Increasing numbers of consumers and investors are falling victim to recovery room scams. The rise of cryptocurrencies like Bitcoin has created a way for criminals to find victims with little fear of being caught. Now, there is a new type of scam criminals use to retarget people who have recently lost money to a scam: recovery room scammers. This blog post will explain recovery scams and how to recognize, avoid, and report them. If you are a victim of an investment scam, don’t fall for recovery room fraud!
What is a Recovery Room Scam
Recovery room fraud occurs when other fraudsters target victims of a previous scam by claiming to be able to retrieve a victim’s money. They are almost always preceded by an investment scam or boiler room fraud. Victims of investment fraud are vulnerable and understandably desperate to get their back, and recovery room scammers take advantage of this. Especially when the would-be investor has lost their life savings to the fraud.
Unfortunately, there are times when recovery scams are not obvious. Detection may be difficult because a veneer of authenticity often obscures their motives. Professional recovery room scammers will always have a website that gives the impression that they are legitimate. However, this isn’t the case at all.
How They Operate and What to Look for
Recovery room scammers use a variety of tactics. Still, recovery room fraud typically begins when recovery room scammers target a recent victim of investment fraud victim by contacting them on social media. Scam victims are most vulnerable as soon as the company they invested in is discovered to be a fraud (See my CashFX Group Review). The scammer will usually try to establish rapport with the victim by posing as someone who is also a victim of the scam. Recovery room operators may also claim to represent an “asset recovery firm” or a private company.
They will always claim to have some insider information that can help the victim retrieve their money. Scammers will also frequently claim that a class-action lawsuit has been filed against the scam. If a class-action lawsuit has been filed, it would be public knowledge and easy to verify by contacting the firm in charge of prosecuting it. They may also claim that you must pay an “advance fee” to be included in the lawsuit.
Shameless recovery scammers will also attempt to pitch another fraudulent investment scheme as a better “investment opportunity.” They may also try to lure consumers into investing their money in other financial products. Legitimate firms such as asset recovery firms will not do this.
How to Identify Recovery Scams
You should be wary of people who contact you claiming to be victims of fraud. Never transfer money or provide payment information to anyone who approaches you unsolicited and claims to be able to assist you in recovering your lost funds. The best approach to identify if a claims management company is legit is to do proper due diligence by following these steps:
Verify the legitimacy of the company
- Search the company’s name on Google:- If you find negative articles about the company from multiple publications, it’s probably a scam.
- Note: If the scam is relatively new, you may not find negative reports about it, but that doesn’t mean it’s legitimate. It just means you have to do more research.
- Find out if the company is registered to operate in your country by searching the company’s name in your country’s business registry.
- Note: If you are in a larger country such as Canada or the United States, the company must be registered in each province and state they operate.
- Legitimate firms that help scam victims recover their money would have a verifiable track record of helping other victims. They would also display it proudly. If they don’t, they are most likely a scam.
- Check the Better Business Bureau: If the company has a BBB rating, then it could be a legitimate company. *Note: Scammers are known to write fake positive reviews of the scam to make them appear more legitimate. If you see many reviews, look for the negative reviews first.
- If you see a disproportionate amount of positive reviews, check what other companies the reviewer has reviewed. If the reviewer only has one review, it is highly likely to be a fake or paid review.
How Recovery Room Scammers Find Victims
When investors lose their money to a scam, the first thing they do is look for other people who experienced the same thing. As a result, recovery fraudsters take advantage of the fact that many victims turn to social media to seek support from other victims of investment fraud. Member lists on social media pages devoted to fraud victims will often be used by scammers to discover more victims. Recovery room operators refer to open members lists as a “sucker list.”
How to Avoid Recovery Room Scams
You’re not alone if you and/or a friend or loved one is a scam victim and has lost money. To remain up to date, join a social media group dedicated to victims of investment fraud. However, doing so will put you at risk of being contacted by a recovery scammer. Therefore, avoid using your personal profile if you join a scam support group. Instead, set up a fictitious social media profile and join the group with that profile instead. To be safer, you can make sure no one can send you a private message on that profile via your privacy settings.
Report Recovery Scammers to Your Local Authorities
Scammers continue to operate because most victims do not report the fraud. There are many reasons for this, but it is often due to shame, or they don’t realize they are victims. If you believe you have been scammed, DO NOT WAIT TO REPORT IT.
Begin by reporting it to your bank and local law enforcement agency. If you lost money due to a scam involving an “investment,” you should also report it to your local financial authorities. Financial authorities are government agencies, also known as securities regulators or securities commissions, depending on your country. Encourage your friends and relatives who have fallen victim to the scam to report it. The most important thing you can do is urge other victims to report the fraud and raise awareness.
Pro Tips:
- Start a Facebook page to urge victims in your city/country to report the scam. The more people report the fraud, the more likely your local authorities will be compelled to intervene.
- Post links to your local authorities’ criminal reporting website on your Facebook page so victims can easily file a report.
- If you are contacted by a recovery room scammer, contact your home country’s securities regulator. You should also contact the country’s financial authority where the broker or recovery room operator claims to do business.
- Contact a law firm for advice on how to file a complaint.
Conclusion
The best defence against recovery room fraud is education and raising awareness. Recovery room scammers and boiler room fraud continue to operate because victims of investment fraud make it too easy. If you suspect you, a friend, or a loved one are victims of investment fraud, don’t wait to report it. Authorities often don’t take action until enough people have reported the crime. Therefore, reporting the scam to your local government agencies, law enforcement, and financial authorities is crucial. The best way to avoid becoming a victim is to educate yourself and stay current on the latest scams. Financial crime can be challenging to prosecute, but it is NOT impossible. Report any scams you encounter and make your local authorities aware of them as soon as possible.
If you found this helpful article, please consider sharing it or commenting below!
