Valentine’s Day is just around the corner, which means it’s one of the busiest times of the year for online dating platforms. Not only because of lonely singles looking for their significant others, but also because of dating site scams.
It’s one of the few times a year when there’s a growing number of fake identities created on dating websites. And, of course, it’s a way to start a relationship with someone with the intent of stealing their sensitive data.
As dating is one of the industries that are considered more prone to chargebacks, dating companies need to take the necessary steps to prevent suspicious activity on their websites. Not only because this affects their business, but also because it can affect the entire industry they operate in — as the more dating companies end up having excessively high chargeback rates, the bigger the chance that the entire industry will be classified as high risk.
Romance Scam Is a Serious Cybercrime
The number of romance scam cases was 64% higher in the first half of 2019 compared with the same period a year earlier. According to the Federal Trade Commission’s report, romance scams are not only the most common kind of consumer fraud but they’re also the most costly. In the US alone, their cost reached $143 million in 2018.
Scam Tracker reports that there were only 6 romance scams from February 10, 2018 to February 17, 2018, which amounted to $8,000 worth of losses. This may not seem like much, but it’s worth noting that a year later this number grew exponentially. During the same period in 2019, the 8 scams that occurred resulted in much greater losses — $50,970.
Romance scams have skyrocketed in the past few years, generating great financial losses.
Dating website owners usually observe similar patterns that lead to suspicious activity. The scenario is pretty much the same every time — it starts with an innocent chat and then fraudsters want to quickly take the conversation outside the dating site.
During Valentine’s Day it’s easier to manipulate lonely people’s emotions, so when love seekers start interacting with fake profiles, it’s best that this is spotted as quickly as possible. People don’t always know how to recognize red flags and, when feelings are involved, common sense isn’t always enough.
Keeping Fraudsters at Bay
Several years ago standard fraud controls like geo-targeting or AVS were enough, but now in the face of more sophisticated attacks, dating companies need to tweak their fraud solutions, as they may be outdated. Dating merchants need additional layers of anti-fraud tools. The good news is that when they find a reliable payment provider, such tools don’t have to come with additional costs.
“The thing is that, because of legacy technology, most of the security solutions can’t handle complex fraud attempts on dating websites,” says Lucas Jankowiak, CEO of SecurionPay. “That’s why we’ve built anti-fraud tools that simultaneously work with the payment system, so merchants can react as soon as any anomalies happen. Of course, without disrupting the customers’ experience.”
However, dating merchants should beware of overly strict fraud filters that might cause genuine transactions to be labeled as suspicious. The solution here are flexible anti-fraud filters that adjust automatically to the industry and business case.
One of the main challenges is to eliminate scammers without turning away good sales and overstepping the chargeback threshold. A layered approach can help with reducing costs spent on false positives which nowadays generate $118 billion in foregone annual revenue.
It’s no secret that criminals are shifting their biggest focus to services with less effective security systems. Without the right tools in place, the problem perpetuates and causes revenue losses.
Static Data Is No Longer Sufficient
Fraud needs to be perceived as part of a specified industry or business model. If it’s treated globally and with general settings, it’s hard to spot fraud attempts accurately.
Dating websites need solutions that are able to quickly detect fraud attempts so they are notified about suspicious activity as soon as it occurs. And if they work with a reliable online dating payment gateway, they have all the tools needed in place so they don’t have to handle it themselves.
Payment platforms focused on technological advancements turn to machine learning and AI-based tools that allow the system to automatically react in real-time. But only if they are designed to adjust to specific industry patterns. This is because basic machine learning solutions are inaccurate and slowly adapt to new fraud patterns that spring up like mushrooms.
Ahead of this Valentine’s Day, dating websites should arm their systems with highly effective anti-fraud technology to prevent getting hit, as fraud poses a major threat.
As they say, it’s better to be safe than sorry.