How scam-victims get scammed twice…

With the rise of online scams, several companies are now offerings services to get your money back from illegal forex traders, binary options frauds, High Yield Investment Programs, CFD scammers and cryptocurrency thieves. Under names as “Asset Recover”, “Wealth Restoration”, “Refund Services” and “Chargeback Assistance” a multitude of companies offer to support you to get your money back. However, some of them are just scamming victims a second time….

Are chargeback companies legit?

We can distinguish two kinds of companies:

• The freelancers: These are seemingly individuals who claim to be able to help scam victims get their money back. They rarely have a website and often contact victims via email or social media. They also post on scam fighting websites such as Scamadviser or review sites as Trustpilot.
• The companies: These parties are professionals. They have a phone number and website, often with testimonials. They also market their services via Google, Facebook, affiliate marketing and retargeting campaigns.

Unfortunately, many of these so-called wealth restoration companies have dubious backgrounds, especially the “freelancers”. Interestingly enough, most of these “experts” are coming from Israel where the binary options industry flourished before it was outlawed by the Knesset in October 2017. A lot of former binary options traders turned to help people who lost money in their trade.

Scam victims are shared on “Dummy lists” on the dark web

They try to scam people who already got scammed once. On the dark web lists of names and email addresses can be bought of people who got scammed before (so-called dummy lists). The victims have all kinds of backgrounds (although earlier research shows that more men than women fall for forex and investment scams than women and men usually also lose more). Amounts lost differ from $ 60 to hundreds of thousands of dollars.

The scammers approach these victims with services to “get their money back”. Once they have offered you a “free consultancy” victims must pay a fee in advance for their services or make a deposit as a guarantee that recovery service will get a commission once the money is recovered.

Scamadviser.com has received numerous complaints from scam victims who lost money a second time in this way as the company never replies after having received the advance payment or simply states it has been unable to recover the funds.

How do legit asset recovery companies work?

The companies who are offering real recovery services hardly ever approach the scamming forex, cryptocurrency or binary scammer directly as they know it is of no use. The scammer has already disappeared, taking your money with him.

Instead, they focus on the victims’ bank, credit card company or Paypal. They hold these companies accountable for the money which was lost. The legal case they use is that “they should have known” you were transferring money to a fraudulent company and should have blocked the transaction or at least have warned the scam victim.

The bad news is, that if the victim paid using a cryptocurrency, Moneygram or a wire transfer, it is extremely unlikely the recovery agency is able to get the money back.

In short, these processes to get money back are long (often 6 to 18 months) and involve a lot of legal quarrels with little chance for success.

How to check if a wealth restoration company is safe?

Clearly the freelancers are the least likely to be trusted. It is nearly impossible to determine who is behind the email address. The (in most cases American) phone number is often offered through a service that requires no identification. Freelancers are often recommended in reviews as you can see in the screenshot below. If you, however, google the phone number or email you see that the same text is used on many platforms, often by different people. The reviews are likely to be fake.

In general: if you are approached out of the blue by a freelancer or company claiming to be able to help you, do not do business with them. Firstly, in most countries, real lawyers are not allowed to solicit clients. Secondly, you should ask yourself how that organization has found you, and whether it was in collaboration with the company or person who scammed you in the first place.

The chargeback support companies are easier to check. Hereby a few tips:

• Call the company: If they do not offer a phone number this is already a bad signal. If they do answer the phone, ask how long have they been in business (tip: check the age of their website on Scamadviser.com). What is their process to get your money back? What are their fees?
• Ask for Company registration & ID: Ask for a company registration document and the ID or passport of at least one of the owners mentioned in this document. In this way, you at least know with whom you are dealing.
• Check the references: Many scammers show false testimonials online. Also ask for references, preferably from your own country (upon the chances that they are fake is reduced).
• Test their success ratio: Getting your money back is a long and difficult process. If they promise quick success and high probabilities of 80 or even 95%, you can be sure they are a scam, or it is so easy, you can just as well get your money back yourself.
• Validate their license to practice law: To be successful a lot of legal quarrels are essential. In some countries, this is considered a legal service and requires a license to practice law. In others, this is not the case. However, the wealth recovery company needs to either employ lawyers themselves or have a close relationship with a law firm. Ask for a copy of their license to practice law (or of their partner).

Advice: do it yourself or 100% performance-based

The sad reality is that it is very difficult to get your money back. If you paid with a credit card, Paypal, Alipay (or a comparable service). The best way is to contact this company first (read our article “How to get your money back”).

Usually, asset recovery companies only take on cases with a value of more than $ 5000. It is simply not worth their while to chase scams where less money was lost. They charge a set-up fee of $ 500 to 750 or 10% of the value. In addition, they often charge a 10% success fee.

We, however, do not recommend agreeing to an advance fee. In some countries like Canada and the USA it is even forbidden by law for companies in the money recovery business to ask any kind of advances. To make sure you get not scammed twice, we recommend to only work with companies who do not charge a set-up fee or deposit.

As far as we know only Payback Ltd. offers a recovery service to help you get your money back starting at $ 25000 of money lost for a fixed success fee of 10%.*

About Scamadviser

Scamadviser, an initiative of the Ecommerce Foundation, helps 2,5 million consumers monthly to determine if a website is legit or a scam by rating websites with the Scamadviser Trust Score. The algorithm of Scamadviser utilizes 40 independent data sources. From the IP address of the webserver, the availability of contact details on the website, the age of the URL, ratings on review sites and much much more.

Interested in joining the fight against online fraud and counterfeit, please contact us.

* Note: Payback was a partner of Scamadviser. Payback provided Scamadviser with lists of malicious websites known to them which we add to our database. Scamadviser referred to Payback if consumers have lost money from High Yield Investment Programs, forex and binary options scams. Scamadviser did not receive any commissions from Payback or visa versa. The cooperation with Payback was stopped around 2021 when it became clear that the websites reported by Payback to ScamAdviser contained many false positives, Payback marketing practices did not adhere to the standards set by ScamAdviser. In 2023, Payback was also reported by BaFin.

Sources:

• Why do consumers fall for scams?, Ecommerce Foundation.
• Fraud tainted binary options victims recovery firm shuts down, Times of Israel.
• US jails ex-binary-options fraudster who then claimed to help victims, Times of Israel.