Beware the latest money recovery scams

22 Jun 2022

Australians are currently being warned about a spike in reports of unsolicited offers of help to recover money for an up-front payment. We explain how these scams work and who is at risk.

According to the Australian Competition & Consumer Commission (ACCC), there were 66 reports of money recovery scams in the first quarter of 2022. That represents a 725 per cent increase compared to the same period in 2021.

So if you’ve ever been the victim of a scam in the past, or you know someone who has, it’s critical to keep your wits about you to ensure a devastating event doesn’t get repeated.

WHAT IS A MONEY RECOVERY SCAM?

Money recovery scams target people who have already lost money to a previous scam by promising to help victims recover their losses after paying a fee in advance. By the end of March this year, Australians had already lost over $270,000 to these scams – a concerning increase of 301 per cent.

These unscrupulous scammers employ sinister tactics of deception followed by complete disappearance, explains ACCC Deputy Chair Delia Rickard.

“Scammers will ask for money and personal information before offering to ‘help’ the victim and will then disappear and stop all contact,” Rickard stated.

WHO IS AT RISK?

Unfortunately, any previous scam victim is at risk of being targeted again. Scammers will make contact with the unsuspecting victim, posing as a trusted organisation like a law firm, government agency, or dedicated fraud taskforce.

“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,” Rickard said.

WHAT YOU NEED TO KNOW

These scams are often supported by websites that on face value appear to be official. The website will likely feature fake testimonials from other victims the organisation claims to have ‘helped’.

In addition to an up-front payment for services, the scammers might request victims fill out fake paperwork or provide identity documents – consider this a major warning sign. And if you’re suddenly being asked to provide remote access to your computer or smartphone, it’s time to think very carefully about this person’s credentials and motivations.

Another tactic to watch out for is scammers making contact by phone or email and trying to convince you that you’ve unknowingly been involved in a scam and are entitled to a settlement refund – even though you’ve never had any suspicions or noticed any missing funds.

“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,” Rickard added.

“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’.”

Remember these simple pieces of advice for avoiding money recovery scams:

• Never give financial details or copies of identity documents to someone you’ve never met in person.
• Never give strangers remote access to your devices.
• Delete unsolicited money recovery messages and ignore future contact. 

WHAT TO DO NEXT

The ACCC advises people who believe they have lost money to a scam to contact their bank or financial institution as soon as possible. If the response does not meet their expectations, victims can make a complaint to the Australian Financial Complaints Authority, a free and independent dispute resolution service. And it’s worth noting that financial institutions may be able to protect future victims by finding where the money was sent and blocking the scam accounts.

Victims of a scam or identity theft should act as quickly as possible to reduce the risk of financial loss or other damages. For help developing a specific response plan, get in touch with IDCARE – a free government-funded service that will never contact you out of the blue. 

For further information about these and other types of scams, visit scamwatch.gov.au