Sadly, falling victim to a scam can put you at greater risk for another. One of the fastest-growing schemes is the recovery scam, with some reports showing a 129% rise in cases. Below, we explain what recovery scams are, how they work, and how you can protect yourself from them.
What are recovery scams?
Also known as ‘follow-up fraud’, recovery scams are where fraudsters pretend to help reclaim the money you’ve lost from a previous scam. They’re often carried out by the same people who scammed you originally.
How do recovery scams work?
Here’s how recovery scams usually work:
- Scammers often crawl social media sites or forums to find victims who’ve been scammed. They may also be sold a ‘sucker list’. This is a list of people who’ve lost money or had their accounts hacked. In some cases, scammers pretend to be from an asset recovery company.
- Scammers often contact victims via email, text, call, or direct messages. They may also post comments on social media sites about how they can recover your lost funds.
- To help you ‘recover’ the money, scammers will usually ask for an upfront fee. They may also request sensitive information, such as passwords or banking details.
- Once you’ve handed them the fee or sensitive information, the scammers usually vanish – taking your money or personal details with them.
The different types of recovery scams
Recovery scams can happen in several ways. Some of the most common are:
Cryptocurrency recovery scams
Social media platforms are a hotbed for crypto recovery scams.
Here’s how they usually work:
- The scammer makes contact, often on social media sites like Reddit or X. They may message you directly, promote their ‘services’ using hacked accounts, or create fake crypto recovery websites.
- They claim they can recover your lost funds but will need your personal or wallet details to do so. They will also likely ask for an upfront fee for their ‘services’.
- Then they take your funds and disappear.
Overpayment refund scams
This type of scam targets people selling items online or through online businesses.
Here’s how they usually work:- A scammer gets in touch. They want to buy an item you’re selling.
- When they pay, they pay too much – usually through a cheque, money order or an online payment processor.
- You’re asked to refund the extra amount to a different account through a wire transfer, crypto, or some other way that can’t be reversed or disputed.
- Later, you realise the original payment was fake or never cleared. This means you’ve lost the refund you sent and never received any legitimate payment in the first place.
Social media ‘recovery specialists’
Scammers search for recent victims on social media sites. Once you post about a recent scam, they’ll flood your inbox with offers to help recover your money.
Here’s how they usually work:
- You post on a social media site (such as Reddit or X) about a scam
- Scammers get in touch, claiming they can help you.
- They’ll ask for an upfront fee. They may also request your personal information so they can get your money back.
- Two things are likely to happen then: one is you may be overcharged for a recovery service you could’ve done yourself. Or they disappear with your money and sensitive information.
Investment fraud recovery scams
Victims of investment fraud can lose huge amounts of money. So, it’s no wonder so many try to recover their losses.
Here’s how these recovery scams usually work:
- Scammers get in touch with you out of the blue.
- They claim to be from a trusted organisation, like a law firm or government agency claim. They claim they can get your money back.
- They’ll ask for an upfront fee and your personal information for their ‘file report’.
- In most cases, they’ll then take your fee and you end up losing even more.
Tech support recovery scams
These types of scams usually involve some kind of refund fraud. They’re one of the more sophisticated recovery schemes out there.
Here’s how they usually work:
- You get an invoice for a product or service that you never ordered. On the invoice is a contact number for ‘technical support’ - should you have any issues.
- Naturally, many people call. When they do, scammers ask them to download software that will help the refund go through. However, this software gives them access to your computer.
- Then they log on to your bank account to prove your refund has been processed.
- Cunningly, scammers will use the software you’ve now installed to show you a completely different number in your account than what’s there
- Then, they’ll ask you to refund the difference.
- This is the where you probably realise it was a scam. But by then it’s too late – the scammer has disappeared with your money.
How to spot a fake or clone recovery firm
We recommend checking if the recovery firm is FCA registered. That’s because all legitimate firms must be authorised or registered by the FCA.
Here’s how to check:
- Use the FCA Firm Checker to look up the company’s name.
- Make sure they’re authorised and have permission to offer the specific product or service you selected.
- Cross-check their contact details against what’s listed on the FCA site. If anything doesn’t match or if the firm isn’t listed at all, report it to the FCA on 0800 111 6768.
But that’s not the only way of spotting a clone recovery firm. There are also a host of other tell-tale signs to watch out for, including:
- Using web-based email addresses, such as Gmail or Hotmail. Official agencies will never do this.
- Being cold-called.
- Scammers will often claim they work for official organisations, such as the FCA or a law firm.
- Using high-pressure tactics to encourage you to act quickly.
- Being vague about how they will recover your money. There probably won’t be a clear plan.
- Asking for upfront fees for their ‘recovery services’. Most legitimate firms won’t do this.
Here at WRS, we operate on a no-win, no-fee model. You only pay if your claim is successful and there are no upfront fees.
Think you’re the victim of a recovery scam? We may be able to help
If you think you’ve fallen victim to a recovery scam, we know what you’re going through and you’re not alone. This type of scam is on the rise and whatever has happened isn’t your fault.
The good news is we may be able to recover the money you’ve lost, including any funds lost in a follow-up scam.
As an SRA-regulated firm, our trusted UK-based solicitors can help track down your assets and build a case for recovery. It’s why we’ve recovered over £50m in just three years. We also provide a no-win, no-fee service. You only pay if your claim is successful.