BBB: Scammers targeting victims again with fake refund promises
The Better Business Bureau warns of a new scam trend: fraudsters preying on people who’ve already been scammed, offering to recover lost funds for a price.
“This deceptive tactic, known as a ‘recovery or refund scam,’ exploits the emotional vulnerability and financial desperation of previous victims,” said Steve Bernas, BBB president and CEO.
Reports to the BBB and the Federal Trade Commission show a surge in cases where con artists pose as representatives of government agencies, law enforcement, or financial institutions, claiming they can help victims reclaim their money, if they pay up-front fees. What’s worse, once someone falls for a scam, their personal information may be sold on the dark web, flagging them as an easy target for future schemes.
How the scam unfolds
• The first hit: Victims lose money to a scam, whether it’s a fake investment, sweepstakes, online purchase, or romance scheme.
• The second strike: Weeks or months later, they’re contacted by someone claiming to have recovered their funds or offering to do so if they pay for “processing,” “insurance,” or “legal fees.”
• The final blow: After payment, the so-called “recovery agent” vanishes, leaving the victim with another financial loss.
“These scammers know exactly who to target because they often buy or trade lists containing the names, contact information, and details of previous victims,” Bernas said. “The con artists then exploit both the financial loss and the emotional vulnerability of people who are desperate to get their money back.”
Red flags of recovery or refund scam
• You are contacted unexpectedly by someone claiming they can recover lost funds or the prize or item you never received.
• The caller demands payment up-front before providing any service.
• The person claims to be from a government agency or law enforcement — but cannot provide proof.
• There is high pressure for you to act quickly and keep the offer secret.
Tips to help protect yourself
• Do not pay up-front fees for any recovery service.
• Be aware that crooks will insist on payment with cash, gift cards, cryptocurrency, wire transfers through companies like Western Union or MoneyGram, or a payment app. Anyone who says you have to pay in any of these ways is a scammer.
• Don’t deposit a refund check for more money than you lost. The check you receive is most likely fake. The scammer will ask you to return the overpayment. When the bank discovers that the check was fake, they will want you to repay the money.
• Verify the organization by looking up its official phone number or website and contacting it directly.
• Report the contact to the BBB.org/ScamTracker and the Federal Trade Commission at ReportFraud.ftc.gov.
“If it sounds too good to be true — especially when it comes to getting back money from a scam — it probably is,” Bernas said. “Your best defense is awareness and caution.”
For more information visit BBB.org or follow us @ChicagoBBB on social media. Look for the BBB Seal, The Sign of a Better Business.