Recently, the Financial Industry Regulatory Authority, Inc., (FINRA) posted a warning to investors regarding fraudulent advertisements for recovery scams, which offer to recoup investment losses for a single, upfront fee:
"While it's very enticing to hear you might be able to recover money lost from a previous investment or investment scam, some investors end up losing even more money to unregistered con artists who run so-called ‘recovery scams,'" said Gerri Walsh, FINRA's Senior Vice President of Investor Education. "Fraudsters can paint a very credible story to persuade you to send money in advance to get back at least some of what you originally lost. But the sad fact is that the money you send may itself be lost for good."
While recovery scams have been around for a long time, their advance into investment recoveries is indicative of a sophisticated criminal evolution and the potential for larger losses.
Generally, recovery scams use a variety of lies to add credibility to their pitch. For example, some claim to represent companies or government agencies; some say they're holding the money for you; and others offer to file “necessary” paperwork on your behalf or get your name at the top of a list for victim reimbursement. FINRA noted that recent scams involving investment recoveries often included similar tactics, such as:
Notably, FINRA and the FTC both warn that lists of previous victims are often kept, sold or recirculated amongst criminals, so it is common for scammers to "go back to the well" to try to take more money from a previous victim.
Read FINRA’s official Alert for more information on how to spot and avoid fraudulent "recovery" scams.
If you have questions or need assistance with your legal matter in California or nationwide, our experienced FINRA attorney in San Diego can assist you. Please contact us, or set up an appointment at our San Diego offices.