilant, especially when forming relationships online, and to report any suspicious activity to relevant authorities.