Jumio: Why Online Love Doesn’t Have To Attract Fraudsters

The prospect of love always carries with it the prospect of danger. One can interpret that many ways — philosophically, poetically, psychologically. Right now, though, we are talking about fraud, and how criminals use online data sites to steal from consumers in search of romance or, at least, some temporary companionship.

The solution?

That would be better authentication systems, processes that include biometrics. That’s the view from Reinhard Hochrieser, director of product management at Jumio. In a new PYMNTS interview, he discussed the fraud-related dangers and costs that stem from online dating, and how stopping that crime relates to fraud defenses in such areas as online gambling and sales of eCigarettes.

In his view, providing better authentication for online dating sites — perhaps, in most cases, higher-end sites or those geared toward specific consumer segments — will see more demand in 2019, as more site operators and users come to understand the fraud-related risks of that digital activity. Global fraud related to online dating scams costs “several billion dollars a year,” Hochrieser said, “and it’s growing every year.”

Online Dating Scope

An estimated 7,500 dating sites are in operation around the world, and stands as the most popular site, with some 24 million users. It’s not just dating — sites such as eharmony appeal to those consumers who are looking for marriage, with that site reportedly responsible for 4 percent of U.S. marriages.

The appeal of online dating or marriage sites for con artists is pretty simple. With some finesse and craft, thieves located anywhere in the world can gain the trust of people who are ready to let down their guard in exchange for the prospect of a relationship.

One tactic employed by criminals — an example of the general con — is to assume the identity of a soldier posted overseas, then ask the person on the other end of the digital connection for funds to replace a mobile phone that’s been destroyed, or for travel cash so the “soldier” can supposedly visit the victim while on leave.

According to a recent account in The New York Times, a newer scam involves coaxing “victims into taking explicit photos and videos of themselves, [then threatening] to distribute them to their Facebook or Skype contacts if they don’t pay them money or help them launder money.” The article also described how such fraud is essentially operated on a mass scale, with “perpetrators [sometimes] working out of call centers in West Africa, wooing four or five people at a time.” Losses from such fraud can be extremely painful for individual consumers — between $5,000 and $10,000 on average.

Fake Accounts

The main weakness, according to Hochrieser?

“Fake accounts can be easily created,” he told PYMNTS. Indeed, it doesn’t take much to sign up for online dating sites, even the leading ones, and that means it can be easy for criminals to create fake accounts or assume the identities of real people.

Jumio’s approach to authentication is to have the consumer submit a government-issued ID. Jumio relies on its artificial intelligence (AI) and machine learning technologies, and its experience with analyzing more than 150 million documents to verify that submitted IDs are legitimate. Furthermore, it has human experts ready to review any borderline cases, with the results fed back into the system so the process can get better, Hochrieser said.

The process also involves the consumer submitting a selfie via their mobile device so the Jumio technology can confirm that the person setting up an account is, in fact, that person. “There is a huge trend toward biometric authentication” in all types of industries, he noted.

In fact, such authentication is a big of part of ensuring that online gambling and eCigarette transactions are legitimate — too many underage purchases or bets, after all, will very likely attract negative attention from lawmakers, advocacy groups and regulators. Online dating is less controversial than those two consumer activities, of course, but it’s notable that they all share a similar authentication process.

However, that doesn’t mean online dating sites or online dating consumers will always use, or even want to use, such authentication when seeking companionship. “It depends on the use case,” Hochrieser said. “And there could be different wants and different levels of authentication.” For instance, it might be more likely for a site that caters to people with graduate degrees and who make a certain level of income — or a site that focuses on making women feel safe — to want tighter authentication than a site that enables one-night stands.

Authentication Value

Hochrieser would not say how many online dating sites use Jumio authentication technology, but he did say “it’s growing,” and that increasing awareness of potential fraud from this digital activity would lead to more consumer demand for authentication — or more efforts by sites to deploy better systems in hopes of standing out in a crowded marketplace. After all, he said, pretty much everyone “has a friend” who has been a target — if not an actual victim — of an online dating scam.

No one ever promised that love and romance would be easy — arguably, the majority of human art is about the challenges of relationships and finding that special someone. However, that doesn’t mean the pursuit of companionship should be even more dangerous by the addition of online fraud.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.