What is a money recovery scam?
Scamwatch has reported a spike in money recovery scams, where perpetrators target victims of previous scams and promise to help them recover lost money by paying an advance fee.
“Scammers will ask for money and personal information before offering to ‘help’ the victim and will then disappear and stop all contact,” ACCC Deputy Chair Delia Rickard said.
“Money recovery scams are particularly nasty as they target scam victims again. These scams can lead to significant psychological distress as many of the people have already lost money or identity information.”
What is the impact on Australians?
As of April 2022, Australians have lost over $270,000 to money recovery scams. So far this year Scamwatch has received 66 reports of money recovery scams, a 725 percent increase compared to the same period in 2021.
Red flags to look out for
Money recovery scams typically occur when a previous scam victim is contacted out of the blue, so this is the first sign to look out for. Other red flags include where the scammer:
- Poses as a trusted organisation such as a law firm, fraud taskforce or government agency.
- Has an official looking website and uses fake testimonials from other victims they have “helped”.
- Asks victims to fill out fake paperwork or provide identity documents.
- Requests remote access to computers or smart phones.
Scammers may also contact someone who has not been a victim of a previous scam, attempting to convince them that they’ve unknowingly been involved in one and are entitled to a settlement refund.
What to do if you suspect you are the target of a money recovery scam
“If you get contacted out of the blue by someone offering to help recover scam losses for a fee, it is a scam. Hang up the phone, delete the email and ignore any further contacts,” Ms Rickard said.
“Don’t give financial details or copies of identity documents to anyone who you’ve never met in person and never give strangers remote access to your devices.”
“Scammers can be very convincing and one way to spot them is to search online for the name of the organisation who contacted you with words like ‘complaint’, ‘scam’ or ‘review’,” Ms Rickard said.
What to do if you have lost money to a scam
If you have lost money to a scam:
- Contact your bank or financial institution as soon as possible. They may be able to find where the money was sent, block the scam accounts and help others to avoid sending money to scammers.
- If you are not happy with the financial institution’s response, you can make a complaint to the Australian Financial Complaints Authority which is a free and independent dispute resolution service.
- IDCARE is a free government-funded service which will help to develop a specific response plan.
Key takeaways
Money recovery scams are on the rise. Be cautious if you are contacted out of the blue, especially if you have previously lost money to a scam. Being aware of common red flags and knowing what to do if you have been scammed or are the target of a scam can help you to protect yourself and others.
