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Financial Planning > Behavioral Finance

Sweetheart Scams & Retirees: What Advisors Need to Know

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Looking for love in all the wrong places — dating websites and apps, among other social media, where every year thousands are victims of “sweetheart scams” and someone who seems like a charming potential Valentine can actually be a crime syndicate in Nigeria.

Shockingly, romance scams account for the highest number of internet-facilitated crimes, the FBI says. And they are on the rise.

Confidence fraud — as these schemes are also known — wherein scammers prey on people of any gender, young or old, to defraud them of money, often life savings, occur year-round. However, this deceit is particularly prevalent around Valentine’s Day, according to the FBI.

Seniors are the most vulnerable to romance scams, but financial advisors can help prevent them from becoming victims, as identity-theft expert Michael Bruemmer, vice president of data breach resolution at the Experian credit bureau tells ThinkAdvisor in an interview.

The FBI and Federal Trade Commission logged 15,000 romance-scam complaints in 2016, an increase of 2,500 from the previous year. These represent victims defrauded of about $230 million. Only 15% of fraud victims report the crime, so the extent of confidence fraud is likely even higher.

“Sweetheart scammers” steal people’s personal and financial information to swindle them out of money. Increasingly, these con artists are sophisticated operations — many organized-crime based — in countries such as Nigeria and North Korea, Bruemmer says.

There are about 3,000 romance websites, including those specializing in cougar dating, interracial dating or big beautiful women (BBW) dating. Approximately 1,000 new sites open every year, according to, a watchdog and dating-site reviewer.

Scammers defraud trusting types in a host of ways, including bilking men with “mail-order brides.” Other con artists lure victims into videotaping themselves nude on Skype, then blackmail them by threatening to post the tapes on Facebook.

States with the most romance-scam victims are California, New York, Texas, Florida and Pennsylvania, the FBI says. One Texas woman, for example, lost $2 million to a sweetheart scammer. It took two years — 2014-2016 — for her negligent financial advisor, noting the client’s dwindling account all along, to tell her to contact the FBI.

To make matters worse, organized scammers often post the names of victims on a so-called suckers’ list, sharing identification details with other criminals so they can hit on them in the future.

ThinkAdvisor recently interviewed Bruemmer, on the phone from his office in Austin, Texas. He discussed ways that FAs can help protect clients from romance scammers and what to do if one becomes an unfortunate victim. Here are highlights of our conversation:

Is it women who mainly get scammed on dating websites?

No. Romance scams are gender agnostic. There are a lot of scammers behind keyboards posing as young women going after older men. Rarely is the scammer the person they’re purporting to be. They create a synthetic, or fake, identity. Cupid is really a devil.

Who are most vulnerable to romance scams?

Seniors living in nursing homes or apartments on their own are the primary targets for romance scammers because they don’t get out much [to circulate] and generally have a more trusting attitude. They’re out meeting people online.

It’s surprising that so many seniors are active on dating sites.

In some locations around the country, the penetration rate of seniors’ participation on dating sites is much higher than for people in their 20s.

What are the risks of online dating to seniors who live in nursing homes?

It’s amazing how much time some of them spend on computers. We know of someone who was picked up supposedly by a family member — but it wasn’t a family member. They were going on a date, but they got into trouble. Another case was almost a kidnapping — the [scammer] tried to shake them down. So it can get very serious.

What’s important for a financial advisor to get across to older online romance-seeking clients?

The hardest aspect for seniors is to trust their gut [about meeting people online] because that generation has been brought up to trust and be respectful. But that isn’t a good posture online. It’s better to trust and verify than to trust and believe. In every problem we’ve seen, there hasn’t been that level of verification because the relationship is always kept secret. People don’t want to talk about it. Even after they’ve been scammed, they’re too embarrassed to do so.

How should they “verify?”

They should always get a second opinion about the contact they’ve made — from a friend, financial advisor, doctor — someone who can give them good independent counsel to help them [validate] that the person is legit.

What should nursing-home residents do when they get involved in an online “romance”?

Speak to [a facility authority] and say, for example: “I’m talking to this person online, and now I find out they’re from Romania and want my banking details.” Hopefully, they’ll be told: “This is crazy. Get off the computer!”

