TUSTIN, Calif.–It’s the saddest of ironies: Valentine’s Day, a holiday all about love and affection, sees a surge in romance scams that can destroy a member’s finances and even their life. One CU is sharing what it has experienced, and what others can do.
Romance scams, of course, aren’t limited to Valentines Day, and scams aren’t limited to romance. Below, John Palmer, fraud manager with SchoolsFIrst FCU, discusses what that credit union has experienced, how it responds, and what it has learned that might also help other CUs and their members.
The CU Daily: There have been so many warnings around romance scams; why do they continue to work?
Palmer: Romance scams often show up when someone is going through an emotional time and may feel more vulnerable. Sometimes people don’t realize a scam is happening, which gives the scammer a chance to earn their trust before asking for money. We’ve also learned that scammers will do almost anything to win someone over. They use cute nicknames, give lots of compliments and make big promises about a future together.
The CU Daily: Have romance scams been a particular issue for members of SchoolsFirst?
Palmer: Romance scams are happening everywhere. Our focus is on identifying unusual money movement that may signal a potential scam and stepping in when we see red flags. When we suspect a member may be involved in a romance scam, our team approaches the conversation carefully and respectfully. Our goal is to help the member recognize the warning signs and understand that someone may be attempting to take advantage of them.
The CU Daily: Like all scams, romance scams evolve and change? What can you share about how the tactics have evolved? Is there a particular same you have seen that is particularly effective?
Palmer: Romance scams have evolved as public awareness has increased. About 25 years ago, a scammer might have claimed to be the heir to royalty who needed upfront money to unlock a large inheritance. As people became more familiar with that tactic, it stopped working as well.
Today, advances in technology like AI allow scammers to create convincing fake identities and reach victims through dating apps, gaming platforms and social media.
Cryptocurrency-related romance scams have become especially effective because scammers use fake investment websites to show victims that their money is rapidly growing. This makes the victim trust them, which allows the scammers to steal even larger amounts without the person realizing it.
The CU Daily: One issue with scams of all kinds is that often people/members either don’t know they’ve been scammed or don’t want to admit they’ve been scammed. Do you have a sense of how big the problem might be? And how does SchoolsFirst learn when a member has been scammed?
Palmer: We don’t know how big the problem is, but it’s larger than what gets reported.
Many victims feel embarrassed or ashamed and never come forward. I’m often surprised by how difficult it can be to convince someone that a famous international celebrity doesn’t need gift cards, or that U.S. service members in combat zones don’t need personal funds for medical treatment.
At SchoolsFirst FCU, we look for patterns and red flags, such as large amounts of money moving in and out of accounts. When an account shows signs of a potential scam, we proactively reach out to the member. If a member tells us that a new online love interest—someone they’ve never met in person—needs money for an emergency like a helicopter rescue from an offshore oil rig or another dramatic scenario, we know it’s a scam and do everything we can to help the Member understand what’s happening.
The CU Daily: Have you found any particular messaging/education is more effective than others in alerting members to the risks?
Palmer: We have found that specific, real-world examples are especially effective. Articles like this that mention the specifics of the scam, or radio messages and references in pop culture help people recognize similar warning signs in their own situations. When that recognition happens, it can be enough to pause and prevent a loss. In every romance scam, the scammer can only take money if the victim sends it. We consistently remind our members: never send money to someone you’ve never met in person. It’s okay to fall in love, but protect yourself and your money first.
The CU Daily: Beyond romance scams, what else have you looked to educate SchoolsFirst members about?
Palmer: We educate members on a wide range of fraud risks, including:
- Never sharing passwords, card security codes, PINs or one-time passcodes with anyone who contacts them unexpectedly. SchoolsFirst FCU will never ask for this information, and no legitimate business should either.
- Recognizing fake toll road violation text messages, which are not legitimate. Toll agencies send notices by mail, not by text.
- Understanding elder financial abuse and encouraging Members to reach out if someone is pressuring them to move money in ways that feel wrong or uncomfortable.
- Avoiding “get rich quick” schemes, which often involve fraud and can put the member at risk of financial loss or legal trouble.
- We share scam-prevention tips through email, direct mail, in-branch messaging and social media. Most importantly, we encourage members to contact us anytime they have questions or concerns. We are always here to help.
The CU Daily: What else can a credit union do?
Palmer: Because romance scams are truly unique due to being more about emotional connection than money to the victims, Credit unions should consider investing in their front line teams with training focused on empathy and compassion. It’s one thing to recognize that a member is being scammed, but how you deal with it from the credit union side can determine how much you will be allowed to help the member.
The way you talk to a scammed member can show them you understand and are there to help, or make them feel embarrassed, humiliated and judged causing them to walk out the door and never return. And it could be as simple as saying “I think you might be getting scammed.” For this reason, that special training that teaches empathy and how to have these touchy conversations is very important to consider.
