Recovering From Fraud
The U.S. Commodity Futures Trading Commission (CFTC) is the federal government agency that regulates the commodity futures, commodity options, and swaps trading markets. Part of the CFTC’s mission is to address fraud, manipulation, and abusive practices that target customers and other market participants. Unfortunately, sometimes honest people lose money to fraud. Following is information on steps those who have experienced financial fraud may take to begin recovering from their losses.
Monitor Financial Information
- Contact the receiver or monitor assigned to any CFTC enforcement action or any government case related to the fraudulent scheme and submit a claim with all accurate supporting documentation to the assigned receiver or monitor.
- Review any asset or income disclosures you have reported that included the misinformation for things such as loans, public assistance, immigration, and taxes.
- Provide a statement on your credit report if you need to explain debt you have accumulated based upon finances before the fraud was uncovered.
- Learn more about tax treatments that may be applicable to erroneously reported income and losses due to investment or trading fraud, including so-called “Ponzi schemes.
Avoid Follow-Up Scams
Be aware that you are now a target for other frauds because fraudsters often share details about people they have successfully targeted or approached.
People who have already fallen victim to fraudsters are also particularly vulnerable to “recovery fraud”. This is when fraudsters contact people who already lost money and claim to be law enforcement officers or lawyers, advising victims that they can help recover their lost money by:
- Offering to swap your investment for another one to recover your losses
- Telling you to ”hang in there” as your investment will increase in value soon if you take them up on their offer
- Offering to buy your shares at a premium, but asking you to pay a fee to have “restrictions” on the shares lifted
- Claiming they can recover your losses for a fee through items they call a “tax or insurance bond”
It’s possible the fraudster was careless with your personal information. Placing an initial fraud alert on credit reports will reduce the risk that an identity thief will open accounts in your name. Identity theft victims can place an initial 90-day fraud alert by contacting one of the following three CRAs. That CRA must, in turn, contact the other two CRAs on the victim’s behalf:
P.O. Box 9532
Allen, TX 75013
Fraud Victim Assistance Division
P.O. Box 6790
Fullerton, CA 92834-6790
P.O. Box 740241
Atlanta, GA 30374-0241
Recognize the Emotional Toll
As the victim of financial fraud, you may suffer emotional harm and even medical problems.
You are not alone as millions of people in the United States become victims each year.
You may experience feelings about:
- Yourself: Many victims believe they should have known or recognized what was going on, or blame themselves for being too trusting or naïve. Some may feel guilty and suffer a sense of isolation if they told others about the investment and they participated too.
- The fraudster for taking financial advantage of you, betraying your trust, and jeopardizing your financial independence and security.
- Your family, friends and colleagues for blaming you, being upset over what they perceive as your lack of judgment, or withdrawing financial or emotional support.
- The judicial system, especially in cases that progress slowly or do not result in financial outcomes that are favorable to you.
- The news media for failing to warn the public about fraud schemes or for exploiting victims when fraud crimes are reported.
- Consumer protection agencies for failing to protect your interests.
- Creditors who don't understand your dire financial circumstances.
- Local, state and federal agencies if they do not have the authority to help you.
For assistance with emotional health, please contact Substance Abuse and Mental Health Services Administration (SAMHSA).
Some content excerpted from Taking Action: An Advocate’s Guide to Assisting Victims of Financial Fraud developed jointly by the FINRA Investor Education Foundation and the National Center for Victims of Crime.