From romance to crypto investments to broke: The pandemic’s latest dating scam

Jordan All romance scams begin the same way, with a promise of love and an end to loneliness. And they all end the same way too, with heartbreak and an empty bank account. But increasingly, the methods scammers use to navigate from point A to point B are becoming more complex, harder to spot and more difficult to seek justice for in the aftermath. A pandemic that gave scammers the perfect reason not to meet in person has combined with a spike in the average person’s willingness to invest in cryptocurrencies, to create a kind of perfect storm. So what does a modern day digital romance scam look like? It looks a lot like a normal connection with someone in your city on a trusted dating app. It looks a lot like a smart investment that you can watch and even withdraw funds from at first. In short, it looks pretty normal until it’s not. Here’s how that works.

I’m Jordan Heath-Rawlings. This is the Big Story. Carlo Handy Charles is a dual PhD candidate, first in sociology at McMaster University, second in Geography at the Université des Antilles. He’s written several pieces on exactly how these modern day scammers operate. Hey, Carlo.

Carlo Handy Charles Hi, Jordan.

Jordan Why don’t you just begin maybe by running me through the kind of scenario that you’re talking about in some of your work here. Can you explain how this kind of transnational dating or romance fraud typically works online?

Carlo Handy Charles So the way it works is the following: somebody matches with you on a dating app. It can be any of the major dating apps that we know Tinder, Bumble, even Grindr. And the person starts developing a relationship with you without you necessarily knowing it. The person is very nice at the beginning. So for most of the people who are unfortunately victims of that, they explained that the chat started as something very normal and very low key. So it’s a few messages. The person is not too insistent about anything. The person basically presents themselves as somebody who is a professional working in the same city, which is really important. The person has the dream of being in a committed relationship. The person is looking for love and that’s how the relationship starts.

So from that first conversation, that scammer or that criminal, as I prefer to call them, lure the victim to go onto any of the messaging apps, Telegram, for example, WhatsApp, and they start talking because on these apps, as we know, conversations are encrypted. So there is no way, as far as we know, that companies like Meta, for example, or Telegram can control or intrude into the conversations that people are having on this messaging app. And then they started talking to you slowly to do what they call in their own language, basically fatten you up, so they’re giving you enough food basically in order for you to not suspect anything. So these conversations entail sending you a message in the morning to know how you slept the night before, how you woke up, how you felt, and then all of those things, and then they may message you…

Jordan I want to stop you for just 1 second right there, because I’m kind of fascinated by this. So this person is pretending to be in the same city as their victim. Do they ever meet in person? Are they constantly trying to not do that? How does that part of it work?

Carlo Handy Charles I mean, most of these scams happen specifically during the first two years of the Pandemic, the first year and a half of the Pandemic, 2020. So the idea of meeting in person was not necessarily available for many people because everything was closed, restaurants, bars. And then there were very strong public health measures to discourage people from meeting up. And we remember the idea of the bubble. You have just one person or a few people in your bubble, your family, your close friend, and that’s it. So it was kind of normal during the Pandemic for people not to meet. So most of these relationships they developed online and people never met these scammers.

Jordan So what happens then? How does it turn from this constant reinforcement? How was your day? Nice to hear from you this morning, et cetera, to a point where it starts to become dangerous? When does that happen?

Carlo Handy Charles Yes, I think it’s something that we really need to delve into. And that’s the reason I wrote this article, because I think most people don’t necessarily understand how scams like this happen. Most people would most likely judge people who are victim of it instead of trying to understand. The way that I explain it is if you have somebody who is messaging you every day, morning and night, and during the day to know how you are, positive messages. There is no request for money. There is no interest in having any of your personal information. The person is just being nice to you, then it kind of develops into a relationship of trust and confidence.

For example, one of the victims who still lives in Boston, she said that she lost $2.5 million during the course of a few months when she started investing. And the reason that happened because she had cancer at the time. She had recovered a few months earlier. And then a few months later, cancer reappeared. She was going through a separation from her husband. She was alone, living in a house, and she was receiving these kinds of positive messages every day. So then every day that kind of builds up into that relationship where you trust that person that you have never met, really. But then you trust it because you feel like this is somebody who cares about me. And the person shows that they really care for you in the sense that they’re asking you what you’re doing during the day. They may even give you advice on things to do. If you tell them that you’re going to go out for, let’s say, doing whatever you need to do, they’re going to tell you, pay attention to Covid protocols, wear your mask and things like that. So those are people who are really good at what they do. And the aspect of living in the same city is something that they tell people in order for people not to suspect that there are scammers, because if they tell you that they live in the same city, but because of Covid that you cannot meet, then it’s much easier for you to say, okay, it’s all good. We’re going to meet at some point when the Covid-19 restrictions are lifted. So that’s how these relationships, they become very dangerous over the course of a few weeks or a few months.

