Recovery scams: when you get scammed twice

A recovery scam is a second scam against someone who has already lost money: a person promises to recover what was stolen from you in exchange for an upfront fee and, once you pay, asks for more or disappears. Since 2023 the FBI has been warning of a rise in these schemes among victims of cryptocurrency fraud, who in 2022 alone reported more than $2.5 billion in losses to crypto investment scams. The rule is simple: no authority charges to recover your money, nobody legitimate calls you out of the blue to offer it, and nobody can guarantee you'll get it back. MATERIUM can't either: we never contact victims and never offer, charge for or handle the recovery of money.

What is a fund recovery scam?

In the UK it's known as a recovery room scam; the FBI calls them recovery schemes. A supposed firm contacts people who have lost money in an investment fraud and offers to get their losses back, or to buy back the worthless shares or tokens they were sold. In exchange, it asks for a payment first: fees, taxes, a bond, an insurance policy. The UK's financial regulator, the FCA, adds that these scammers often pretend to be the FCA itself, the government, the police or other regulators.

It's especially cruel because it hits people at their worst moment: with the money gone, feeling ashamed and desperate to fix it.

How do fund recovery scams work, step by step?

1. The contact. They call you, message you on WhatsApp or social media, or find you after you've posted about your case in a forum. Sometimes you're the one who finds their ad: the FBI warns of ads for “crypto recovery” services in search results, on social media and in the comment sections of news articles and videos.
2. The credibility. They know your case: the amount, the dates, the company that scammed you. According to the FBI, that's common, because they may be the same scammers or may have bought lists of victims.
3. The authority. They claim to be lawyers, an international agency, or a firm that “works with the FBI,” the SEC, the FCA or Europol. They may use fake letterheads of real law firms or cite agencies that don't exist.
4. The good news. “We've located your funds,” “they're in an account abroad,” “the court has ruled in your favor.”
5. The payment. To release the money, you have to pay first: a commission, taxes, a verification fee. Often in cryptocurrency or gift cards.
6. The escalation. After the first payment, another obstacle appears. The FBI adds that they sometimes ask for personal and banking details to “verify your identity,” so the theft keeps going.

What are the red flags of a recovery scam?

• They contact you without your asking to offer to recover your money.
• They ask you to pay upfront for anything before they return a cent.
• They guarantee the result. Nobody can guarantee it.
• They say they work with the police, the FBI, a regulator or a court. Authorities don't charge for investigating and don't work with “partners” who cold-call you. As the FBI puts it, no law firm is an officially authorized partner of US government agencies.
• They want payment in cryptocurrency or gift cards.
• They tell you your funds are at a foreign bank and that you have to open an account there through their website.
• They add you to a WhatsApp or Telegram group “for security.”
• They ask you to keep it secret or push you to decide today.

If you get an offer like this, run it through the scam checker.

Recovery scam examples: what real cases show

Fake law firms (US, 2023–2025). The FBI has issued three public service announcements about companies and supposed law firms that approach victims of crypto scams offering to trace and recover their funds. They charge an initial fee and then stop responding, or they hand over an incomplete tracing report and ask for more money. The 2025 alert adds that they target older adults in particular, present themselves as “authorized partners” of government agencies and even invent agencies, such as a supposed “International Financial Trading Commission.” The FBI points out that private-sector recovery companies cannot issue seizure orders to recover cryptocurrency.

The fake regulator (UK). The FCA warns that recovery room scammers often contact people who have already lost money and claim to be from the FCA, the government, the police or another regulator, sometimes even cloning the identity of an authorized firm. The FCA's advice is to use only the contact details listed in its own register and to check its Warning List, where it flags firms it believes are operating without authorization.

After the big cases. After the collapse of frauds like OneCoin or FTX, their victims are an obvious target for these offers. Real repayments come another way: the FTX bankruptcy estate or the Madoff victim fund, both organized through the courts and never offered over the phone. We explain it in crypto scams.

Why does it work?

Because the scammer turns your own feelings against you: shame at having fallen for it, which pushes you to fix it without telling anyone; authority, from someone who claims to be a lawyer or an official; and hope, which makes one more payment seem reasonable if it brings everything back. They're the same levers as the first scam, reused. We explain them in the Laws of Deception.

Can you get money back from a scammer? What really helps

1. Don't pay anyone who promises to recover your money, however convincing they seem.
2. Call your bank immediately: in some cases it can try to stop or dispute a transaction.
3. Report it, with all the evidence. In the US, to the FTC at ReportFraud.ftc.gov and, if it happened online, to the FBI's IC3; in the UK, to Report Fraud, the service that replaced Action Fraud. If someone claims to be from the police, call the official number yourself to check.
4. Tell the regulator. If it was an investment: in the US, the SEC; in the UK, the FCA, which also publishes its Warning List.
5. If you want to go to court, find a lawyer yourself and check that they're licensed to practice. Don't hire someone who found you.
6. Ask for support. Tell someone you trust: shame protects the scammer, not you.

You'll find the complete guide in what to do if you get scammed, and before you hire anyone, you can check if a broker or firm is registered.