Phoenix, Ariz. - As we approach the Valentine’s Day season, the Arizona Corporation Commission’s Securities Division is warning about romance scams where individuals struck by Cupid’s arrow are financially defrauded. 

The Set-Up.

Romance scammers often use dating apps and social media to target people who are looking for love in a personal relationship. You could receive an “out-of-the-blue” direct message from a person who wants to get to know everything about you. Over time, you feel like it is true love, but your love interest claims to live far away and gives logical excuses about why he or she cannot meet you face-to-face.

The Scam.

Initially, your love interest may ask for small sums of money to pay for rent, a sick relative’s care, a plane ticket to come visit you, which is allegedly due to a sudden financial difficulty or unexpected loss of employment. You may even get paid back. However, your love interest eventually encourages you to fund a new and exciting investment that is making impressive financial returns and pushes you to invest because everyone else is doing it.  He or she may urge you to act quickly for fear of missing out then instruct you to purchase cryptocurrency or gift cards as a means of payment, both of which are difficult for law enforcement to trace.

The Aftermath.
After draining your wallet, the love interest simply disappears or "ghosts" you and moves on to the next person, leaving behind a string of broken promises and a broken heart.  Getting your money back feels like a lost cause, but you can file a complaint with the Commission’s Securities Division, a state securities regulator that can investigate and if warranted, can take legal action, ordering restitution and penalties.

The Warning Signs.

One major warning sign is related to the speed at which the perpetrators "fall in love" with their victims, a term known as “love bombing,” which means the person is constantly giving you signs of affection that are designed to manipulate and influence and are hardly credible due to the short time that has passed since the beginning of the alleged relationship.

Another red flag is your romantic conversations are not over the telephone or in- person but are quickly moved to other chat forums on apps that your love interest insists on using.  However, some of these chat forms are owned by companies that have been uncooperative and ignore subpoenas issued by the Commission’s Securities Division.

Guidelines to Protect Yourself

• Don’t trade or give money to people who you only know online. Do conduct a background check on the individual.
• Don’t invest in something you don’t fully understand. Do research about the investment and get things in writing. Know and understand the risks of financial loss.
• Don’t let the person “sweet talk” you into investing more than you can afford to lose. Do discuss the investment with a trusted, third-party and inquire with the Commission’s Investigator on Duty at securitiesdiv@azcc.gov or 602-542-0662 to determine if the person is authorized to offer and sell the investment. You can speak with the investigator about how to fill out an investor complaint form.

If you want to learn more about romance scams, visit the Commission’s investor education website, azcc.gov/azinvestor. Navigate to the Ask and Check tab and search in the Fraud Prevention Center for topics called  pig-butchering investment scams and affinity fraud.

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