Find out how recovery room scams work, how to avoid scams and what to do if you are scammed.
UK consumers 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, if an explanation is given, it is likely to be false or implausible. For example, falsely claiming to be the FCA or working 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 consumers losses.
How recovery room scam works
Recovery room scams usually follow on from a boiler room or other type of investment scam where a consumer has lost money. The perpetrators of 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. The FCA never uses webmail providers to contact consumers, nor does the Government, law enforcement agencies or law firms.
Be aware of clone firms
Many bogus firms will use the name, firm registration 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
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 have 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.
Recovery room scams claim to provide services usually offered by claims management companies. A firm must be authorised by us to advertise or undertake these services in the UK. Check our Financial Services Register to make sure the firm is authorised. You can also check our Warning List of firms to avoid.
If you think you have been scammed
You can report the firm or scam to us by contacting our Consumer Helpline on 0800 111 6768 (freephone), 0300 500 8082 from the UK, or +44 207 066 1000 from abroad. You can also use our reporting form.
If you have any concerns at all about a potential scam, please contact us immediately.