Find out how recovery room scams work, how to avoid them and what to do if you’re scammed.First published: 04/12/2019 Last updated: 30/10/2023 See all updates
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People are being increasingly targeted by recovery room scams. This is where fraudsters approach investors who have been scammed or had failed investments, offering to help them get their money back for an upfront fee.
There is usually no explanation on how money will be recovered or a false one is given. This could be by impersonating us or claiming to work with the Government, police or other regulator to recover any monies which have been lost. Generally, recovery rooms insist on being paid a fee or transaction charge before carrying out any services to recover any consumer’s losses.
How recovery room scams work
Recovery room scams usually follow on from a boiler room or other type of investment scam where a consumer has lost money.
The people behind the original scam may operate the recovery room and contact the victim again pretending to be from a different firm or sell on their details to other recovery rooms. The scam tends to involve cold calling with high-pressure tactics and upfront charges described as a tax, solicitor or administrative fees, which can result in losses that can be greater than the initial loss.
The recovery rooms often have professional-looking websites to persuade visitors they are legitimate and claim to have a UK presence when they don’t. These websites often make false claims to have successfully recovered money for other consumers involved in scams.
Recovery rooms generally use a web-based email address, such as gmail, Yahoo, Hotmail or Russian search engine, yandex. We never use webmail providers to contact consumers, nor does the Government, law enforcement agencies or law firms.
Be aware of clone firms
Many fake firms will use the name, firm reference number (FRN), and address of firms and individuals who are FCA authorised. This is called a clone firm. Scammers may even copy legitimate websites, making subtle changes such as changing the phone number.
How to protect yourself
Always be wary if you're contacted out of the blue about recovering money you've lost due to fraud or due to a failed investment, if you feel pressured to hand over money quickly, or if you're promised something that sounds too good to be true.
Be wary of websites, phone calls, and online or social media adverts promising to recover any money you may have lost from investments or fraud.
If you get a phone call offering to recover your losses, ask how the caller has information about your lost money. Any report of fraud can only be shared between other law enforcement agencies. It cannot be shared with a private business operating a recovery room.
If you’ve been asked to pay a fee or provide your bank account, card or other financial details, end all contact immediately and do not pay any money or provide any banking details.
If you're contacted unexpectedly by a financial business or individual, make sure you reply using the contact details on the FS Register.
A firm must be authorised and have permission for the right activities. If it doesn’t, you won’t have access to the Financial Services Compensation Scheme (FSCS) or the Financial Ombudsman Service if you want to complain.
If you can’t find a firm on the FS Register, call us on 0800 111 6768.
If you've been scammed
If you’re worried about a potential scam or you think you may have been contacted by a fraudster, report it to us. Call us on 0800 111 6768 or use our contact form.
If you’ve already invested in a scam, fraudsters may try and target you again or sell your details to other criminals.
The follow-up scam may be completely separate or related to the previous fraud, such as an offer to get your money back or to buy back the investment after you pay a fee.