By Randy Hutchinson
President of the BBB
Reprinted from The Commercial Appeal
People who have been victimized in a scam should remember the old proverb “Fool me once, shame on you; fool me twice, shame on me” if someone offers to help recover their money. Studies have shown that scam victims are prone to being tricked again. The FTC issued an alert in November warning that the failure of a major cryptocurrency exchange that wiped out many crypto investors could present an opportunity for scammers to cash in.
In a recovery (or refund or reloading) scam, crooks offer to help people recover the money they’ve lost in an investment, sweepstakes, timeshare resale, or other kind of scam. The crooks may claim to be with the government, a law firm, or a consumer watchdog nonprofit agency. The victim is asked to pay a fee upfront (sometimes characterized as a donation or taxes) but gets nothing in return.
The crooks identify their targets in several ways:
- They troll social media for people complaining about losing money in a scam.
- They buy “sucker lists” of scam victims that are sold on the dark web. They may even be the crooks behind the original scam returning for a second bite at the apple.
- They create websites posing as fraud recovery experts with fake customer testimonials, A-plus ratings, and five-star reviews. Then they issue phony press releases about their success in recovering money on free or low-cost online press release distribution services that direct victims to the phony website.
The FTC shut down an outfit called Consumer Collection Advocates that took in almost $1.3 million with false promises it could help people recover money lost in timeshare resale and precious metal investment frauds. Some victims paid an upfront fee of as much as $10,000.
In an alert on recovery scams, the Minnesota Attorney General cited the example of a woman who lost money in a work-at-home scam and was contacted by a man claiming to be with a consumer advocacy organization that worked with victims of work-at-home scams to get their money back. A man who lost thousands of dollars in a securities investment scam received a call from someone claiming to be associated with the “Regulatory Trade Commission” who said the money had already been recovered from the crooks. In both cases, the intended victims needed to pay an upfront fee to get their money, but both became suspicious, researched the organizations, and determined they were scammers.
Watch for one or more of these warning signs of a recovery scam:
- You’ve already been a victim of a scam.
- You’re asked to pay an upfront fee before receiving any service.
- There’s no physical address on the company’s website outside the U.S., or it can’t be found in map searches. Or there’s no phone number; you can only communicate through a messaging platform.
- A purported government agency uses a web-based email address like Gmail or Yahoo rather than .gov.
- There are spelling and grammar errors, and logos, letterhead, and graphics look unprofessional or cut-and-pasted.
Research any organization or government agency that contacts you offering to help you recover money. Search for their name online with the words “complaints,” “reviews,” and “scams.” Check companies out with the BBB at bbb.org.