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When wearing your heart on your sleeve can hurt your hip pocket
7 February 2025
Westpac is warning Australians about a growing trend in which scammers pose as romantic partners or friends to lure individuals into fake investment opportunities.
Called romance baiting, it is a scam that can be lucrative for scammers and devasting for their victims.
Investment scams are a popular and lucrative tactic used by scammers, accounting for just under 20 per cent of scam cases, but close to 50 per cent of all scam losses. Scammers commonly use fake ads on social media platforms to target people, though some scammers pose as romantic partners to lull people into handing over money.
Ben Young, Westpac Head of Fraud Prevention, provides insights into the investment scam trend and offers tips on protecting yourself.
Online meet-cute turns ugly
Scammers often pose as potential romantic partners or friends to trick individuals into investing in schemes they claim have made them wealthy, says Young.
"We have observed that scammers are getting creative in their tactics. They pose as someone interested in a romantic or even platonic relationship and then provide investment advice, appearing to have no ulterior motive, as they claim to have already invested and are not set to benefit from their target's investment.
"For example, a scammer might meet someone on a dating website and quickly move their conversation to a private chat platform. They will spend weeks or months building rapport, eventually establishing a close relationship with a person, who then believes they are in a genuine and loving relationship.
"The scammer will start discussing money and subsequently recommend what seems to be a well-intentioned investment opportunity. However, there is no legitimate investment scheme; the victim willingly hands over thousands of dollars under the illusion of a great money-making opportunity to a fake investment company.
"These criminals are using sophisticated tactics and emotional manipulation to exploit individuals seeking companionship, and it can be heartbreaking for people to lose a significant amount of money because of someone they trusted and felt close to.
"Traditional romance scams still occur, where individuals are tricked into believing they are in a relationship with someone who needs urgent financial help for a medical emergency or legal issue. However, the largest losses nowadays come from scammers suggesting victims invest in the same scheme that has supposedly made them rich."
What to watch for and what to do next
Young gives the red flags to look out for when approached online about investments.
- Only meeting online or chatting on the phone: Scammers typically communicate through messaging platforms and avoid video calls or in-person meetings. They may send photos or spend long hours on the phone, but having time to chat doesn’t mean they have your best interests at heart. If they send pictures, you can complete a reverse image search on Google to check if they have used other people’s photos to fake their identity.
- Unrealistic returns: Many scam victims are promised returns that seem too good to be true. Before investing any money, check the rate you are being offered against general market offerings. For instance, if they recommend a term deposit with a 6% or 8% return, use comparison sites to compare it with rates offered by banks and other providers, which may be closer to 4%. Such discrepancies are red flags.
- Unsecure site: Many scammers use fake websites, social media pages and online ads to add legitimacy to their scams. Carefully double-check any URLs you receive and look for a padlock symbol to the left of the URL. While not a guarantee, it is usually a good sign that the site you are visiting has a security certificate. Additionally, look for information on the site about the URL’s company that suggests it is a real business – such as a physical address, phone numbers, and an About or About Us section.
- Send money to release money: Legitimate investment schemes will never require you to pay a fee to access your earnings. Many victims fall for this tactic, as the amount requested to release funds often seems small compared to their perceived investments, but it is throwing good money after bad.
If you suspect you may have been targeted by a romance baiting scam, Young recommends three immediate actions:
1. Stop Communication: Cease all communication with the person you suspect may be a scammer. If they are pressuring you to continue talking, remember that you have the control to stop all contact or block them.
2. Contact Your Bank: It may feel uncomfortable to disclose your situation involving a potential scammer to your bank, but remember that they are there to help, not to judge. Be honest about your situation and do not lie to your bank. If someone asks you to lie to you bank about transactions, that is a red flag and a common tactic used by scammers.
3. Report the Scam: Report the scammer to the platform where you met them. This could help protect other potential victims they may target in the future.
For more information on investment and romance scams, visit Westpac's website.
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