Love has flourished during the COVID pandemic. So has divorce and fraud, as more consumers than ever report being scammed, according to new Federal Trade Commission data showing a record $304 million lost to love scams last year.

Divorce Fraud

Fraud is in the Air

The COVID pandemic has resulted in people staying physically distant, providing ample time and reason for unsuspecting people to look for relationships online and providing a lot of new reasons why scammers can’t meet you in person.

Downloading pictures stolen from the internet, your potential, future romantic partner has been building a false persona that seems just real enough to be true, but always having a reason never to meet in person.

They’ll often say they’re living or traveling outside of the United States because they’re working on an oil rig, or are in the military, or they are a doctor with an international organization.

Eventually, your love interest will ask for money. The impact can be big, with the median loss reported to the FTC being $2,500 — more than ten times higher than the median loss across all other frauds.

Why does your online romantic partners need the money? Some claim they need to pay for a plane ticket. Others to pay for surgery or other medical expenses, or to pay for a visa or other official travel documents.

Romance scams started on dating sites and apps, but many report that the scams originated through social media. Interestingly, some people are saying their biggest losses occurred when they believed the scammer had sent them money! What happened was these instances turned out to be elaborate money laundering schemes, such as for fraudulently obtained unemployment benefits.

Florida Divorce Fraud

Not unlike an online romance scam, I’ve written about various aspects of divorce fraud before. In Florida, courts distribute the marital assets, such as bank accounts, between parties under the premise that the distribution should be equal, unless there is a justification for an unequal distribution.

Some of the factors to justify an unequal distribution of the property include things like the financial situation the parties, the length of the marriage, whether someone has interrupted their career or an educational opportunity, or how much one spouse contributed to the other’s career or education.

Another important factor is whether one of the parties intentionally dissipated, wasted, depleted, or destroyed any of the marital assets after the filing of the petition or within 2 years prior to the filing of the petition.

Dissipation of marital assets, such as taking money from a joint bank account, happens a lot. Less common are scams like trying to cash stolen checks. The misconduct may serve as a basis for assigning the dissipated asset to the spending spouse when calculating equitable distribution.

Misconduct, for purposes of dissipation, does not mean mismanagement or simple squandering of marital assets in a manner of which the other spouse disapproves. There has to be evidence of intentional dissipation or destruction.

“And I don’t know if I’m being foolish”

Social distancing has complicated in-person dating. People are spending more time online. There is a general increase in the use of dating apps. And the pandemic has heightened the perceived credibility of requests for money—for, say, medical bills or car repairs to get to a vaccine appointment.

Protecting yourself can also be easy. Do a search for the type of job the person has to see if other people have heard similar stories. For example, you could do a search for “oil rig scammer” or “US Army scammer.”

Preventing fishy transactions has become easier in recent years as financial institutions and money-transfer companies have beefed up data analytics tools. As fraudsters change tactics, companies can adjust systems to adapt to new patterns, enabling quicker detection of suspicious activity or dubious customers.

That in part is how Western Union Co. has managed to stay abreast of fraudsters’ evolving tactics. Improvements in the company’s monitoring technology have led to a decrease in the number of romance scams reported at the company.

One thing that can’t be fixed by an algorithm: human gullibility in the face of possible romance. Which is why Western Union and competitor MoneyGram International Inc. say customer outreach and education is also key.

In addition to improved technology, MoneyGram also has a process to talk with customers flagged as potential fraud victims, which has helped reduce romance scams using the company’s services. If a requested money transfer is flagged as suspicious, MoneyGram might inquire whether the sender has actually met the intended recipient before completing the transfer. The company might also tell the customer that he or she could be the victim of fraud.

The reality is fraudsters are very good at identifying the kinds of psychological aspects that they can connect with their victims. They exploit those and become very practiced at it.

The Wall Street Journal article is here.

FTC consumer tips on spotting romance scams is here.

As if divorce wasn’t bad enough, the FBI warns the most common targets of dating scams are divorced women over 40. Women are courted online, and after weeks of intimacy, money is missing. This post contains a few post-divorce tips to protect yourself

Dirty Rotten Scoundrels

According to an Atlantic magazine article, scams are abundant, and Derek Alldred seems to have scammed at least a dozen women out of about $1 million since 2010.

He used different names and occupations, but the identities he took on always had an element of financial prestige or manly valor: decorated veteran, surgeon, air marshal, investment banker.

Con artists have long known that a uniform bolsters an illusion, and Derek was fond of dressing up in scrubs and military fatigues. He tended to look for women in their 40s or 50s, preferably divorced, preferably with a couple of kids and a dog or two.

The age of the internet, with its infinitude of strangers and swiftly evolving social mores, has also been good for con men. The FBI’s Internet Crime Complaint Center, which tracks internet-facilitated criminal activity, received nearly 300,000 complaints in 2016.

Of those scams, more than 14,500 were for relationship fraud, a number that has more than doubled since 2011.

Divorce Tips

I’ve written about practical tips after your divorce before. Consider that once the lawyers, are gone, who is there to guide you on the many questions? There are some immediate steps to take to ensure your hard-fought interests are protected – and your financial documents reflect your new marital status.

Once your divorce is final – meaning a final judgment is entered – you should review and revise, if necessary, the following legal and estate planning documents:

Trusts
Powers of Attorney (property, healthcare, HIPAA, etc.)
Will
Life insurance policies
Retirement accounts

What can happen if you don’t?

One example is common. If your ex-spouse remains the beneficiary of your life insurance policy and you pass away, the proceeds will go to your ex-spouse instead your children.

The opposite can also be true. In Florida, the plain language of the documents controls. To the extent your or your former spouse claimed a right to remain as the beneficiary under a life insurance policy – as a condition of the dissolution of marriage – your rights can be waived.

The Sting

The FBI warns that in many scams, women are courted online by men who claim to be deployed in Afghanistan or tending an offshore oil rig in Qatar. After weeks or months of intimate emails, texts, and phone calls, the putative boyfriend will urgently need money to replace a broken laptop or buy a plane ticket home.

According to the Justice Department, only 15% of fraud victims report the crimes to law enforcement, largely due to shame, guilt, embarrassment, and disbelief:

You feel really crappy about yourself,” Missi told me, then slipped into a tone that sounded like the mean voice that lives inside her head: “I’m a stupid woman; I’m a dumb, dumb, dumbass.

One excellent way to dispel yourself of any con-man fantasies, however, is to spend some time with the people they’ve hurt. Their victims are negotiating ruined credit scores and calls from collection agencies.

Several were so flattened by the experience, they’ve had old medical problems flare up or have struggled to go back to work.

The Atlantic magazine article is here.

Tag: divorce scams

Love, Divorce, and Fraud