Recovery Scams: Fraud Victims Hit Again by Scammers Promising to Recover Stolen Cash

How fraud recovery scammers find victims

How does a scammer know you’re a fraud victim? Sometimes, the criminals who scammed you the first time may re-target you, claiming they can help you recover your losses. Frequently, however, your status as a fraud victim lands you on a list. Just as a real estate agent might create a list of potential homebuyers, scammers often do the same, building databases and buying, selling and trading information about victims. That info can include your name, address and phone number; the type of scam that victimized you; and the amount of money you paid, the FTC reports.

If you’re a scam victim, “you are on a call list now,” says Jacob Chichester, a detective who investigates fraud for the Lake County Sheriff’s Office in Tavares, Florida. “And they are passing your name around.”

Robert Mascio, director of FINRA’s Investor Education Outreach, agrees that “Information is shared within criminal networks." He adds, “There’s a network of individuals that might know you’ve already been victimized, and they can come back to that individual to try and extract more money.”

Because criminals have data about your case, their recovery appeals can sound legit. They also know that victims are probably still reeling from the first fraud, which makes them susceptible to a follow-up. Strong emotions — embarrassment, grief, anger, shame, depression — are normal responses after you’ve been robbed, Mascio says. But your raw emotional state can affect your judgment, which scammers can exploit.

“Sometimes, people just don’t want to let go of the idea that they’re going to get that money back,” Kappler says. A recovery scam “takes advantage of human nature and our tendency to follow through on something we’re invested in, and to keep investing more time and emotional energy.”

How to protect yourself from fraud recovery scams

Ignore unsolicited offers. This is true of many scams. “If something is coming to you out of the blue — in this case, the chance for recovery — and you didn’t actively seek it, that’s definitely a red flag,” Mascio says. Start by not answering calls from unknown numbers.

Be alert to pressure tactics. Scammers often say you need to act fast to recover your funds. “Victims might think, 'Well, if I don’t act quickly, I’ll lose even more money,'” Mascio says. “Whenever you’re given a short amount of time to do something, we get emotional, we get nervous, we start thinking, ‘OK, we have to do this quickly.' And when that happens, rational thinking can go out the window.” 

Watch for phony checks. Sometimes, scammers will send a counterfeit check, often for more than the amount you lost, and instruct you to deposit it, the FTC notes. Then they’ll say they overpaid and instruct you to return the balance. “If somebody is giving you money and telling you to send them money back — or if somebody is asking you to pay to get money back — it’s a scam, plain and simple,” Kappler says. And once your bank discovers that you deposited a counterfeit check, “the bank may come knocking at your door asking for the money they lost,” she says.

Beware of up-front fees. Scammers may charge a fee to recover your money and ask you to pay it via a wire transfer, gift card or a service such as Venmo. “If anybody’s asking for money up-front,” Mascio says, “that’s a clear indicator that it’s a scam.”

Research supposed credentials. To uncover a scam, start by using a search engine. If a supposed law firm contacts you, for example, enter the firm’s name with keywords such as “scam,” “fraud” or “complaint.” FINRA offers an online service called BrokerCheck to help you research financial institutions and professionals. You can also contact your state attorney general and inquire about complaints involving a particular company.

Understand how the feds work. Federal officials will never contact you through a personal or web-based email account. “If the government needs to reach you, they will send official documentation in the mail,” states the Commodity Futures Trading Commission (CFTC,) a federal regulatory agency that has shared information on recovery fraud scams. Adds Kappler: “Neither the government nor any legitimate organization is going to call and say they want to give you money, but you have to pay them money. And they won’t ask for personal information.”

Report the fraud. If you’ve lost money in a recovery scam, or you have information about the scammer, report it to the FBI’s Internet Crime Complaint Center (IC3.gov). Not every complaint leads to enforcement action, but the information can help officials to spot trends and sometimes identify scammers. (Find out more about where, how and why to report scams here.)

Find support. Call the AARP Fraud Watch Network's toll-free Helpline (877-908-3360), where trained volunteers provide victims and family members with support and guidance on next steps.