Jordan How does the money come into it and when? You mentioned it’s an investment, and that’s one of the reasons we wanted to talk to you. We’ve done an episode about romance scams before, and the perps MO in that situation was to be getting in trouble, right? Like, oh, my gosh, my plane ticket got canceled. I need $300 to get my plane ticket. Or my friend is in jail. I need to bail them out. Like all these unfortunate situations, which probably smell a little suspicious after one or two times, but this is an investment pitch. Tell me how it works.

Carlo Handy Charles So the way that works, as I said, we have to think and to keep in mind the idea of building trust. Right? Building a trusting relationship over time, over a few weeks, over a few months. So then when this trust is there, and then we have to say that these cameras, they use scripts. That’s really important because what they are doing, they are not doing it only based on how things are evolving. They are doing it based on a particular script that is created by people who have knowledge in psychological profile, for example, the algorithm to know what works on which customers, because that’s how they call the victims, customers. Those are clients for them.

So then at some point when they are really sure that the person they are communicating with trusts them. They start telling the person that they have invested in cryptocurrency as a side hustle, basically. So, for example, let’s say I am somebody who is talking to somebody who is a scammer without me knowing it. And over the course of a few months, we have been chatting. The person knows enough about me and then about what I do for a living, about even not how much money I make. But whatever struggles I may have in life, then the person tells me the same thing about them. Right? They’re working for this company. They are making that type of money. But in addition to the salary that they have at this company, they’re also investing in cryptocurrency. And their investments in cryptocurrency have made huge returns.

For example, if the person pretends to be a beauty salon owner, they’re going to tell you, I do that for a living every day. But then what I do on the side is to invest the money that I’m making into cryptocurrency. So then the past month I’ve been able to make $20,000, $50,000, $100,000 of benefits without counting the principal amount. So they basically drop a hint the first time without asking you to invest in anything. And then they keep dropping basically hints to you. By the time that they ask you to invest, or they suggest that you invest with them as a couple, for your future together, you do it because you have been talking with that person for a long time. You have built trust with that person. And the person has also made enough money in the side investment thing.

Jordan What happens once you make that investment?

Carlo Handy Charles So they tell you about this investment, they tell you about all the returns that they’re making, and then they suggest that you invest a very small amount of money first. So then they can tell you, okay, in order for you to judge the quality of that investment, I’m going to suggest that you invest $500, for example, $200 or $100, which is not that much money for a lot of people. Specifically, if you’re like, in your 30s, your forties, you have worked enough, you have had some savings in the bank. And during the pandemic, you have not spent a lot of money because you have been at home. So you have some money, and then you want to do some projects with that money. Then when they tell you to invest a small amount of money, they tell you to go through legitimate investment platforms.

So depending on where they’re talking to you and which country they’re scamming you in, for example, if you’re in the US, they’re going to tell you to go to a legitimate Crypto.com platform, or Coinbase. Those are legitimate platforms that people use to invest in cryptocurrency. And then after you register for all of that, they send you a link. And the link that they send you is the link of an investment platform where you are supposed to invest your money. And the investment platform is supposed to be better than the legitimate apps where you are investing your money, which means that you buy cryptocurrency on legitimate platform. Then immediately they ask the victims to send their money to that specific platform, which is a bogus platform, which is a fake platform that they control, that they set up, that they manipulate to make it look like the money that you’re putting down has been invested and you’re getting returns out of it.

So then the first very small amount that you invest, whether it’s $50 or it’s $20 or even $100, depending on your income capacity, your income level, they manipulate the fake platform that they create to make it look like you have made some investments. So if you invested 500, they make it look like you have made $200 of returns out of the $500. So now that you have invested 500 and plus you have 200, you have 700, you’re like, oh, that’s basically working. And then so that’s how they get most of the victims to invest the money, basically to send the money to them, because it’s not investment really, it’s the victim sending the money to them. And then in order to convince the victim that the entire investment is real, they actually allow the victim, because again, they manipulate this website, they allow the victim to withdraw that money. So if you have invested 500, you have had 200 as returns. They allow that victim to withdraw the entire 700 to the bank account.

So imagine you as a victim, you withdrew $700 from a $500 investment. You’re happy with it, right? So you want to keep doing it. And you trust them because you’re able to have this money back to your bank account, it’s not like something that stays there forever. No, you’re able to have it in your normal Bank account that you can use it right after. So then a lot of people, they are lured into these investments. That’s the reason we’re hearing people in the US and Canada losing huge sums of money, like people in Canada losing like a million dollars. I read a case of somebody in Montreal losing $400,000. That was an apartment that the person was going to invest in. There is a person who actually contacted me after publishing my first article in March, and the person told me that they lost almost a million dollars. It is incredible. It is incredible. But that’s how they actually manage to make people invest.

Jordan What options does somebody have once they either discover that this is a scam or their savings drop to zero and the person stops contacting them? Like it’s crypto, right? This is why they’re using crypto, because it’s unregulated?

