A recovery scam is a type of scam that occurs after an individual has already been scammed. A perpetrator will return posing as a consumer advocate or law enforcement and demand up front fees to help the scam victim recover their lost money.
Recovery scams are consumer fraud that target individuals who have already lost money to previous scams. A scammer may contact these victims posing as police officers, lawyers, or recovery experts. They will make a promise to help the victim recover their money but will, instead, require up front fees and steal that money as well.
How Recovery Scams Work
Recovery scams work when scammers share or purchase lists of information of individuals who have already fallen for a scam, referred to as a sucker list, indicating that they are vulnerable. These lists contain victims’ names, addresses, phone numbers, and what types of scams they fell for previously.
Scammers expect that individuals who fell for these types of tricks once will do so again. The scammer then contacts people on the list claiming to be a regulator, tech investigator, government worker, or other professional noted above, stating that they can trace and return their funds in order to gain a victim’s trust.
A scammer may contact a victim through text, phone calls, email, social media, or even regular mail. They may even inform someone who did not realize they were scammed previously about their loss.
The scammer then demands an up front payment, referring to it as a legal cost, processing fee, retainer fee, or other fee. They may also request financial information, such as account numbers or Social Security numbers.
Once this amount is paid or the information is provided, the scammer will disappear and return nothing to the victim. If the victim provided the scammer with personal financial information, the scammer may steal additional money from them or steal their identity.
What Are Some Typical Forms of Recovery Scams?
There are several examples of common forms of recovery scams, including:
- Fake Asset Recovery Companies: A scammer will create a professional looking website that has fake reviews that offers specialized tracking services for lost investments.
- Phony Lawyers and Phone Law Firms: Scammers will pretend to be legal experts or lawyers who can trace funds or file lawsuits to reclaim a victim’s money.
- Government Official Imposters: A scammer may state that they work for an agency, such as the U.S. Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), or a law enforcement agency, claiming that they recovered a victim’s funds and require an administrative payment to release them.
- The Same Scammer Callback: This occurs when the original scammer contacts the victim a second time posing as a different person or entity and promises them a partial refund of their losses if a new processing fee is paid.
How Do Recovery Scammers Contact and Manipulate Victims?
As noted above, recovery scammers may contact and manipulate victims in many different ways. They will often get their information from a purchased list and may use phone calls, text messages, emails, social media, and nearly any form of communication to reach a victim.
Scammers will typically manipulate their victims by posing as a person or entity they believe they can trust, such as a law enforcement officer, government agent, or attorney. The scammer may provide fake proof of the tracked funds and offer the victim a full refund of their stolen money.
What Are the Legal Consequences for Recovery Scams?
An individual who perpetrates a recovery scam can face severe criminal penalties as well as civil penalties. This may include incarceration, substantial financial fines, and asset restitution.
A recovery scam perpetrator may be convicted for federal wire fraud, money order fraud, mail fraud, money laundering, or identity theft, which often results in sentences of up to 20 years for each count, depending on the facts and the statutes involved.
They may also face hundreds of thousands of dollars in criminal fines and mandatory forfeiture of all of the illegally obtained proceeds. If the perpetrator impersonated a federal official or targeted an elderly victim, they may be sentenced to additional years in prison under federal and state enhancement laws.
In addition to criminal consequences for criminal fraud, a perpetrator can also face civil consequences for a recovery scam. A victim of a scam can file a civil lawsuit for conversion, fraud, and unjust enrichment in order to seize the scammer’s assets. The FTC as well as the Consumer Financial Protection Bureau may also impose civil penalties and bans on the scammer from the financial services industry.
How Can I Avoid Being a Victim of a Recovery Scam?
There are numerous ways an individual can avoid being a victim of a recovery scam. One of the most important steps is being aware that these types of scams exist and the warning signs to watch for.
If an individual is contacted and someone asks them for an up front fee, that is most likely a scam. This applies no matter how they were contacted; it is important to never make an up front payment.
The second major warning sign is if someone says they are from a nonprofit group, government agency, or other organization or group that needs payment or the individual’s personal information. Legitimate law enforcement agencies and organizations will not request money or financial or personal information to help an individual get a refund.
There are also some other additional things to watch out for to avoid becoming a victim of a recovery scam, including:
- Do not trust emails, text messages, social media messages, or other contacts from individuals saying they can help recover funds lost in a scam for a fee
- Scammers will typically insist on payment through wire transfers, gift cards, cryptocurrency, cash, payment apps, or companies such as Western Union or MoneyGram
- If a check is provided for more than a victim lost, they should not cash or deposit it
- In this situation, the scammer will state they made an error, the victim should keep the amount due and return the balance to the scammer
- Weeks later, once the bank discovers the check was actually fake, the bank will want the victim to repay the money
- If an individual is contacted by an organization or government agency, they should research them
- This may include ending the call received, looking up the agency or organization’s official number, and calling them back to ensure they actually called
- It can be helpful to create a safe word to use with family and close friends in emergency situations so that, if anyone does need urgent funds or there is an emergency, you can quickly verify that they are who they claim to be
How to Report a Recovery Scam and Protect Yourself from Attacks
If an individual does become a victim of a recovery, they are wondering how to report a scam, or they have information about an attempted recovery scam, they can report it to their state attorney general or the FTC at ReportFraud.ftc.gov. It is important to report this information because it helps law enforcement stop these scams. It also allows them to alert other members of the community so they can avoid becoming victims.
It is also important to notify the bank or other financial institution involved if personal information was provided to the scammer. The incident can be reported to local law enforcement as well.
How Can an Attorney Help Me if I’ve Been Scammed?
An attorney can help in different ways if someone has been scammed, including interacting with law enforcement, gathering evidence, and evaluating legal claims against third parties, such as payment processors or banks. A lawyer can help trace the funds that were lost, determine if there was any third-party negligence that led to the loss of funds, and help their client report the issue to the proper authorities.
Having a lawyer will also help ensure that an individual does not fall victim to further scams and make sure their rights are protected during the resolution of their case. It is important to be aware, however, that many recovery scammers operate in other countries under fake names, so it can be difficult to file lawsuits against the scammer directly.
You may have questions such as, “what is a phishing scam?” Or, you may have issues with other types of scams, such as grant money scams or automatic debit orders scams. An attorney can provide answers for questions you may have and can provide assistance and guidance regarding various types of scams being created.
Should I Hire a Lawyer for Help with a Recovery Scam Issue?
If you have any type of recovery scam issue or concern, it is very important to consult with a local criminal fraud lawyer to ensure that you are not victimized any further, that you do not lose any more money, and that you properly report the issue to law enforcement and financial institutions. You can use the no-cost attorney-client matching services LegalMatch helps you quickly find a criminal lawyer in your area who is ready to help you deal with the overwhelming issues related to recovery scams.
