Know the warning signs of an asset recovery scam: Internet Scambusters #1,060
Every scam victim wants to get their money back, so it's tempting to take up a recovery offer that arrives in a message or social media post.
But the chances are high that this is just another con trick because most so-called recovery agents are actually scammers, just there for a second bite of the cherry.
In this week's issue, we'll provide the warning signs of a recovery scam, along with three key rules you should follow to protect yourself.
Let's get started…
Scam Victim? Don't Fall For This Asset Recovery Lie
What could be worse than being scammed? Being conned again by the same people or for the same trick when you call in a recovery scammer.
It works like this: You get scammed out of money or property. Then someone, maybe even the original scammer in disguise, says they can get recoup your losses for a fee. So, you pay up and never hear from them again. Or you pay, and the crooks then say they need more money to cover expenses or taxes. And so on, until you realize what's going on.
This trick, often called an asset recovery scam, happens more often than you might think, and some experts believe there are more fraudsters in the supposed recovery business than there are genuine operators.
They may or may not be the people who originally conned you, or they work in cahoots with the original fraudsters or just operate alone. Sometimes, these villains work from lists of scam victims, which come complete with contact details. And other times, the victims themselves unknowingly tip off the scammers by posting about their losses.
The crooks' main targets are people who've already been tricked in property timeshare scams and others who've fallen for the many cybercurrency scams currently making the rounds.
The roots of the troubles lie in the fact that the victim has already demonstrated they can be fooled. Furthermore, the bigger the losses - sometimes entire life savings - the more likely the victim is to clutch at straws to get their money or property back.
Warning Signs of a Recovery Scam
When you discover you've been scammed big time, perhaps the first thing you do is try to find someone who can help you recover your losses.
But Jay Adkinsson, a legal expert in this field writing for Forbes magazine, says :
"The odds of … finding a bona fide asset recovery specialist amongst all the recovery scammers is probably on the order of something like 500:1."
Even if you don't do a search yourself, the crooks may soon come crawling out of the woodwork. They'll phone, email, text or even try to connect through social media posts, offering their services.
That's the first warning sign. Genuine recovery specialists don't hawk their business like this. So, if you're contacted this way, it's almost certainly a scam.
Other red flags to watch for include:
- A requirement that you pay upfront. Genuine recovery people usually work for a percentage of what they get back or a fixed fee - payable after they've succeeded.
- A "guarantee" that they'll recover your losses, sometimes saying they'll get the full 100 percent. No one can honestly make such a promise.
- Likewise, they may offer a money-back guarantee - you'll get your fee back if they don't succeed. Remember, you shouldn't have paid them upfront in the first place.
- They claim to be working with government departments, consumer organizations, or law enforcement. They're not.
- They try to pressure you into acting quickly, claiming that the sooner they get going the better your chances of a recovery. That may be partly true, but it's not a reason for acting without thinking this through.
- They may ask you not to report the original crime and to keep their service "confidential," supposedly to avoid alerting the original scammers. Not true. They just want to increase their odds of pulling off the scam.
- They request your bank details, supposedly so they can pay recovered funds straight into your account. But they really want this information to get their hands on more of your cash.
How to Safeguard Yourself
By taking heed of these warning signs, you should be well-protected against recovery scam artists. It boils down to these 3 rules:
- Notify your bank or any other organization connected with your finances. And always report the original crime to law enforcement, the Federal Trade Commission, and the Internet Crime Complaint Center and follow their advice. But don't tell the world via social media. That's the first place crooks look at for leads.
- Never pay upfront. And you should never send payments by untraceable methods, such as wiring cash or using Bitcoin. Instead, if you believe you're working with a genuine recovery specialist, arrange for money or property to be transferred to a third-party escrow agent, who will deduct the agent's and their own fees and then return the balance to you. But only use an escrow company you have selected yourself, not one they suggest because that could be another scam!
- Don't rush. Take the time to research any recovery specialist you're thinking of working with. Read the small print in any contract or other documentation they provide. Ask for references from past customers and check them out yourself. And check if they're registered with the Association of Certified Fraud Examiners.
Your best chances of getting your money or property back is probably from organizations like the FTC and the Consumer Financial Protection Board (CFPB), who sometimes recover widespread scam losses and return them to victims.
As an alternative, your best route is to consult an attorney or even a private investigator. But, again, do your research and make sure you know their fees ahead of time. If it's too expensive, you may just have to eat your losses (beyond reporting them as above).
The one thing you don't want to do is to throw good money after bad into a recovery scam. Learn from your mistake; don't repeat it.
This Week's Scam Alerts
Medicare cards: Scammers use all manner of tricks to get ahold of people's Medicare number. The latest trick is to tell potential victims that their cards have to be replaced following the Covid pandemic. Not true. Ignore requests to provide your current number.
PayPal trick: Following on from news that 35,000 PayPal accounts have been compromised by hackers - which we reported a couple of weeks ago - scammers have been contacting people at random claiming to be from PayPal and notifying them that their accounts have also been affected. Their message includes a link to a fake sign-on page where account details are then stolen.
That's it for today -- we hope you enjoy your week!