My Phony Valentine: Covid Fuels Romance Scams | #datingscams | #russianliovescams | #lovescams

About 32,800 romance scams were reported last year, up nearly 31% from 2019, according to Federal Trade Commission data released last week. Consumers reported losing a record $304 million to the scams, an almost 51% increase, the FTC said.

Romance scammers often build fake online personas to develop relationships with victims through online dating apps or social media platforms. They keep their distance, though, making excuses about why they can’t meet in person. Sometimes it is a phony military deployment, other times a made-up assignment on an offshore oil rig, said Monica Vaca, an associate director at the FTC. As a virtual relationship strengthens, scammers make requests for money, often disappearing once the cash is in hand.

Current conditions are ripe for such fraud, Ms. Vaca said. Social distancing has complicated in-person dating. People are spending more time online. There is a general increase in the use of dating apps. And the pandemic has heightened the perceived credibility of requests for money—for, say, medical bills or car repairs to get to a vaccine appointment.

Travel restrictions and health reasons are also giving fraudsters seemingly legitimate excuses to avoid meeting victims. “We are seeing in our reports people saying things like, ‘Oh, I can’t meet; I just got my Covid diagnosis,’” Ms. Vaca said. “So that becomes part of the story line.”

Consumers need to be vigilant, she said, but so do companies that are bound by anti-money-laundering rules to report suspicious activity. “They play a very important role in this,” Ms. Vaca said.

Preventing fishy transactions has become easier in recent years as financial institutions and money-transfer companies have beefed up data analytics tools. As fraudsters change tactics, companies can adjust systems to adapt to new patterns, enabling quicker detection of suspicious activity or dubious customers.

That in part is how

Western Union Co.

has managed to stay abreast of fraudsters’ evolving tactics, said Tyler Hand, the money-transfer company’s chief compliance officer. Improvements in the Denver-based company’s monitoring technology in recent years have led to a decrease in the number of romance scams reported at the company, including in the past calendar year, he said. Some of those changes were made as part of a settlement with federal authorities, including the FTC, over alleged failures to police customers who might be engaging in fraud.

One thing that can’t be fixed by an algorithm: human gullibility in the face of possible romance. Which is why Western Union and competitor MoneyGram International Inc. say customer outreach and education is also key.

MoneyGram strengthened its monitoring in part because of FTC allegations that the Dallas-based company failed to take steps to crack down on fraudulent money transfers, allegations the company settled in 2018. In addition to improved technology, MoneyGram also has a process to talk with customers flagged as potential fraud victims, which has helped reduce romance scams using the company’s services, according to Andy Villareal, MoneyGram’s compliance chief.

If a requested money transfer is flagged as suspicious, MoneyGram might inquire whether the sender has actually met the intended recipient before completing the transfer. The company might also tell the customer that he or she could be the victim of fraud, he said.

Such calls are often met with denial; people don’t want to believe they have been scammed because they have made a connection with the recipient, Mr. Villareal said.

“The reality is fraudsters are very good at identifying the kinds of psychological aspects that they can connect with their victims,” he said. “They exploit those and become very practiced at it.”

Write to Jack Hagel at jack.hagel@wsj.com