Banks and payment providers in the UK are being urged to step up their fight against the “vicious crime” of romance fraud.
The nation’s financial watchdog says they’ve missed chances to help victims “break the spell” of these devastating scams.
According to the FCA’s latest Romance Fraud Review, victims lost more than £106 million to romance scams in the 2024/25 financial year — a 9% rise from the previous year. The City of London Police estimates that victims lose an average of £11,222 each, though many cases are likely to go unreported due to shame and embarrassment.
The FCA said 85% of these scams begin on social media or dating platforms, where fraudsters exploit personal vulnerabilities and emotional trust.
Missed opportunities and victims ‘under a spell’
The regulator reviewed six major firms — including banks and payment service providers — and found that while some have shown strong intervention efforts, others repeatedly failed to identify suspicious transactions.
In some cases, the scale of losses was shocking. One victim transferred over £428,000 to a fraudster, while another made 403 separate payments amounting to £72,000 over the span of a year without the bank detecting the unusual pattern.
The FCA said that identifying romance fraud can be particularly difficult because victims are often “emotionally invested” and “under the spell” of the scammer, reluctant to believe they’re being defrauded or to reveal the true reason for their payments.
In 42% of the cases reviewed, victims did not disclose the real purpose of their transfers when questioned by bank staff.
Where banks fall short
The FCA found inconsistencies in how financial institutions detect and handle such cases. Some firms showed “compassionate and tailored engagement,” while others failed to pick up on red flags or ask critical questions.
One example cited in the review involved a victim who told their bank they were sending cryptocurrency to Iraq because their supposed partner, claiming to be in the military, could only receive money that way.
The regulator said staff training and effective fraud monitoring systems remain key weaknesses in many institutions. It urged banks to ensure employees can identify suspicious activity, particularly when victims display emotional distress, make out-of-character transactions, or borrow money suddenly.
In 25% of cases, victims were pressured into raising funds through loans, family, or the sale of personal assets, sometimes leaving them in deep financial hardship.
Positive examples offer hope
Despite the shortcomings, the FCA acknowledged several positive examples of intervention. Some banks, it said, went above and beyond to protect customers.
In one case, a bank made 11 separate calls over six weeks to support a victim, gradually helping them recognise they were being manipulated. Another firm responded sensitively to a customer who was newly divorced and caring for a sick child, stepping up monitoring and safeguarding measures.
Such proactive and compassionate engagement, according to the FCA, can help victims “break free” from the psychological control of scammers.
Steve Smart, the FCA’s executive director of enforcement and market oversight, described romance fraud as one of the most “devastating” financial crimes.
“Romance fraud is a vicious crime. All too often it is the vulnerable that fall victim. The impact — financially and personally — can be devastating,” Smart said. “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.”
The FCA said preventing romance fraud requires collaboration between banks, fintechs, regulators, and law enforcement. It emphasised that “tackling fraud requires a whole-system approach” and called for stronger coordination and data sharing between firms.
A new report from BioCatch, a behavioural biometrics company specialising in financial crime prevention, revealed a dramatic global surge in banking scams.
