How to Spot and Avoid Recovery Scams

Have you recently lost money to a scam? If so, you are likely feeling frustrated, embarrassed, and desperate to get your funds back. Unfortunately, criminals know exactly how you feel—and they are waiting to exploit it. This is the world of recovery scams, also known as “money-back” scams. While the initial fraud was painful, these secondary scams are often even more devastating. They target previous victims, promising to return lost funds in exchange for an upfront fee. In reality, they are just another way for criminals to steal your money. Here is everything you need to know to identify these scams, report them correctly, and protect your financial future.

What is a Recovery Scam?

A recovery scam occurs when a fraudster contacts a previous victim of a crime and poses as a law enforcement officer, government agent, or specialized lawyer.

Their pitch is seductive: “We’ve located your lost money. We just need a small fee to release it back to you.”

They may claim to be from the FBI, a fake consumer protection agency, or a “cyber-recovery” firm. They often have personal details about your previous loss, which they may have bought on the dark web or found in public reports. Once you pay the “upfront fee,” they disappear—or they demand more money for taxes, legal costs, or administrative fees.

The Golden Rule: Legitimate law enforcement and government agencies will never ask you to pay a fee to recover stolen money.

How to Spot a Recovery Scam

Criminals are becoming increasingly sophisticated. However, there are tell-tale signs that a “money-back” offer is a scam:

1. Upfront Fees: Any request for money before services are rendered is a major red flag. Legitimate agencies do not charge victims to investigate crimes.
2. Unsolicited Contact: If someone calls, emails, or texts you out of the blue claiming they can recover your money, be skeptical.
3. Pressure Tactics: Scammers create a false sense of urgency. They may tell you that you have only 24 hours to claim your funds or that the opportunity will expire.
4. Requests for Sensitive Information: They may ask for your bank account details, Social Security number, or remote access to your computer under the guise of “verifying your identity.”
5. Guaranteed Results: No legitimate agency can guarantee the recovery of stolen funds, especially cryptocurrency or wire transfers, which are notoriously difficult to trace.

How to Report Recovery Scams (For Free)

If you have been targeted by a recovery scam, or if you want to report the original fraud, it is vital to file a report with the proper authorities. Reporting is always free. You should never pay to file a police report or a fraud complaint.

Reporting these crimes helps authorities track criminal networks and may prevent others from becoming victims. Here is how to report scams based on your location:

In the United States

If you are in the US, you have several robust options for reporting fraud:

• The Federal Trade Commission (FTC): The FTC is the primary agency for collecting scam reports. They do not resolve individual cases but use the data to build cases against scammers.
  • Where to report: ReportFraud.ftc.gov
• The FBI’s Internet Crime Complaint Center (IC3): If the scam occurred online (which most recovery scams do), the IC3 is the correct place to file. This allows the FBI to track cybercriminals across state and international lines.
  • Where to report: ic3.gov
• Local Police: File a report with your local police department. While they may not be able to recover your funds, the police report creates an official record of the crime, which is useful for tax purposes and bank disputes.

In the United Kingdom

• Action Fraud: This is the UK’s national reporting center for fraud and cybercrime. Reporting to Action Fraud connects your case to the National Fraud Intelligence Bureau (NFIB), which analyzes data to prevent future attacks.
  • Where to report: actionfraud.police.uk or call 0300 123 2040.

In Canada

• Canadian Anti-Fraud Centre (CAFC): The CAFC is the central agency for collecting information on fraud and identity theft. They provide assistance to victims and work closely with the RCMP and other law enforcement agencies.
  • Where to report: antifraudcentre-centreantifraude.ca or call 1-888-495-8501.
• Local Police: As with the US and UK, always file a report with your local police service. This is essential for insurance claims and legal documentation.

What to Do If You Have Already Paid a Recovery Scammer

If you have already sent money to a recovery scammer, act immediately:

1. Contact Your Bank or Payment Provider: If you paid via credit card, wire transfer, or debit card, contact your financial institution immediately. They may be able to stop the transaction or initiate a chargeback.
2. Cease Communication: Do not respond to further emails or calls. Block the number and delete the emails. Engaging with them only confirms that you are a “live” target.
3. Change Your Passwords: If you gave the scammer remote access to your computer or shared login details, change your passwords immediately and run a malware scan on your device.
4. File Reports: Use the links above to file reports with the FTC, IC3, Action Fraud, or CAFC. This is the most effective way to help authorities track these criminals.

Protecting Yourself Moving Forward

Recovering from a scam is difficult, but you are not alone. By recognizing the signs of a recovery scam, you can stop the cycle of fraud.

Remember:

• No one can guarantee the return of stolen money.
• Government agencies do not charge fees for investigations.
• If it sounds too good to be true, it is.

Stay vigilant, protect your personal information, and use the official channels listed above to report suspicious activity. Together, we can make the internet a safer place for everyone.

Disclaimer: This blog post is for informational purposes only and does not constitute legal or financial advice. If you have been the victim of a crime, please contact your local law enforcement agency immediately.