The U.S. Federal Bureau of Investigation reports that in 2024 alone $672 million dollars was fraudulently taken from victims of confidence/romance scams with those over 60, as a group, reporting the most losses and submitting the most complaints to the FBI’s Internet Crime Complaint Center.1
The Federal Trade Commission reported an even higher total of losses from romance scams — $1.14 billion in 2023 and, as these types of scams are notoriously underreported, that number is most likely even highter.2
Relationship investment scams are so prevalent and financially devastating to their victims that the U.S. Securities and Exchange Commissions’ Office of Investor Education and Advocacy unveiled a new anti-fraud public service campaign in April to raise awareness of this crime.3
Relationship investment scams generally begin with an unsolicited contact via text message or social media or a contact through an online dating site. Of all the romance scams reported to the FTC in 2023, 40 percent of the victims reported that the scam started on social media.4
Relationship scams are perpetrated over the course of months or even longer because the scammer’s goal is to establish a relationship with the victim, often playing on the victim’s need for companionship and validation. They find out what the victim likes, wants and needs and build the relationship around those desires. They mirror those desires.
If you lost a spouse, so have they. If your children are estranged from you, so are their children. If you like watching old Western movies on television, so do they. They aim to establish an intimate connection with the victim so that they can use that connection to steal from the victim. Eventually, once the relationship has been established, they will pitch a phony investment opportunity.
Because they have gained the victim’s trust, the victim will often buy into the investment — often depleting retirement savings for the promise of high returns on their investment. Returns they never see.
No one deliberately falls prey to these relationship investment scammers. There are some red flags that a relationship isn’t legitimate, such as when a victim’s request to meet the scammer face-to-face is met with excuse after excuse, including that the person is in the military or is an off-shore oil worker.5
Another red flag is when the scammer claims to be a day trader or investor or cryptocurrency specialist and they can help you build your wealth. They lure you in under the guise of doing you a favor, rather than outright asking you for money. However, they may ask for money for a medical emergency, legal crisis or other disaster.
Another red flag is when you didn’t initiative contact with the scammer in the first place but they strike up a conversation and want to continue it and when they do they contact you frequently and lavish attention and praise on you. If you started communicating with them on a dating app, scammers will often ask you to give them your telephone number or communicate directly using another app such as WhatsApp.
The AARP recommends the following steps to protect you from becoming a victim of a relationship investment scam:6
• Don’t overshare personal information online.
• Use tools provided by email, social media and your cell provided to block unknown numbers.
• Don’t keep your relationship secret. Discuss it openly with family and friends.
• Investigate the person that contacted you to find out as much information as you can about them.
• Never invest with or send money to someone you’ve never met.
• If you feel that you are being victimized, cut off contact with the scammer.
• Report the scammer to local law enforcement.
Talk to a Michigan Securities Lawyer Today
Take action to protect your investor rights by contacting an experienced securities attorney. If you have questions about investment fraud, financial schemes, broker misconduct, or about how your broker is managing your account, please contact our Securities Law Firm located in Royal Oak.
Our securities attorneys have decades of experience in helping countless individuals regain undue investment losses. Call for a Free Case Evaluation today.
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1, FBI Internet Crime Report 2024
Link: https://www.ic3.gov/AnnualReport/Reports/2024_IC3Report.pdf
2, 4, 6 Learn How to Avoid Romance Scams by Deirdre van Dyk, 2/4/2025
Link: https://www.aarp.org/money/scams-fraud/romance/?cmp=KNC-DMP-FRD-Fraud-Ongoing-RomanceScams-NonBrand-Phrase-64913-Bing-RomanceScams-Phrase-NonBrand&gclid=66b648a165501bfde1482098d88f7b09&gclsrc=3p.ds&msclkid=66b648a165501bfde1482098d88f7b09&utm_source=bing&utm_medium=cpc&utm_campaign=Fraud-Ongoing-RomanceScams-NonBrand-Phrase&utm_term=romance%20scams&utm_content=Romance%20Scams
3, SEC’s Anti-Fraud Public Service Campaign Warns Investors About Relationship Investment Scams, 4/16/2025
Link: https://www.sec.gov/newsroom/press-releases/2025-63
5 Romance Scammers Favorite Lies Exposed by Emma Fletcher, 2/9/2023
Link: https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2023/02/romance-scammers-favorite-lies-exposed#ft1