Recently we have seen several matters coming to Duxton Hill that involve romance scams.
In the past year, romance scammers have cost Australians in excess of $28.6 million and account for one fifth of all scams reported to Scamwatch. These scams are particularly devastating, as they have a financial, emotional and psychological toll on victims.
How does they work?
Romance scams are not confined to dating sites or applications- they also include conversations started via Facebook, Instagram, WhatsApp, Viber and more. They can be relatively simple or extremely sophisticated.
Generally, scammers tend to express strong emotions for an online victim in a relatively short period of time. They will go to significant lengths to gain the interest and trust of their victim and will rarely communicate by phone, video chat or webcam. Eventually, there will be a request involving finances or goods. The manner in which scams are perpetuated is varied and can include a request to receive or transfer money or goods.
Particularly sophisticated versions of scams that we have encountered involve cryptocurrency, currency exchange and financial trading. Scammers often subtly persuade victims to engage in a financial scheme where they are promised to make money. Sophisticated scams are particularly problematic, as they give the impression that a person is dealing with a large and reputable organisation, resulting in victims losing significant amounts of money. We have seen cryptocurrency matters where a scammer has approached a victim on a dating app and has eventually persuaded them to start investing in cryptocurrency. Once investing, the scammer uses false ‘mirror-image’ webpage which shows the victim appearing to make money. The appearance of making money then encourages the victim to continue to invest. Scammers will also tell victims to talk to a customer representative once they have created an account or downloaded an application, so it appears that there are several people involved in a legitimate business. There has also been a trend of requests for payments to be made into Australian banks and not overseas. The appearance of a professional website/application, local transactions and the perception of multiple people being involved in a business solidifies the legitimacy of these scams.
What generally happens to victims?
Contacting the bank
Victims often contact the financial institution through which they deposited their money, tell them they have been the victim of a scam and request their funds be returned. The bank will usually respond that if a person authorised a transaction then the bank is not liable to return the funds. The bank may contact the person/s who scammed a victim and request the funds be returned, however this is likely to be the limit of their involvement. Victims expect banks will tell them the identity of the person who received their money, so they can pursue the matter; however for privacy reasons, without being ordered to do so by a court, a bank will not inform anyone of the details of a recipient, regardless of the circumstances.
Contacting the police
Victims will also contact the police to attempt to recover their funds. However, they are often surprised to learn that the police have no duty to recover money, as they are primarily concerned with criminal convictions rather than civil matters. Police also do not have the time or resources to investigate all reports of fraud and if the money goes offshore, police also face jurisdictional difficulties. Overall, it is highly unlikely the police will be willing or able to assist in routine matters of fraud and scams.
How Duxton Hill can assist victims of scams
Our fraud lawyers and fraud investigators have significant experience in advising on legal strategy and conducting in-depth fraud investigations in order to ensure effective and fast legal remedies in the recovery of stolen assets.
The primary advice we give to the victims of romance scams is to act act quickly, as this may prevent stolen assets and funds being transferred, laundered, or moved overseas.
Some of the types of action Duxton Hill may take to maximise recovery of funds in romance scams, include freezing orders (to restrain a perpetrator or third parties from dealing with funds), search orders (to seize evidence) and court orders compelling Banks to disclose information.
Duxton Hill has its own internal capability to perform general investigation services. In cases where we require external consultants to provide more specialised investigation services, we have established the necessary close relationships and alliances with specialist fraud investigation and other third-party service providers. Therefore, we can provide a global reach and network of internationally specialised professionals to serve our clients’ needs, irrespective of jurisdiction. This means when a person has been the victim of a romance scam, we can provide a fast, coordinated, and international legal response.
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Jena Murtic, Lawyer