£40,000. £100,000. £300,000. For some, a lifetime’s savings for retirement. For victims of romance scams – usually aged 40-69 – these are the sums given to ‘boyfriends’ and ‘girlfriends’ whom they’ve never met in person. In fact, online dating fraud in the UK officially cost victims £27 million in 2015 (though the actual number is probably quite a bit higher since many victims often don't report these crimes).
In the context of personal assets accrued over a lifetime, these numbers underscore the sad story of an especially evil form of social engineering.
Once they earn their victims’ trust, fraudsters will ask for help with some problem. After victims make one payment, the fraudsters will invent another reason they need more money. And more and more. Until the victim’s assets are exhausted.
Or until someone intercedes.
Like its parent company, Ikano Bank focuses on value and simplicity in its financial services. When Ikano Bank introduced an online personal loans product promising a 10-minute application process and 24-hour deposit, it caught fraudsters’ affections.
“Before we entered the market, we anticipated fraudsters would apply for our loans with the personally identifying information that they had elicited from their victims on online dating sites,” recalls Eddie Vaughan, Ikano Bank UK’s Fraud & Financial Crime Manager. “Naturally, the victims’ information – credit history, address, bank accounts – would check out with our application systems. We knew that we needed to get better at proactively identifying these types of scam at the earliest point possible.”
Like all UK lenders, Ikano Bank is required by regulations to implement fraud-fighting measures. Failure to do so could incur penalties from the Financial Conduct Authorities.
“It was more than just a regulatory issue for us. We saw this as our responsibility, and an urgent operational and customer experience requirement,” Eddie recalls. “We weren’t satisfied by the results of our other attempts, so we looked to iovation. A number of people in the UK banking network confirmed our impression that iovation is a market leader in fraud prevention. That made the decision to work with them an easy one."
iovation’s device ID technology addressed Ikano Bank’s sense of responsibility to its customers, and its regulatory requirement for an effective control against the risk it had identified.
Now, if a customer calls Ikano Bank’s fraud line to inquire about a loan they don’t recall applying for, the lender can look up the device used to submit the loan’s application, and mark it with evidence of fraud in iovation’s Intelligence Center, the world’s largest and most complete device reputation database.
Thereafter, all other applications from that device – or any other device associated with it – are automatically flagged for review. The next time Eddie and his team encounter loan applications from any of those devices, they know to take extra caution.
“As long as people can be tricked into divulging their private information to fraudsters, we will be at risk of impersonation fraud,” says Eddie. “The victims’ applications and bank accounts will check out. We are not immune, but iovation certainly helps us to manage that risk to the greatest extent possible.”
Do you know someone at risk of falling for a fraudster on an online dating platform? Share this infographic with them: