The UK Financial Conduct Authority (FCA) has published its findings from a multi-firm review assessing how UK payment service providers (PSPs) (including banks and other businesses offering payment accounts) detect and respond to romance fraud, a growing financial crime where victims are deceived into sending money to fraudsters who engineer false romantic relationships or friendships. The review covered 60 cases across six firms and the conclusions highlight examples of good practice and areas for improvement. Whilst some firms are leading the way with proactive engagement and compassionate support reflecting best practice, these examples were not consistent across the industry and it is clear that staff play a critical role in interventions. Equally, the review also examined the effectiveness of firms' systems and controls in detecting romance fraud, to avoid missed opportunities to detect suspicious activity, including transactions to overseas jurisdictions, multiple payments over a short period and sudden increases in the value of funds being sent.
The FCA encourages firms to consider financial distress and unusual borrowing as potential red flags, and to strengthen due diligence on both incoming and outgoing payments. While some firms showed strong customer care, others failed to escalate safeguarding concerns or identify vulnerabilities early enough to intervene. The FCA expects firms to improve staff awareness, support vulnerable customers and ensure communications meet consumer duty standards. The review found that some firms rely too heavily on passive messaging, such as website content, which may not be sufficient to engage customers at risk.
Looking ahead, the FCA expects firms to review their controls, enhance staff training and adopt a victim-centred approach to better tackle romance fraud and support those affected.
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