Romance scams pose risks for banks: Moody's

New Delhi: Laundering money from romance scams presents significant reputational risks and fines for banks, Moody's said on Thursday. India ranked among the top 10 countries in the agency's database of new romance scam profiles. The United States accounted for 38% of new romance scam profiles, followed by Nigeria (14%), India (12%), the United Kingdom (11%), and Malaysia and China (5% each).

Moody's reported that 1,193 new entities and people were identified for potential ties to romance scams in 2024 - the highest number in six years. This was an increase of 14% from 2023.

Moody's noted that financial grooming scams surged during the Covid-19 pandemic, as isolation led to the need for emotional connection, and made individuals more vulnerable to fraud. "While 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," it added.