Carlo Handy Charles Yes, that’s absolutely right. That’s exactly the reason they’re using it. They’re using crypto because crypto is still not regulated yet, which means that there’s not enough government oversight on it. Specifically because crypto promotes this kind of decentralized finance. So there is not a specific government body or central bank that regulates this. So then they use crypto to make people invest. So your question, what are the options? As of now, what I’ve heard, I’ve heard that in the UK, some people were able to file for reimbursement refund from the banks and some of the banks in the UK, they have been able to help people who have been lured that way, women specifically, to recover some of the money.

But some of the other options is immediately if you have invested that money and immediately you found out that it’s a scam, then the best way to do it is to contact whatever bodies, for example, in Canada, the Canadian Anti-Fraud Center, it’s the police or the crypto trading platform, the legitimate one where you bought the crypto, to see what they can do. But in most of the cases, they are telling you that crypto, once you buy it, it’s gone. When you’ve sent it, it’s gone forever. It’s not reversible. So they get stuck with zero money on the savings. But also a lot of them have taken out loans. For example, I’ve read a recent case in the UK, as a matter of fact of somebody who lost £113,000 and that person had taken several loans to keep investing over the course of several months thinking at some point that he was going to make some profit and repay those loans immediately and all of that. So that speaks to how insidious all of that is, and how good they are at convincing people to take loans to invest. Which is incredible.

Jordan So how do we stop this then if you’re not going to be able to catch it on the back end? Because once the money goes, it’s gone. Where can you kind of nip this in the bud on the front end so that it doesn’t get to this point?

Carlo Handy Charles Yeah. So on the front end, I think what I’ve been saying so far is that we need a coordinated effort from obviously the government, specifically the part of the government that deal with scams and fraud. We need more awareness about this. And when I talk about awareness, I’m not only talking about putting just a message on the website, this is not enough awareness. We need ads on TV, we need ads wherever we can have ads in order for people to get used to it. The reason I’m saying it is because since 2020, since the pandemic, most of us we have used online technology in a way that we have not used before. So we have had to adapt so quickly to that world of technology that a lot of us, we didn’t know existed before. And then so there was a learning curve in terms of how much you learn, how much you know about how things happen. So then in order to accompany to guide the population in learning how online technology works, we need more warning, more educational videos and prevention about how scams work.

We have known for a few years now that the world of cryptocurrency is one of the preferred methods of payment of criminals. Then why not warn the public more about that kind of way of defrauding people? So that’s what I can see the government do. But also the government should allocate much more money to police departments to be able to fight this. We talk about the idea of Privacy and anonymity in the world of cryptocurrency. But if there is enough money that is out there, it is possible to hire good tech people to follow the money, to see where the money goes. So we have seen a few documentaries now on how people who are tech savvy, who are working in the technology world, how they have been able to follow money and then to see where this money goes and then who is able to receive this money. And we have had some big cases in Canada, in the US where some people have been arrested in the black market because the police departments, they have been able to follow. So we know that’s possible. We know it is possible. So then as it’s possible, what we need to do is dedicate more money. That’s what I see the government do.

But this coordinated effort should also be done on the part of the financial institutions. For example, know your customer, is something in Canada which is mainly related to the idea of knowing who you are transacting money with and things like that. But also I think we need to have a more holistic approach of customers in the sense that if a person has had the bank account with you for ten years, for 20 years, they have never withdrawn that much money in such a short period of time, and you are the financial adviser, at some point, I think there is some follow up that needs to be done to really understand whether the person is investing that money in something that the person may regret later. So I think it’s the idea of caring for your clients or caring for your customers. In addition to obviously putting videos out there and engaging more, even the apps that the banks have, they can send messages and notifications on the apps that tell people when there is a new big scam going around. So then people can really be warned about it.

And also we need the media to be much more upfront with the idea of talking about frauds like you’re doing in this series. We need more series like that because frauds, they are happening every day. But then because after the fraud, so many people are so ashamed of it, they don’t share the experience. And then the more you don’t share, the less you share your experience, the less people know about them, the less we’re able to prevent the massive scale of what happens. So we need really coordinated action on the part of several institutions and government bodies in order for us to prevent that before it happens. And more regulations of crypto, we definitely get to a point where now we need to regulate crypto more. We need to really understand. Because that’s becoming something big. It’s not just a few people transacting money, it’s billions and billions of dollars. Only in 2020, $14 billion were lost in cryptocurrency fraud. So then we need to be able to do something to protect people.

Jordan Carlo, thank you so much for this. Really fascinating.

Carlo Handy Charles Thank you very much for having me Jordan, I appreciate the conversation.

Jordan That was Carlo Handy Charles. And that was The Big Story. For more from us, head to the thebigstorypodcast.ca, find us on Twitter at @TheBigStoryFPN, email us hello@thebigstorypodcast.ca @TheBigStoryFPN, and call us at 416-935-5935. Ask us a question about the podcast, or demand that we cover your preferred topic.

Thanks for listening. I’m Jordan Heath-Rawlings. We’ll talk tomorrow.

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