Online relationships have become part of modern life, allowing people to connect across geographies, cultures and platforms. Yet, as trust and connection grow, so too can the risk of exploitation. Romance fraud is one of the fastest-growing forms of financial crime, with criminals preying not only on emotions but also on financial vulnerability. The Financial Conduct Authority’s (FCA) multi-firm review “Combating romance fraud – prevention, detection and supporting victims” highlighted how financial institutions can adopt a proactive, human-centred approach to protecting consumers from this deeply personal and financially harmful crime.
The review depicts what good practice looks like, including utilising early fraud detection, data-led prevention, empathetic victim support and cross-sector collaboration.
Scope of the Issue
Romance fraud continues to increase across digital channels, social media and dating platforms. Victims often experience deep emotional distress in addition to potentially significant financial losses.
Firms are uniquely positioned to identify red flags in customer behaviour like unusual transactions, sudden withdrawals or changes in payment methods. Yet, the balance between respecting consumer privacy and preventing harm can be difficult to define.
The FCA emphasises that effective strategies to combat romance fraud must combine technological solutions with human sensitivity.
Key Themes
The FCA’s multi-firm review identifies several areas where firms can strengthen their romance fraud response frameworks:
- Proactive Prevention
Effective prevention starts with using good data and creating awareness of the issue. Firms that integrate behavioural analytics, AI-driven transaction monitoring and comprehensive customer and staff education are better placed to intervene before harm occurs.
- Timely Detection
Recognising signs of coercion or manipulation is challenging, especially when transactions may appear legitimate. The review encourages firms to enhance fraud detection models, ensure staff receive targeted trainings and establish escalation processes that prioritise customer safety and earl detection.
- Supporting Victims with Empathy
Financial recovery is only part of the solution. Victims often feel isolated and ashamed, underscoring the importance of compassionate, well-trained customer service teams and tailored support processes. Firms that adopt empathetic approaches can not only assist in recovery but also foster long-term customer trust and loyalty.
- Collaboration and Data Sharing
Fraudsters operate across sectors and jurisdictions. Greater collaboration between banks, payment providers, law enforcement and online platforms is critical to preventing repeated targeting and stopping criminal networks. The FCA calls for enhanced data sharing and joint strategies to stop criminal romance fraud schemes.
The FCA’s Message
This multi-firm review is intended to raise awareness and guide firms towards meaningful improvements in their romance fraud frameworks. The FCA urges firms to evaluate internal controls, assess whether frontline staff are equipped to identify fraud scenarios confidently, and ensure that communication with victims is consistent, compassionate and effective.
These expectations reflect the regulator’s increasing focus on firms delivering good outcomes for retail customers, as required under Principle 12 of the FCA’s Principles for Businesses, and further detailed in the Consumer Duty rules set out in PRIN 2A.2 of the FCA Handbook. These rules outline four key outcomes, products and services, price and value, consumer understanding, and consumer support, all of which are relevant when addressing the risks and harm caused by romance fraud.
The FCA underscores that while technology is essential, human sensitivity is equally important. Empathy, accountability and education are as vital as technological tools in preventing romance fraud.
Benefits of Proactive Engagement
Firms that take effective steps to implement the FCA’s recommendations stand to gain more than compliance. They can build reputation, resilience and customer confidence.
By acting early and impactfully, a firm can:
- Enhance Customer Trust: Demonstrate a visible commitment to protecting clients from emotionally and financially devastating crime. Customers will recognise this strong commitment to consumer duty.
- Reduce Financial and Reputational Risk: Prevent customer losses and avoid regulatory penalties by implementing robust internal controls and detection mechanisms.
- Industry Leadership: Contribute to the development of best practices in fraud prevention and victim support, showcasing the firm’s commitment to responsible innovation and customer care.
Takeaways
Romance fraud is both a financial and human challenge. Preventing it requires a combination of technological vigilance and human empathy. The FCA expects firms to act proactively, equipping systems and personnel to identify potential fraud early and intervene effectively. Supporting victims with compassion is not only ethically sound, but also beneficial for business.
A collaborative, data-driven financial ecosystem is essential to deterring romance fraud and building public trust.
How can Complyport Help?
The FCA’s review into romance fraud highlights a critical intersection between financial crime prevention, customer protection and regulatory expectations. Addressing these issues requires more than reactive controls, it calls for integrated governance, cultural awareness and demonstrable evidence of proactive customer support.
Complyport can help by combining regulatory insight with practical compliance expertise to help firms strengthen defences, protect customers and align with FCA expectations.
We support clients by:
- Fraud Risk and Control Reviews: Assessing existing systems, controls and customer due diligence processes to identify vulnerabilities and enhance detection capabilities.
- Staff Training: Developing tailored training programmes that equip frontline teams to recognise behavioural red flags and respond with empathy and confidence.
- Designing Prevent Frameworks: Integrating fraud risk management into governance structures, with clear accountability and escalation procedures.
- Supporting FCA Engagements: Helping firms prepare for supervisory interactions, multi-firm reviews, and data requests by ensuring documentation, Management Information (MI) and response frameworks meet regulatory expectations.
Book a meeting with one of our Subject Matter Experts today to explore how your firm can lead in fraud prevention and consumer protection, confidently and compliantly.
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