In 2024, romance scams surged to the highest level seen in six years, posing significant challenges for financial institutions worldwide. According to a report published by Moody’s in February 2025, 1,193 newly identified entities and individuals were linked to these scams, marking a staggering 14% increase from the previous year.
This alarming trend not only raises concerns about consumer safety but also heightens banks’ exposure to reputational risks and potential fines. As scammers exploit emotional vulnerabilities, they increasingly target unsuspecting individuals through online platforms, creating complex webs of deceit.
Financial grooming scams, which often precede larger fraud schemes, have become more prevalent. These scams manipulate victims over time, leading them to develop deep emotional connections with their perpetrators.
As the landscape of online fraud evolves, financial institutions must bolster their defences and implement stricter monitoring measures to protect their customers and themselves from the repercussions of these scams.
During the COVID-19 pandemic, financial grooming scams experienced a significant rise, mainly due to the isolation and emotional distress many individuals faced. With social interactions severely limited, the longing for connection made people more susceptible to manipulation.
While Moody’s screening database recorded a 29% decrease in new romance scam profiles in 2020, this trend reversed dramatically in 2021. As global lockdowns intensified, the number of reported scams surged by an alarming 57%. This spike highlights the growing vulnerability of individuals seeking companionship during unprecedented times.
Criminals capitalized on this emotional need, often using romance scams, including sextortion schemes, as a means to exploit their victims financially. Once they obtained funds from these scams, they frequently sought to launder the money through traditional financial systems, complicating detection efforts.
The surge in these scams underscores the importance of vigilance and awareness in both personal relationships and financial transactions. Joining communities like Asian Banking & Finance can provide valuable insights and resources to combat these evolving threats.
The United States has emerged as a significant hub for romance scams, accounting for an alarming 38% of new scam profiles among the top ten countries. Nigeria follows this at 14%, India at 12%, and the United Kingdom at 11%. Other countries on the list include Malaysia and China, both at 5%, the Philippines at 4%, Brazil at 4%, Canada, and Australia at 3%.
In a concerning trend, Malaysia has seen a dramatic increase in entities and individuals associated with romance scams. In 2024, the number surged to 64, compared to just 6 in the previous year. Similarly, the Philippines reported a rise, with potential links to romance scams jumping from 10 in 2023 to 45 in 2024.
These statistics come from Moody’s database, which compiles information from various harmful news sources. The rapid growth in scam profiles highlights a growing global issue that demands attention and action.
Moody’s database is a comprehensive repository that aggregates various forms of negative information. This includes news stories that highlight adverse events or controversies and data related to sanctions imposed by governments around the world.
Additionally, the database incorporates entries from government watchlists, which are designed to identify individuals or entities that may pose a risk due to criminal activity or financial misconduct. Another critical component is the inclusion of politically exposed persons (PEPs), who are individuals who hold prominent public positions and may be more susceptible to corruption or bribery.
Moody’s synthesises this diverse array of information into detailed ‘risk profiles’ for organisations and individuals. These profiles provide an in-depth analysis of potential risks associated with doing business with these parties.
By leveraging this data, companies can make informed decisions and ensure they mitigate exposure to financial and reputational risks. The insights derived from Moody’s database are essential for compliance, risk management, and strategic planning in today’s complex regulatory landscape.
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