Recovery Room Schemes: How to double your losses
We’ve been getting some inquiries from investors who have been contacted by a company wanting to buy their shares in another company. These approaches that investors are describing sound very much like a recovery room scheme.
In a “recovery room scheme”, companies prey on people who have already been victimized by other investment scam artists. These companies contact investors through email or phone and will promise to help you “recover” or get your money back - for a fee.
The required fees supposedly cover the company’s “administrative” costs and they often ask you to pay in a method that is difficult for you to recover at a later time (such as money orders or wiring money to an offshore account). Once you hand over your money, especially to an overseas location, it is nearly impossible to get it back.
These scams are also known as “recovery room operations,” “advance fee schemes,” “reload scams,” “re-up schemes,” or “re-victimization scams.”
To protect yourself and your family from falling for a recovery room scheme, watch for these warning signs:
- Sympathy: The caller seems sympathetic to your financial loss, but you don’t even know them.
- Incorrect information: The company offering to help you seems to have collected details of your personal information and investment, but some of it is incorrect (such as the amount of your shares).
- Unclear location: You are misled as to the company’s location (i.e. telling you they are from one country, when your call display shows another).
- Misleading credentials: The person contacting you claims to be a lawyer who will start putting together your file for a small fee.
- False references: The caller gives you impressive sounding names of supposed “regulators” with whom they are registered (to assure you of their legitimacy). Do a quick online search to see if these “regulators” actually exist.
- Unprofessional contract: The offer/contract you are presented sounds amateur or contains unfamiliar investment jargon. Don’t let the caller fool you into thinking they know more than you.
- Poor contact details: When you try to contact the company or do further research on them, you find that the contact information you were given is of poor quality and it may be very difficult to reach them.
Here are some tips to keep you on track:
- Don’t send money to someone in advance of receiving a service.
- Ask yourself this: Why would someone try to “help me out” by offering to pay me substantial amounts for worthless companies/ shares?
- If the company or individual offering to help you lives outside of your country, think twice before taking them up on their offer of help - why they would want to act on your behalf?
Don’t let someone take advantage of your financial loss. If you or someone you know has been contacted by what you believe to be a recovery room caller, contact the ASC via email: email@example.com or toll free phone: 1-877-355-4488.