Don’t be Re-Victimized by Recovery Frauds
“We can get your money back.”
If fraud criminals recently stole a portion of your savings or retirement nest egg, an offer to recover your funds may sound appealing. Unfortunately, for many victims of fraud, the offer may be another scheme that adds insult to injury.
Recovery scams target victims already harmed by other frauds. Fraudsters convince victims they can get their lost money back, but first the victims have to pay upfront fees.
If you’ve been a recent victim of fraud, be prepared to guard against these follow-on schemes.
How Recovery Frauds Work
How to Identify a Real Government Employee from an Imposter
Imposter frauds are becoming increasingly common. Fraudsters know most people tend to trust law enforcement or government officials, and they use that trust to their advantage. If someone contacts you claiming to be from a court or government agency, there are simple ways you can check:
Recovery frauds commonly start with victim lists. After fraudsters steal victims’ money, they also profit from the victims’ information—either by hanging onto it for a few months and coming back to run another scam or by selling it on the dark web. Victim lists can include payment and contact information, personal details, the amount of money taken, and the type of scam that was used.
Commonly, a victim receives a phone call or email from a person claiming to be a government official, an attorney, or recovery service representative. In most cases the fraudsters claim to have the money already in hand, or are working with the court to distribute the funds. In other cases, the victims are told that the fraudsters who took their money have been tracked down and the caller is notifying victims to begin a civil court action.
Sometimes, victims are told that most or all their money will assuredly be returned if they first pay a small donation, retainer, or overdue taxes. However, after making the first payment, requests for more funds often follow. This is known as an advance-fee fraud—when you are asked to pay upfront for the chance of getting a bigger payoff later. But in recovery fraud cases, none of the lost money is ever returned.
Recovery Fraud Warning Signs
Watch for these warning signs. Any of them should be considered a red flag that raises your suspicion. Report any follow-on fraud attempts to authorities.
- Calls, letters, or emails are coming from people you don’t know or companies you’ve never contacted.
- The person or organization knows a lot about the money you lost.
- You’re asked to pay before receiving any service.
- You’re asked to give bank account details so the “recovered” funds can be deposited directly into your account.
- The person or organization is using a web-based email address, such as @Gmail or @Yahoo.
- Organization seals, logos, graphics, or signatures look like they’ve been cut-and-pasted from other documents.
- The letterhead looks unprofessional.
- There are grammar and spelling errors.
- You are given reasons why the fees can’t be taken from the money after it’s recovered, or they call the payment a donation or tax.
Remember, never give payment or account information over the phone or by email. Also, government agencies like the CFTC that prosecute financial fraud will never ask you for money and would only use “.gov” email addresses.
If you’re directed to a website, don’t just click the link in an email. Conduct your own web search for the person or organization and contact them independently.
Victims who are eligible for restitution that is legitimate will likely be notified by mail. If you receive such a letter, verify the information by independently going to the agency’s or court’s website, or calling them yourself. Do not use phone numbers or web addresses provided in the correspondence until you verify its authenticity. If the communication is part of a fraud, the phone numbers and web addresses will be fraudulent, too. It’s good to take precautions, but don’t ignore the letter. It could also be real.
Help Fight Fraud – Report Suspicious Activity
Even if you can’t get your money back from fraudsters, it’s important for all victims to report fraud to help stop others from falling victim to these schemes.
Report frauds to local, state and federal law enforcement and regulatory agencies, including the CFTC. Notifying local, state and federal authorities will also help agencies track frauds, pursue the fraudsters, and warn others. Some agencies, including the CFTC, have whistleblower programs that may entitle you to an award for reporting fraud in some circumstances.
This article was prepared by the Commodity Futures Trading Commission’s Office of Customer Education and Outreach. It is provided for general informational purposes only and does not provide legal or investment advice to any individual or entity. Please consult with your own legal adviser before taking any action based on this information. Reference in this article to any organizations or the use of any organization, trade, firm, or corporation name is for informational purposes only and does not constitute endorsement, recommendation, or favoring by the CFTC.