What other factors contribute to seniors’ vulnerability to internet dating scams?

Lack of technology competence and savvy. They’ll do things that aren’t [sensible] from a fraud perspective — and that’s not limited to romance scams. They might think it’s okay to send their personal identity information — address, phone number, club they belong to — to someone or put it on their Facebook page. They think, “Hey, I want to make myself available.” But they don’t realize that when they put that information out there, there’s no control over it — and it goes everywhere.

Have romance scams perpetrated by big organizations become harder to track now?

Yes. There’s more sophistication behind them compared to about five years ago. We’ve worked on identity theft cases with the FBI involving big [scamming] hotbeds in Nigeria, North Korea, China and Russia, where they have organized resources. Some of it’s organized crime, some supportive and sponsored by governments.

What’s their M.O.?

They have large call centers where people are dialing out or using computers that are even more sophisticated than some of the legitimate call centers in the U.S. This involves romance scams, stolen credit cards and drug sales because some of the organizations are involved in illicit activity of multiple lines of scam, and they keep moving around.

Why is that?

They’re doing this with thousands of people at the same time. So when they get enough people, or if one relationship fizzles, or if they get caught, they move on. They’ll open a website and then shut it down because it’s very hard to track if they don’t keep it open for a long time.

How do they decide who they’ll target?

They source people out. They can get lists of people in nursing homes. They have ways to get the names of financial advisors’ clientele. They look in the newspaper and see, “Oh, this guy just lost his wife,” and they reach out to them. Depending on the level of sophistication, it can get very complex.

Do the scams involve so-called mail-order brides, too?

Yes. The women are being trafficked out of former Soviet countries, like Romania, Bulgaria, Uzbekistan, and sent here as  mail-order brides, prostitutes or sex slaves.

What happens with the “brides”?

I know people that have paid $25,000 to $50,000 for a bride. The girl shows up, the guy pays the money. They go through a marriage ceremony and start living together. Then the girl runs off with whoever brought her over here, and the guy is out the money.

What should a financial advisor do if a wealthy widowed client tells them they want to liquidate their account right away and wire the money to a foreign country?

All good advisors will be very inquisitive and ask why and get details.

What if a client says, “I want to sell my house and move to [a distant state] because I found this young woman who lives there”?

That should certainly be questioned too. It’s a real sign that they’re been scammed. Any major life event that would be created because of an online relationship should be questioned.

What advice should advisors give clients to prevent them from being conned in the first place?

Don’t post personal identity information. Never give a credit card or bank account number to a stranger. That goes not only for romance scams.

What advice should an advisor give to a client who informs them they’re interacting with someone on a dating site?

Tell them to get validation that it’s a real person they’ve connected with. Someone might be on Facebook; but if they don’t show up anywhere else in an online search, it may be a huge indicator of a false identity. Tell the client that if anybody asks them for money, they should hold onto their checkbook. Real romance doesn’t rely on a checkbook.

Suppose someone is seeking a potential Valentine online, what’s best for them to keep in mind?

If you’re looking for love, make it long-term, not short-term: That is, if someone wants to go into a short-term relationship [e.g., a hookup], it’s generally a bad thing. And if it seems too good to be true, it probably is. Make sure you can verify the person through a third party.

There are so many dating sites. How does one choose among them?

People should use a reputable site. Non-reputable ones have many more scammers. But even with a site that is, or may  appear to be, reputable, you have to be very careful. I’m not on Facebook personally because many friends that I know have gotten into conversations with people who end up trying to take advantage of them. says you shouldn’t try to “get revenge” if you’ve been scammed because you could be dealing with a professional crime syndicate. What should you do instead?

File reports with the Federal Trade Commission and your local police. If it’s proven to be a case beyond state bounds, the FBI will get involved. You can also contact your state attorney general.

How can the nonprofit Identity Theft Resource Center (ITRC), of which Experian is a sponsor, be useful to scam victims?

If you’ve been scammed or feel like you’ve [suffered] identity theft, they’ll give you free assistance for as long as you need it and bring in the police, if you haven’t already done so.

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