Romance scammers are increasingly convincing Americans to take out lines of credit against their own houses — or stealing their homeowners’ personal information and taking out those loans directly, according to a team of researchers.
Every year, thousands of Americans report to the FBI that someone online tricked them into believing they had developed a romantic relationship, only to discover it was a scammer merely seeking their money. Often, the criminals spend a few weeks or months establishing trust, then claim to have encountered some kind of emergency situation for which they immediately need money.
The kinds of loans, called Home Equity Line of Credit (HELOC), that are being targeted by the scammers are a line of credit that a bank or other financial institution will extend to a homeowner using their home as collateral. They can be particularly risky for a person in financial straits — as victims of romance scams often are — because failure to repay them can result in a bank seizing the person’s home.
The research, conducted by SentiLink, a company that provides identity verification and fraud analysis on behalf of banks and other financial companies, found a sharp rise in suspicious HELOC loans over the last months of last year. The findings dovetail with a spate of romance scammers on social media, particularly Telegram, promoting HELOC fraud as an effective new way to bilk victims out of even more money.
“I think the fact that these guys are transitioning from asking folks to send their own savings to taking loans is kind of scary, to be frank,” said David Maimon, SentiLink’s head of fraud insight, who led the study.
Last year, the banks and financial companies that partner with SentiLink received about 87,000 HELOC applications from people 55 years or older, the report said. The researchers then narrowed that number down by only looking at instances where the same person attempted to take out three other loans within the previous week, “a pattern consistent with coordinated identity misuse rather than legitimate consumer behavior.”
That analysis found 761 HELOC applications last year. The majority of those, 472, came in the final months, peaking in December with 199, indicating the scam is rapidly escalating, Maimon said.
While the report does not explicitly tie the suspicious loans to individuals, Maimon has also found a rise in recent online material where Yahoo Boys — prolific scammers tied to West Africa, particularly Nigeria — encourage their peers to exploit HELOC loans.
More of a loose affiliation of cybercriminals than a cohesive group, Yahoo Boys often share advice on social media on how to scam victims.
Researchers in recent years have uncovered detailed Yahoo Boys training manuals on how to conduct “financial sextortion,” where they blackmail victims — sometimes minors — by threatening to distribute sexually explicit images of them. Social media companies periodically purge accounts believed to be tied to Yahoo Boys scams.
Yahoo Boys are also prolific romance scammers. They convince victims that they’re young, attractive men or women looking to build a trusting relationship — and then fake an emergency arises for which they quickly need large amounts of cash.
One example from a Yahoo Boys Telegram account Maimon shared with NBC News gave explicit instructions to convince victims — which they call “clients” — to take out a HELOC loan.
A YouTube video that Maimon shared with NBC News, titled “How Yahoo Boys Cash Out From HELOC!” and uploaded in November, gives step-by-step instructions on how to conduct the scam as Maimon described it. YouTube did not immediately respond to a request for comment about the video, which is still live.
There is an additional technical indicator that shows that many of the suspicious HELOC loan attempts may be fraudulent: A substantial number of the ones made online appear to be made from people who use Virtual Private Networks (VPNs), a technology used to obscure where a person is browsing from.
In some cases, SentiLink observed the same identity applying for multiple HELOCs at the same time.
“This kind of burst activity is consistent with a scaled fraud operation that tests multiple lenders for weak points, racing approval timelines, and increasing the odds of successfully extracting funds before the victim or institutions can detect and disrupt the scheme,” it found.
The report warned that Americans should be extremely suspicious of people on the internet trying to convince them to apply for HELOCs.
“No legitimate romantic partner, business associate, or ‘trusted contact’ should ever ask you to borrow against your home, open new financial accounts on their behalf, or move money quickly for secrecy or ‘safety,’” it said.
“This is not incidental fraud: it reflects a deliberate strategy to convert a victim’s largest and most stable asset into liquid cash.”
