How Credit Unions Can Protect Members From Romance Scams

By Cameron Huddleston, Editor at Large, Carefull
January 23, 2025

The number of older adults who have reported fraud losses of $100,000 or more have tripled since 2020, according to the Federal Trade Commission. In many cases, those losses are the result of romance scams. Romance scams are particularly traumatic because victims not only suffer financially but also emotionally.

Romance scams also are a challenge for credit unions to combat. Identifying victims in the early stage of a scam can be a challenge. And the longer the “relationship” continues, the harder it is to break the hold that the scammer has over the victim.

However, credit unions truly can be the first line of defense against romance scams–and you don't have to battle this alone. Through software solutions, consumer education, enhanced monitoring and effective intervention, they can protect their members from this financially devastating crime.

Educate Members on What Romance Scams Look Like

When it comes to fighting romance scams, prevention is more effective than intervention, says Bryan Denny, co-founder of Advocating Against Romance Scammers. The retired colonel from the U.S. Army has been contacted by thousands of women who believed they were in a relationship with him because scammers have been using photos of him for nearly a decade to create fake profiles on dating and social media sites to connect with women and con them into sending money. “Once that hook is set, it is really hard to pull people out of it,” Denny says.

Credit unions should be alerting members about the specific warning signs of romance scams through frequent and targeted education. Members need to know these telltale signs to avoid becoming victims:

• Romance scammers initiate contact online through dating sites or social media sites. A reverse image search often reveals that several names are associated with an image a scammer is using.
• They usually claim to be living or working overseas.
• They quickly escalate the relationship.
• They promise to meet in-person but come up with excuses not to meet. They claim that there is some sort of urgent problem or emergency and that they need money.
• They ask for funds to be sent by wire transfers, with gift cards or reloadable cards, or now with cryptocurrency.
• They coach victims on what to say or ask them to stay on the phone with them when they go to their financial institution to transfer funds.

Carefull, which partners with credit unions to protect older members from fraud and money mistakes, makes it easy to keep older adults informed about romance scams and other threats. The Carefull monitoring platform includes timely articles and scam alerts to keep members aware of the latest threats. Its team of experts also provides educational webinars to help credit union members learn how to avoid fraud and scams.

Catch Suspicious Behaviors Quickly

If a 75-year-old widow walks into a branch and asks to withdraw all the money in her savings account, it should raise a red flag. However, it’s a mistake to assume that only a certain type of member – that is, an older woman – is susceptible to romance scams and that scam-related transactions are quite so obvious.

Nearly three-quarters of romance scam victims are men, according to a survey by Javelin Strategy and Research. And early financial indicators can be transactions that don’t happen in credit unions under the watchful eyes of frontline staff, such as gift card purchases, wire transfers or ATM withdrawals to make payments through crypto ATMs.

Carefull uses AI technology to look for more than 50 types of changes in members’ financial behavior, including early warning signs of romance scams. Its alerts include insights to help members recognize risky financial behavior and take steps to protect themselves. Plus, its trusted contacts feature allows family members to stay informed and get involved to protect aging loved ones, if necessary.

Know How to Intervene

If frontline staff suspect that a member is being manipulated by a romance scammer, they should approach the member with care. “Ask gentle questions that do not criticize, belittle, or victim-blame the person,” says Cathy Wilson, licensed counselor who specializes in support for scam victims.

For example, rather than saying, “You might be the victim of a scam,” staff members could start by asking how members plan to use the funds they are asking to withdraw or transfer. If they respond with what sounds like a rehearsed response, such as “home improvements,” you could caution them not to pay in cash because they wouldn’t have a record of the transaction. You could ask whether they have consulted their accountant, financial advisor or trusted family members about making a large withdrawal or transfer.

Pointing out specific warning signs of scams can also be effective in getting members to recognize that they might be a victim. Hearing this from a trusted third party, such as a credit union employee, could help break the spell the romance scammer has cast.

Connect with our team for more information on how Carefull can help your credit union protect your members from scams and fraud.

About Carefull

Carefull is a PRT (protect/retain/transfer) service for credit unions purpose-built to protect older members, retain deposits, and bridge to the next generation ahead of wealth transfer. It is the first and only digital platform designed to help credit unions protect the daily finances of seniors while assisting the adult children who often support them.