How 'Refund' and 'Recovery' Services Re-Scam Victims — Prevention Guide

When the Rescue Call Is the Scam: What this guide covers

After you lose money to a scam, the instinct to get it back is natural — and exactly what fraudsters count on. Con artists now run “refund” or “recovery” services that promise to retrieve victims’ money for a fee. Instead of help, victims often suffer a second loss and wider identity exposure. This article explains the common tactics, clear red flags, immediate actions to limit harm, and where to report these crimes.

Consumer protection agencies and trusted nonprofits are warning of a rise in these schemes: the Federal Trade Commission (FTC) calls them “refund and recovery scams,” and the Better Business Bureau has documented an uptick in reports where scammers re-target people who were already defrauded.

How recovery/refund scams typically work

Understanding the playbook helps you spot the scam quickly. Common patterns include:

• Targeting previous victims: Scammers buy or trade "sucker lists" — collections of people who already lost money — then contact them offering help.
• Unsolicited contact: A call, text, email, or social message claims a refund, prize, or recovery is ready but requires a fee or information first.
• Upfront fees and fake invoices: They ask for a "processing fee," "retainer," "insurance," or other advance payment (often requested via gift cards, crypto, or wire transfers). Paying upfront is the hallmark of the scam.
• Impersonation and fake credentials: Fraudsters pose as government agencies, law firms, banks, or even the original merchant. They use official-sounding names, logos, and fake testimonials to build trust.
• The overpayment / check trick: You may receive a bogus refund check for more than you lost and be asked to return the difference — later the check bounces and you’re on the hook.

After the initial payment the scammers either disappear or continue asking for more money under new pretexts, making recovery increasingly unlikely.

Red flags — How to tell a recovery offer is a scam

Be skeptical if you notice any of the following:

• Unsolicited promise of recovery — you didn’t ask for help but were contacted out of the blue.
• Any request for money upfront — legitimate authorities and trustworthy lawyers will not demand prepayment to return your own money.
• Pressure to use hard-to-trace payments — gift cards, cryptocurrency, or wire transfers are common in scams.
• Requests for sensitive personal data — no real recovery agent needs your full bank or Social Security number to "process" a refund by phone or email.
• Vague or unverifiable business details — missing physical address, no verifiable registration, or fake testimonials.

Practical prevention steps

1. Stop communication immediately with anyone who asks for fees or sensitive data out of the blue.
2. Verify independently: Look up official phone numbers or agency contact info yourself — don’t use numbers or links the caller or email provides.
3. Refuse unusual payment methods: If they insist on gift cards, cryptocurrency, or rapid wire transfers, treat it as a scam.
4. Talk to your bank or card issuer right away if money has moved. Banks can sometimes stop transfers or flag suspicious activity.
5. Use trusted legal or victim-support organizations: If you want professional help, choose an organization with verifiable references, written terms, and no upfront guarantee. Ask for a written engagement agreement that explains fees and payment timing.

If you already paid — immediate recovery and reporting checklist

Act quickly to limit damage. The FTC and other agencies recommend these steps:

• Contact your bank or card issuer and tell them the transfer was fraudulent; ask to reverse or freeze transactions where possible.
• Report to federal and local agencies: File a report with the FTC at ReportFraud.ftc.gov and your state attorney general; keep copies of all communications. Reporting helps investigations and can prevent others from being targeted.
• Contact law enforcement: For large losses or if the scam involved in-person meetings or stolen identity, file a police report and get a report number for banks/insurers.
• Check for identity theft: If you shared personal data (SSN, bank account, or ID), place fraud alerts, freeze credit if necessary, and consider an identity-theft report with the credit bureaus.
• Preserve evidence: Save emails, text messages, receipts, and banking records — they help investigators and civil recovery efforts.

Remember: legitimate government agencies and reputable consumer-advocacy groups will never ask for payment to return money. If a rescue sounds too convenient, it probably is.

If you’re unsure whether an organization is real, check independent sources (BBB reports, state AG warnings, and FTC notices) before sending money or personal information.