Recovery room scams
The only thing worse than being a victim of a scamScam When someone tries to make money by misleading or tricking another person.+ read full definition once, is being ripped off twice. Unfortunately, this happens to about one out of every three victims of fraud. Some scammers sell their victim’s contact details to other scammers. This second set of scammers pretend to be good guys who promise to help the victim get their money back from the original scammers, for a recovery fee. This is sometimes called a recovery room scam. Once the fee is paid, the scammer disappears with the recovery fee and the victim never sees that money or the original amount they lost again.
What a recovery room scam looks like
Imagine that you have already fallen for a scam. Perhaps someone has convinced you to investInvest To use money for the purpose of making more money by making an investment. Often involves risk.+ read full definition in a company that turns out to be fake. You lose some of your hard-earned money. You may be feeling angry, embarrassed and worried about paying the bills. You can’t believe this happened to you and you desperately want your money back.
Then one day someone contacts you. They might tell you they work for a bank or law enforcement. They convince you they are trustworthy and need your help to catch the people who took your money. And the person will say that they can help you get your money back. All you need to do is pay them a fee to help recover your money.
Being a victim of fraud can lead to feelings of shame and stress. Recovery room scams exploit these feelings by offering what seems like an easy way out.
Five tips to avoid being fooled twice
1. It’s okay to be cautious. Be wary of anyone contacting you who:
- Claims to be with the police, government agencies like Canada Revenue Agency, a bank, a collection agency or securities regulatorSecurities regulator A government agency that enforces the securities act in jurisdiction it has authority over. This act is made up of laws that establish rules for issuing and trading securities. The Ontario Securities Commission is the securities regulator for Ontario.+ read full definition but you cannot confirm who they are or who they work for.
- Knows details about your lost money but you have never connected with before.
- Promises to get your lost money back for a fee.
2. Be suspicious of anyone promising to help you get back money you were scammed out of:
- Don’t be afraid to hang up the phone.
- Think about how anyone else could legitimately know that you’ve been a victim of fraud, especially if you didn’t report it.
3. Do not shareShare A piece of ownership in a company. A share does not give you direct control over the company’s daily operations. But it does let you get a share of profits if the company pays dividends.+ read full definition information with anyone unless you can confirm who they are:
- Always independently check information. Contact the real organization that the person claims to be with to ensure you know who you are dealing with.
- If organization is unknown, don’t bother checking, just hang-up and move on.
- Do not trustTrust An account set up to hold assets for a beneficiary. A trustee manages the assets until the beneficiary reaches legal age.+ read full definition any confirmation contact information provided by the potential recovery scammer. Scammers may give you the name of an accomplice who will verify the scammer as legit, but of course they are in on the scam.
4. Never pay a fee to anyone who says that it’s needed to recover money you lost to a scammer.
5. If you have any suspicions that you may have been in a victim of fraud, please reach out to our Contact Centre at the Ontario Securities CommissionOntario Securities Commission An independent Crown corporation that is responsible for regulating the capital markets in Ontario. Its mandate is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair and efficient capital markets and confidence in capital markets, and to contribute to the stability of the financial system and the reduction of systemic…+ read full definition: 1-877-785-1555.
Remember that if you’re being pressured to take action quickly, this is one of the 4 signs of investment fraud. If you think you’ve been approached by a fraudster, take action and report it.