The Consumer Financial Protection Bureau is reporting on a financial scam targeting older consumers who previously were victims of fraudulent money-making schemes such as timeshare investments and in-home business opportunities. 

Bogus asset recovery companies, the CFPB reports, are contacting these past victims and promising them refunds for a substantial fee. Ultimately, they’re not delivering on those promises.

The scam involves the asset recovery firm contacting the consumer and requesting several hundred to thousands of dollars to get their money back. The company often claims it has unique expertise to help victims of fraud recover their funds. Once the consumer pays the upfront fee, the company fails to perform any service that the consumer could not have done themselves. 

If the consumer used a credit card to pay the original scammer, for example, the asset recovery company usually will do nothing beyond disputing the charge with the credit card company, which the consumer can do themselves for free. The scammer often submits a complaint to an agency that does not charge anything to process a complaint – such as the CFPB. 

"Moreover, they often do not even adequately follow through with the worthless services they offer; filing claims that are too old to be legally valid or without proper documentation to support the consumer’s claims,” according to CFPB officials.

Warning signs of a potential asset recovery scam, according to the CFPB, include: 

  • Upfront fees to recover money - Don’t pay for any part of a service that has not been performed. You have the right to refuse service and verify the legitimacy of any organization.
  • Claims of insider information and connections - Submitting complaints to federal agencies, such as the CFPB or the Federal Trade Commission, or state attorneys general offices are free to the public and easy to use. Private companies do not have special access to these free consumer complaint resources.
  • Requests for secrecy - Never allow anyone to discourage you from seeking information, support, and advice from family members, friends, or trusted advisors before making a financial transaction.

 

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