ASIA: Romance scams have surged to a six-year high, posing a significant challenge for banks and financial institutions, who now face increased risks of reputational damage and potential fines. According to a February 2025 report by Moody’s featured in an article published by Asian Banking and Finance, the number of new entities and individuals potentially linked to romance scams globally skyrocketed by 14% in 2024, totalling 1,193 cases—a figure not seen in the past six years.
The rise in financial grooming scams, particularly during the COVID-19 pandemic, underscores the growing vulnerability of individuals seeking emotional connection during times of isolation. As lockdowns took hold worldwide, the financial and emotional exploitation of victims increased dramatically. After a brief dip in 2020, when new romance scam profiles fell by 29%, the trend reversed with a staggering 57% rise in 2021, as scams continued to exploit the unique conditions brought on by the pandemic.
Romance scammers often use the traditional financial system to launder the illicit money generated from their schemes, including through methods such as sextortion. This growing trend is not only a social concern but also a financial one, as it exposes financial institutions to a higher risk of being implicated in money laundering and other illicit activities.
The report highlights that the United States remains the top country for new romance scam profiles, accounting for 38% of the global total. Other major contributors include Nigeria (14%), India (12%), the United Kingdom (11%), Malaysia (5%), and China (5%). Notably, countries like the Philippines, Brazil, Canada, and Australia are also seeing significant increases.
The surge in romance scam activity is particularly striking in Malaysia and the Philippines. In 2024, Malaysia saw a dramatic rise in scam-related entities, jumping to 64 profiles compared to just 6 in 2023. Similarly, the Philippines saw a significant increase, with 45 new profiles in 2024, up from 10 the year prior.
Moody’s tracks these developments through its global screening database, which compiles data from a range of sources, including negative news stories, sanctions lists, government watchlists, and politically exposed persons (PEPs). The firm aggregates this information into comprehensive ‘risk profiles’ for individuals and organizations involved in potentially fraudulent activities.
As romance scams continue to rise, they highlight a crucial intersection between emotional manipulation and financial crime. With the stakes higher than ever, financial institutions must remain vigilant, adjusting their screening and monitoring efforts to avoid the severe repercussions of being tied to such fraudulent operations.