How mandate fraud is linked to romance fraud

MIAA Anti-Fraud Specialist, Paul Kay blogs about his observations of a troubling connection between mandate fraud and romance fraud, with criminals using one to facilitate the other. This trend highlights the need for increased vigilance to combat financial crime. 

During my time investigating fraud for the Merseyside Police, it became clear that fraudsters do not just target one fraud type but will target multiple different types of fraud at any one time. Some of these frauds will overlap and assist the fraudster(s) when trying to launder their ill-gotten gains. Two such linked fraud offences that I noticed were mandate fraud and romance fraud.

Mandate Fraud
A bank mandate is a set of instructions, which will include bank account details, and is used by people in a business such as the finance department, to pay suppliers. Within a mandate fraud, the fraudster will target a supplier, either hack into their emails or create a bogus email that looks legitimate, and send their customers an email, requesting their bank account details have changed. The intention is that the customer takes this email at face value, and simply changes the bank mandate instructions, namely the bank account. The next time an invoice is paid by the customer, it will be credited to the new, fraudster controlled, bank account. 

Money Laundering
What I noticed in my time in the Police is that the fraudsters will often not supply their own bank account in these instances, as they do not want to be traced and identified, so will look to use another bank account under their control, but not traceable to them. 

As such, the fraudsters may look to identify a bank account they can use to launder the monies they receive from any successful mandate fraud they perpetrate. It is here that victims of the romance fraud can become involved, as their bank account is not linked to the fraudster, and therefore the fraudster cannot be identified should this bank account be investigated by the Police. 

How Romance Fraud victims are involved
The romance fraud victim becomes involved at the request of the person they believe they are in a relationship with (the fraudster) and unknowingly they allow their bank account to be used to launder the monies from the mandate fraud to their own personal bank account, without realising that this is what is taking place. 

A fraudster will usually meet a romance fraud victim on a dating website, and they will then purport to work/or have a business overseas. Once they have got to know/established rapport with the romance fraud victim over several weeks of contact, the fraudster will claim to have short term money problems, claiming their bank account has been frozen for reasons unknown or not explained.

This will usually result in the romance fraud victim lending the fraudster monies on a short-term basis, so their fictitious business can continue to run by providing the fraudster with their bank account details. Unknown to the romance fraud victim, the fraudster may also be committing mandate fraud, whereby they supply the potential company/business victim with the romance fraud victim’s bank details as part of the mandate fraud.

The fraudster will then tell the romance fraud victim that they (the victim) will be receiving a large sum of money into their bank account, as their (the fraudster) bank account is still frozen. They (the fraudster) will request that once the monies have been credited to their (the victim) bank account, they (the victim) forward these monies onto them (the fraudster) via a given method (often involving crypto-currency). 

In some cases, the fraudster may tell the romance fraud victim to keep some of the monies credited to their account, depending on whether the victim had already lent the fraudster monies as part of the original romance fraud. This supports the romance fraud victim’s belief that the transaction and intentions of the fraudster are genuine, but what they don’t realise is that they have unwittingly enabled the laundering of monies for the fraudster using their own bank account and committed a crime.

How victims are affected
Several weeks may pass but eventually the romance fraud victim may have their bank account frozen or be contacted by their bank/police and be asked to explain why their account has been used for fraudulent purposes.

Even if they are eventually cleared of any wrongdoing - and this may take an extended period of time - during this period the victim’s own bank account may still be frozen by either their bank or the police, causing the account holder financial difficulties in addition to emotional distress. In some cases, the innocent account holder may have their home address searched, assets seized and be arrested, or interviewed under caution.

In some other cases, the romance fraud victim will end up not reporting their involvement to the police, due to embarrassment and not wanting other family members to know they had been online dating and embarrassed about their personal financial loss, which can be in the hundreds of thousands of pounds. Added to this, there is the emotional trauma caused to the romance fraud victim by the fraudster.

There are red flags to look out for to see if you are potentially the victim of romance fraud:

• They refuse to video call.
• They refuse to meet in real life.
• They are too good looking.
• They try to move conversations off the platform where you initially meet.
• They declare their love quickly.
• They claim to be working overseas.
• When they ask for money, it will be time-critical, and for a reason you can’t help wanting to help (both social engineering tricks)
• They ask you to keep “the relationship” secret.

Find out more about romance fraud from Crimestoppers.

If you have been a victim of fraud or cybercrime, report it at www.actionfraud.police.uk or by calling 0300 123 2040.