Romance fraud is a growing form of financial crime in the UK, and one of the most personal and challenging to tackle.
The Financial Conduct Authority (FCA) last month published the findings of its multi-firm review into how banks and payment firms detect, prevent, and respond to romance scams. It found that while some firms are improving, others still struggle to identify warning signs or support victims effectively.
In this article, we explain what the FCA found and how firms can strengthen their approach to prevention and victim support to meet expectations under the Consumer Duty.
Background and Context
Romance fraud occurs when someone is deceived into sending money to a person they believe they are in a genuine romantic relationship with.
These scams often unfold gradually, with criminals building emotional connections before asking for financial help. Criminals often target people on dating apps, posing as potential romantic partners before asking for money. These scams can be sophisticated, and have cost Britons more than £106 million in the last year alone.
Yet tackling romance fraud can be challenging. The fraud often takes place entirely outside the financial system, beginning on dating apps or social media platforms long before any payment is made.
By the time money changes hands, victims are likely convinced of the relationship’s authenticity. This makes traditional transaction monitoring less effective and staff intervention more delicate, as victims may resist warnings or refuse to believe they are being defrauded.
Despite these challenges, tackling fraud is high up on the Financial Intelligence Unit’s (FIU) agenda. The National Crime Agency’s (NCA) 2025 System Prioritisation identifies fraud as one of the UK’s top national security threats. It calls for stronger partnerships between banks, payment firms, technology platforms, and law enforcement to disrupt criminal activity and protect consumers.
The Results of the FCA’s Multi-Firm Review
The FCA’s review paints a mixed picture.
While some firms have made progress in detecting unusual payment behaviour and supporting victims, others lack the consistency, data insight, and staff confidence needed to respond effectively.
| Area Reviewed | FCA Findings |
| Detection and Monitoring | Many firms rely on transaction triggers that miss the subtle signs of romance fraud. Some are developing behavioural analytics to better identify unusual activity. |
| Customer Interaction | Victims often believe they are helping a partner and may resist staff intervention. Firms struggle to challenge these situations sensitively and effectively. |
| Victim Support | Responses vary widely. Some firms offer compassionate, victim-centred support, while others apply rigid scripts or inconsistent reimbursement processes. |
| Training and Awareness | Good examples exist of specialist training for front-line staff, but these practices are not yet industry standard. |
| Governance and Oversight | Some firms have unclear accountability for fraud prevention, leading to fragmented responses and inconsistent outcomes. |
The FCA highlighted examples of good practice, including early intervention, well-trained fraud teams, and clear communication, but said that overall standards must improve.
Preventing and Detecting Romance Fraud
Prevention starts with understanding behaviour.
Traditional transaction monitoring can miss romance scams because payments often look legitimate. The FCA encourages firms to use a broader mix of indicators, such as repeated payments to unfamiliar recipients, patterns of emotional distress during calls, or unusual account activity following online contact.
The regulator’s review also points to the value of public awareness. Timely, well-designed warnings, whether through in-app messages or direct outreach, can help “break the spell” before a transfer takes place.
Collaboration across the sector will also be key. The NCA has stressed the need for data sharing between banks, payment service providers, and law enforcement to track emerging fraud patterns and intervene earlier.
Supporting Victims and Building Trust
Romance fraud victims are often left dealing with both financial loss and emotional trauma.
The FCA expects firms to treat them as potentially vulnerable customers under the Consumer Duty. This means offering empathetic communication, practical support, and fair treatment, including consideration of reimbursement where appropriate.
The Last Word
Romance fraud is not only a financial crime; it’s a complex issue that requires a thoughtful response from firms. The FCA’s findings make clear that protecting customers from this form of fraud requires more than technology alone.
For payment firms and banks alike, success will depend on combining strong systems with understanding, ensuring every response reflects both the human and the financial realities of fraud.
If your firm would like support in reviewing its fraud prevention framework, assessing controls against the FCA’s expectations, or developing staff training to better identify and support vulnerable customers, the API Compliance team can help. Please get in touch using the contact form.
