What is catfishing?

What is catfishing?

Joseph Darby

A match on Tinder has led to financial trouble for at least one young Kiwi

In an interesting move, New Zealand’s financial markets regulator has just released a warning about catfishing on dating application (“app”) Tinder, reporting that at least one young Kiwi professional has been scammed out of more than $100,000. This was no rookie scam, the cat-fishers went to significant effort over a five-month period.

What is catfishing?

Catfishing is a common name for such online deception, which usually involves:

  • The creation of a fake online persona on a dating or social media website,
  • This persona is used for deception of some kind,
  • A specific person or a demographic (group of people perhaps with common ages) may be targeted, and
  • While catfishing is usually used for financial gain, the purpose could instead be to intentionally upset someone or compromise the victim in some way.

Catfishing relates to a concept called the online disinhibition effect, which refers to the lack of restraint a person might feel when communicating online in comparison to communicating in-person. Studies have shown that people feel safer saying things online which they might not say in real life because they have the ability to remain completely anonymous and invisible behind the computer screen.

What happened?

Over a five-month period, “Tom” was reportedly groomed by a woman he first met on Tinder. The young woman said she travelled a lot between Hong Kong, Singapore, and China. The deception included her sending Tom videos showing displays of her own wealth, such as buying clothes and a café she said she owned.

Tom, a young professional, even had video calls with the woman where he could clearly see her face. Their discussions turned to investing, as Tom is a keen amateur investor himself. The woman set up Tom with a demo foreign exchange (forex) trading account and built up his confidence with it.

Tom was soon referred to a second woman who was reportedly a VIP adviser, and offered access to a legitimate overseas trading platform, where he was listed on it alongside legitimate traders. This included leveraged trading, that is, high-risk trading or investing using borrowed funds. Reportedly: “You could see your account, so when I did trade that showed up,” he says. “All of it matched other brokers, there was no time delay, the tickers matched, and the data used was accurate.” He soon saw his initial deposit grow, and trading “The trade information … was very good…. She said she was not really allowed to share her VIP analyst data with me but did it anyway.”

Things changed for Tom, though, when he supposedly suffered a significant loss due to forex volatility. Tom was pressured to send more money to recover the losses and reach VIP status by having over US$60,000 invested by a certain deadline. Tom says while he eventually met that condition, he’d decided he wanted out, and asked to withdraw his gains.

That’s when both women stopped all contact, ignoring messages and blocking his phone. By then, Tom had sent them around NZ$130,000.

That was “All the money I’d got through twelve years working,” he says. “All my savings and even credit card debt too. An attempt to create an alternative income has instead left me with a huge debt, and in a much worse place than before. I feel terrible for having fallen for what looks to me now like an obvious scam …. I realise that it is also my fault for not researching nearly enough before engaging with the scammers.”
But he adds, “I’m sure I’m not the only victim they’ve scammed,” based on similar stories online.

Others being scammed too

Data from the New Zealand regulator shows Tom is not the only one.

A review of complaints received shows dating apps increasingly being used in investment scams. Tinder was the app of choice in two thirds of reported complaints, and it is reasonable to assume that there has been more catfishing activity than has been officially reported.

It’s a trend that shows dating apps are the latest tool in the investment scammer’s bag of tricks.

Romance scams have been around for a while, but it’s rare for them to be tied to financial investments.

Now, with apps like Tinder linking singles around the globe, the scammers’ next victims might be just a swipe away.

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Keep safe out there

Whether you’re on dating apps or not, bear in mind:

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