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Fraud victims are increasingly falling prey to recovery scams , where criminals promise to help them reclaim their lost funds for an upfront fee. These scams exploit the vulnerability of individuals who have already been scammed, often making them easy targets due to their desperation to recover their losses.
How Recovery Scams Work
1. Initial Contact : Scammers typically reach out to victims of previous frauds, claiming they can assist in recovering lost money. They might pose as legitimate entities such as law firms, government agencies, or consumer advocacy organizations .
2. Fees and Charges : To initiate the recovery process, they often request payment in the form of a retainer fee, processing fee, or administrative charge. This can lead to further financial loss for victims who are already struggling .
3. Personal Information Requests : Scammers may ask for sensitive information like Social Security numbers or bank details under the pretense of needing it to process refunds or verify identities .
Recent Trends and Statistics
- The National Anti-Scam Centre in Australia reported a significant rise in recovery scam reports, with a 129% increase from the previous six months, totaling over $2.9 million in losses between December 2023 and May 2024 .
- In the U.S., the FBI noted that victims of cryptocurrency scams alone reported losses exceeding $9.9 million due to fake law firms promising recovery services from February 2023 to February 2024 .
Impact on Victims
The emotional and financial toll on victims can be devastating. Many are re-victimized multiple times, compounding their losses and emotional distress. Authorities warn that engaging with these scams often leads to further exploitation, as scammers are adept at identifying and targeting individuals who have already suffered financial loss .
Recommendations for Victims
Authorities recommend that victims refrain from engaging with anyone promising recovery of stolen funds. Instead, they should report the scam to local authorities and their financial institutions. Legitimate recovery services are rare, and most scams result in further losses rather than actual recovery of funds .