Romance scams expose banks to reputational risks, fines: Moody’s

Romance scam-linked entities rose to a six-year high in 2024.

Romance scams have risen to a six-year high, increasing banks’ exposure to reputational risks and fines.

In a report released on February 2025, Moody’s said that there are 1,193 new entities and people globally with potential ties to romance scams in 2024— a 14% increase compared to 2023, and the highest in six years.

Financial grooming scams greatly increased during the COVID pandemic period, with the isolation leading to greater need for emotional connection and increased vulnerability.

Whilst the number of new romance scam profiles added to Moody’s screening database fell by 29% in 2020, they surged by 57% in 2021 as global lockdowns took hold.

Criminals often seek to launder the money generated from romance scams like sextortion via the traditional financial system, Moody’s said.

The US accounted for over a third (38%) of new romance scam profiles among top 10 countries. This is followed by Nigeria (14%), India (12%), the UK (11%), Malaysia (5%), China (5%), the Philippines (4%), Brazil (4%), Canada (4%) and Australia (3%).

The number of Malaysian entities and people with potential links to romance scams (romance scam profiles) saw a rapid surge to 64 in 2024 versus 6 in 2023, according to Moody’s.

The number of Filipino entities and people with potential links to romance scams also reportedly saw a rapid surge to 45 in 2024 versus 10 in 2023.

Moody’s database is formed from negative news stories, sanctions, government watchlists, and politically exposed persons (PEPs).

Moody’s said that it collates this information into ‘risk profiles’ of organisations and people.