FROM THE BLOG

When you experience a setback in life, be it personal or financial, you may come across some version of the idea that “It isn’t the adversity that matters, but how you respond to it that determines what you are made of.”

That line of thinking rings true when faced with fraud or financial crime, as putting your finances back in order can be daunting. That process has become even more complex with the rise in so-called “recovery scams” which prey upon people trying to recover money lost in fraud. A recovery scam can take the form of someone promising to recover lost money or claiming to get you a product you were promised, with the scammer’s sights trained on taking advantage of your vulnerable state.

In previous blog posts, I have discussed the rise in financial fraud, including a 30% increase in such crime from 2022 to 2023. With so many people victimized by these incidents (including yours truly), it is no surprise that criminals are targeting people in a vulnerable state of recovery to perpetrate more crimes – in some cases even buying lists of victims from other scammers. These so-called “sucker lists” can have information such as your name, address, phone number, the kind of fraud you were the victim of, and the amount of money you had stolen. Scammers traffic in such lists because they view people who have been victimized as good targets for additional schemes.

How does it work?
It can start with one of the many types of financial fraud – identity theft or perhaps a romance scam. After the initial anger and embarrassment, you may receive an email, phone call, social media message, or text offering to help you recover your lost money.

Using the information they have acquired, the perpetrator will attempt to gain your trust, often saying they are with a government agency, law firm, or consumer advocacy group. Once they have established your trust, the person contacting you will say that you need to provide more personal information or make a payment such as a retainer, processing fee, or administration fee for a service they never intend to provide.

What can you do to protect yourself?
If you’re contacted by someone claiming they can help you recover lost funds, use these tips to avoid suffering additional losses:

• Maintain healthy skepticism. Be skeptical of unsolicited offers to recover funds on your behalf, even when they claim to be from a reputable organization. Write down the name of their organization and Google it, or contact the firm to verify employment. Anyone who charges you upfront for asset recovery, guarantees your money can be returned, or discourages you from filing a complaint with law enforcement about the loss is likely a scammer.
• Be vigilant. Review any communications you receive for red flags like misspellings or grammatical errors. Be wary of communicating through channels like personal email or WhatsApp.
• Never send money or personal information. Fraudsters often push to have funds sent by wire transfer or cryptocurrency. Treat these requests with extreme caution. Fraudsters might also ask for your bank account details to allegedly deposit funds or request other sensitive information they say is needed to complete payment. Don’t provide any personal information until you verify who you’re working with.
• Know where to report fraud. If you suspect fraud report the scam to the Federal Trade Commission or the FBI’s Internet Crime Complaint Center. When you report these scammers, you help law enforcement stop them and alert others in your community to the issue.

Stay safe, stay skeptical,

Robert Coulter
Chief Compliance Officer

Posted by Prospera Financial