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Recovery Scam: Getting Fooled Twice

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What is a recovery scam?

We’ll be explaining what a recovery scam is and how you can avoid becoming the victim of one.

Victims of scams can go through extremely challenging periods and losing money unexpectedly can affect more than just the victim but the victims family as well. What about when the money wasn’t savings? Then it’s the very bills that the victim was meant to pay that will somehow have to wait, no matter what kind of strain this puts on the victim or the businesses providing services.

Sometimes the victim still has some money left over after being scammed, or sometimes some credit left on his or her credit card. Enter the recovery scammer. Here to take whatever is left.

In this article we’ll cover just exactly how these nefarious individuals work, how they get your information and how to spot them when necessary.

Profile of the recovery scammer

Recovery scammers are no different than any other scammer. Perpetuated by morally challenged individuals who believe the only way to make a living is through socially engineering people and manipulating the elderly. However in the recovery scam game, the scammer is often a particularly seasoned professional. The most common recovery scams involve binary options companies that became banned. Having scammed a individual in a binary options scheme and knowing the victims personal information, the scammer or a colleague of the scammer will retarget the scam victim offering their “recovery services”. The victim has already been pre-qualified to give over their money if they’re told the right things over the phone. In this way the scammer draws the victim into giving over more money in hopes of recovering their losses.

Often the recovery scammer is the exact same scammer that perpetrating the first scam and has now come back to his or her victim for more. The victim is convinced that their losses were due to a certain situation, but all is not lost.

What is a recovery scam?

A recovery scam is a fraud perpetrated through targeting individuals who have lost money to a scam and are looking for a way to get the money back. The scammer convinces the victim that he is able to recover the victims money and the victim must pay an upfront fee for the recovery services. It is a form of Advance Fee Fraud.

How did the victim of a recovery scam lose their money?

For the recovery scammer, it doesn’t matter. The scam victim may have lost his or her funds to a Forex scam or a cryptocurrency scam or any other type of fraudulent scheme. The recovery scammer will find a way to create a story of how their recovery plan works that is custom fit to the victims situation.

How do I know if a recovery company is a scam?

It is exceptionally difficult to identify whether a wealth recovery company is legitimate or not. This is mainly because in most countries even a legitimate wealth recovery company is not required to have a regulatory permit. We’ll be pointing out a few ways to know if a recovery company is scamming you, but ultimately it will be based on reputation. You can contact us here and we can let you know if the company in question is a scam.

Why doesn’t a recovery company need to be regulated?

The simple answer is because recovery companies structure their services in a way that they are merely consulting firms giving out advice. They don’t actually offer any financial services.

Update: July 14, 2021

The Financial Conduct Authority (FCA UK) has reportedly begun cracking down on recovery companies. Interestingly enough some of the companies that were targeted were not scams. The good news is that there was previously no real way of determining a recovery scam from an authorized firm. This is now changing, at least in the UK.

How do wealth recovery companies work?

A legitimate recovery company works by using legal methods of recovering funds. For example if an individual was scammed by a Forex broker who is regulated by a government body, a recovery company will help the individual who was scammed go through the necessary procedures to file a claim through the correct regulatory body. By understanding the system, a recovery professional can help ensure that a complaint is filed correctly and the correct level of accountability is placed on the right individuals or organizations.

When can a recovery company help? And when can it not?

A recovery company can help in two general categories of instances

  1. The first is when the method of payment that was used has some sort of built in protection. A good example of this is a Visa credit card. Payments made using a Visa credit card have an available instrument that can be used, called a chargeback.
  2. The second situation where a recovery company can assist is where the company or individual who took the money is subject to regulatory laws and is being monitored by a regulatory body or a government agency.
  3. (There are black hat methods of recovering money from a scam, but these would not be the publicly claimed operating procedures of a legitimate recovery company and will not help to identify if a recovery company was legitimate even if claimed possible).

If an individual lost his or her money by sending cryptocurrency to a unlicensed or offshore broker. They are guaranteed never to get their money back. Contrary to what a recovery scammer may tell you, cryptocurrency is not recoverable.

Is a Crypto trace a scam?

If a company is offering a paid service that involves a “Crypto trace” it is a scam. A crypto trace can provide you with the anonymous bitcoin wallet that the funds were sent to. Something built in to block-chain technology is the anonymous deregulated nature of it. This makes any hopes of recovering cryptocurrency a scam.

What does a recovery company do?

As we’ve explained above, they act as a sort of lawyer in helping to take the necessary steps in recovering lost funds.

If you’re a victim of a scam and you’d like to find out if you can get your money back, contact us today and we’ll do our very best to guide you.

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