Recovery room fraud is a deceptive practice in which scammers re-target victims of previous investment fraud, often involving cryptocurrencies. They offer to recover the lost investments but typically request an upfront payment. This fraudulent practice is increasingly observed, especially in countries like Belgium, where the FSMA (Financial Services and Markets Authority) frequently warns against such scams.
Why is Recovery Room Fraud in Crypto So Dangerous?
This type of fraud is particularly dangerous because victims of previous scams are especially vulnerable. They want to recover their losses, making them more likely to fall for the scam again. Personal information of previous victims is often sold to other scammers, meaning victims can be targeted multiple times.
How to Avoid Recovery Room Fraud?
Be wary of unsolicited contact: If you receive an unexpected phone call or email offering to recover your lost crypto investments, be cautious. Ask how the person knows about your loss, as reports of fraud are only shared with judicial authorities.
Beware of large upfront payments: Reputable parties like lawyers or accountants will always provide clear information about their fees upfront. If a party asks for large sums for vague reasons such as “opening an account on a platform,” it is likely a scam. Similarly, if they keep requesting smaller amounts for unclear reasons like “court costs” or “collection fees,” you are probably dealing with a scam. A professional will clearly outline the legal costs at the start of the case.
Check the legitimacy of the party: Before engaging with someone, verify whether the party is registered with regulatory bodies like the FSMA. Many fraudulent companies pose as legitimate entities but lack the proper license to offer financial services. Seek assistance from an advisor, such as a lawyer, if necessary. A quick internet search can also reveal a lot.
Report suspicious activities: If you suspect fraud, file a report with your local police immediately and report it to the FSMA.
Never share passwords or screen access: Scammers often ask for access to your computer or crypto wallet through screen sharing or request your passwords. Never share this information, even with so-called legal professionals. We will never ask for this.
Schedule an in-person meeting and ask for identification: A crucial step in avoiding fraud is to visit the "lawyer's" or "accountant's" office or other party offering assistance. This ensures that it is a legitimate physical location. Additionally, ask for identification. A genuine lawyer will have no issue showing their lawyer's card, providing extra assurance that you are dealing with a recognized professional.
Conclusion
Recovery room fraud is an increasing problem, especially in the crypto market, where regulations are less stringent and victims are more easily deceived. It is crucial to remain vigilant, never pay upfront fees, and always verify the identity and licenses of financial service providers. For more information and warnings, visit the FSMA website (https://www.fsma.be).
Do you have any questions or comments regarding the above issue? Feel free to schedule a non-binding consultation.
Christophe Romero Senne Verholle
Comments