FRAUD
Such insights foster trust and transparency and serve as certification that clients have implemented reasonable controls.
2. Conditional onboarding
FIs could consider implementing conditional onboarding for matching services based upon overall risk ratings, disclosures from SPDD forms, and a review of key aspects of the control environment, e. g., depth of client-vetting procedures, contract disclosures and content moderation( if online). Conditional onboarding grants access, albeit restricted, according to the FI’ s risk tolerance. 36
Tips for dating services
Dating services can take notes from FIs and establish uniform minimum standards that include:
1. CDD
Sound client-vetting protocols could include adverse media checks using search strings, open-source research techniques and / or third-party verification tools. Dating services are not exempt from sanctions compliance obligations( though not subject to strict compliance programs like FIs) and should explore their exposure, considering if and how they might be engaging in business with sanctioned individuals or in sanctioned jurisdictions.
2. Risk rating and ongoing behavior monitoring
Dynamic risk scoring throughout the customer relationship is another compliance best practice that FIs rely on. Monitoring behavior over time enables dating platforms to risk rate customers and cluster accounts exhibiting similar suspicious behaviors or that appear interconnected. This could lead to detecting coordinated efforts ― like romance scams and mule activity ― perpetrated by criminal groups.
3. Risk and control inventories
FIs typically maintain inventories of risks, mitigating controls, red flags, fraud typologies and trends, suspicious activity patterns and governance documents. Dating services may want to consider maintaining similar inventories of scam / fraud types and behavioral red flags, and accordingly mapping controls to current risks to identify opportunities for enhancements. For example, clear contract terms and refund policies, along with explicit client acknowledgement, could serve as mitigating controls for charge-back abuse.
4. Content moderation and behavioral analytics
Online dating platforms are not legally required to moderate user content, though it is a regulatory expectation, particularly in jurisdictions with stricter online safety laws. Preemptive content moderation provides users with a safety net, potentially minimizing scams, harassment and hateful / explicit content. It also demonstrates to payment partners that the industry is raising standards and addressing illicit behavior. Platforms can level up by employing behavioral analytics, similar to transaction monitoring implemented by FIs, and leveraging artificial intelligence( AI) to search for key words, patterns of suspicious behavior or explicit or AI-generated images. They could also leverage sentiment analysis to detect financial grooming, manipulative language and indicators of potential scams, 37 pig butchering 38 and fake profiles.
5. Location monitoring and screening
Most online dating platforms collect geolocation data to match users in close proximity. However, VPNs are widely used to mask locations, circumventing geo-restrictions and obscuring jurisdictional risks. VPN use also complicates user authentication and enables account takeovers and creating multiple accounts. Dating platforms can implement processes to screen user IP addresses against IP reputation databases 39 and leverage their location monitoring capabilities to:( 1) perform velocity checks to detect improbable location shifts and( 2) analyze login data to determine if multiple accounts are accessed from the same VPN IP addresses or devices, potentially detecting bot or fraud ring activity.
What is next?
The dating industry is approaching an inflection point, where compliance-grade governance may no longer be discretionary. By borrowing risk management and compliance frameworks that FIs employ to fulfill Federal Communications Commission requirements, matching services can demonstrate risk awareness and improve their standing with necessary mainstream payment partners. The industry can also benefit from partnerships with compliance consultants to create lightweight frameworks in the absence of formal regulations.
Surprisingly, the“ Dating or Defrauding?” campaign has yet to engage industry players. 40 But community engagement to spread awareness and discuss compliance expectations, even in their most basic forms, has been precedent for other previously underregulated industries. This type of collaboration should be invited; participation will indicate the industry is willing to align on expectations with its partners, consumers and authorities.
Trisha Gangadeen, CAMS, independent AFC expert and financial crimes writer, Las Vegas, NV, USA, trishagangadeen @ gmail. com, 54 acamstoday. org