Financial Conduct Authority review highlights gaps in banks’ romance fraud controls and sets out improvement measures

The Financial Conduct Authority has published a review of romance fraud in banks and other payment firms, finding examples of strong customer protection but also missed opportunities to detect and prevent scams that cost victims more than GBP 106m in 2024/25. The review sets out practical steps firms can take to strengthen detection, intervene earlier and support affected customers. Based on a sample of six retail banks and payment firms, the FCA found prevention is complicated by victims’ reluctance to accept they are being defrauded, with 42% of reviewed cases involving customers not disclosing the true reason for payments when questioned. It identified instances where sustained, out-of-character activity was not flagged, including one case involving 403 payments over a year with losses of more than GBP 72,000, and another where a victim lost more than GBP 428,000, indicating monitoring systems could be better calibrated. The FCA also pointed to inconsistent staff capability to spot red flags and probe explanations, and highlighted the need for earlier identification of vulnerability and more consistent compassionate aftercare; it noted good practice where firms made repeated calls and closely monitored accounts. The review also underlined that 85% of cases start online, suggesting online platforms have a critical role in reducing harm.