Losing money to a financial scam is bad enough, but some victims are being tricked again by fraudulent offers to help them recover lost funds.
Financial recovery scams are on the rise in Australia, and anybody who has had money stolen by scammers is being urged to be wary of businesses or individuals offering to recover their money.
Between December 2023 and May 2024, Scamwatch received 158 reports of scams involving money recovery, with total losses of over $2.9 million, including losses from the original scam.
The number of reports increased by 129 per cent from the previous six months, according to the site run by the Australian Competition and Consumer Commission (ACCC).
Catriona Lowe, deputy chair of the ACCC, said scammers were willing to exploit desperate victims.
“Money recovery scams are damaging and cruel. Criminals prey on people who have already been victims of a scam who hope to get their money back,” she said.
“They are another example of scammers’ willingness to exploit people’s desperation at a vulnerable moment.”
What is a financial recovery scam?
A financial recovery scam is when criminals identify people who have lost money due to a scam and claim they can get the lost money back for either an upfront fee, a percentage of the lost funds, or a tax payment.
Some even tell victims that they can track down lost cryptocurrency.
They will then disappear with the payment and, if they have the victim’s personal details, take more money or commit identity theft.
In reality, even legitimate scam investigation services are rarely able to recover money for scam victims.
“Scammers pose as trusted parties, such as government agencies, lawyers, or even charities. We are also aware of criminals pretending to be a victim themselves and claiming that a specific person or entity helped them get their money back,” Lowe said.
Criminals contact victims via email, phone calls, mobile apps, social media or text. Some post online advertisements to attract victims.
How do financial recovery scammers choose their victims?
Victims of previous scams can be easily identified by criminals who often keep and sell information about individuals they have exploited.
Australians aged 65 and older were the largest reporting group and suffered the highest average losses, according to the latest data.
Lowe said re-victimisation and falling victim to multiple scams can cause significant emotional and financial harm.
“For example, we know of a person who was the target of multiple scams in succession. What began as a romance baiting investment scam was followed by a money recovery scam, which led to a remote access scam, and finally identity theft,” she said.
“In other cases, victims unknowingly proactively contacted criminals after seeing advertisements online.”
How to protect yourself from a financial recovery scam
The National Anti-Scam Centre says you should never accept offers from anyone who contacts you and says they can get your money back.
Any attempt at recovering money lost to scams should be made through your bank.
Do not give your financial, cryptocurrency or account details, or copies of your identity documents, to anyone online.
Never give strangers remote access to your computer even if they claim they are legitimate.
If you think you have been scammed or that a criminal has your money or personal details, report it to your bank immediately and contact IDCARE on 1800 595 160.
