Asset Recovery Scams: The Secondary Fraud Targeting Scam Victims
In the world of financial fraud, a particularly insidious trend has emerged – criminals have begun hunting people who have already fallen victim to other cons. This type of scam, known as an asset-recovery scam, preys on the desperation of people who have lost their life savings and are willing to do anything to get their money back.
The mechanism of this fraud is exceptionally cynical. Criminals obtain lists of people who have already fallen victim to various forms of financial fraud – from Ponzi schemes to failed cryptocurrency investments. Sources for this information often include court documents, public registries, or even lists sold by previous fraudsters. They then contact the victims, offering help in recovering lost funds – for an upfront fee, of course.
According to Federal Trade Commission data, in the United States alone, losses from this type of fraud reach hundreds of millions of dollars annually. What’s particularly troubling is that victims are often elderly people who have already lost significant sums in previous scams. In 2015, the F.T.C. banned Consumer Collection Advocates from operating after discovering that it extracted fees from elderly people who had previously fallen victim to timeshare and precious-metals-investment scams.
The Manipulation Techniques
Fraudsters operating in the “asset recovery” industry use advanced psychological-manipulation techniques. They often present themselves as lawyers or collection specialists, claiming to have special contacts in regulatory agencies or financial institutions. Some go so far as to claim they’re working with government agencies or have access to confidential information about frozen funds.
In reality, most of these companies perform only basic activities that victims could do themselves for free. For example, they send standard letters demanding money be returned or file boilerplate complaints with regulatory agencies. Sometimes they file claims that are already time-barred or have no chance of realization due to lack of proper documentation, thereby creating a certain formal appearance of conducting debt-recovery activities. This makes it more difficult in the future to formulate charges against the scheme’s organizers, who defend themselves by proving that they did, after all, take certain actions to recover the funds.
A particularly dangerous aspect of this fraud is the way it prevents victims from taking actual legal steps. Fraudsters often discourage their victims from independently contacting law enforcement, claiming that doing so could harm the fund-recovery process. In this way, they not only extract additional money but also delay the moment when the victim might take actual legal action. This is often also an element of connections between those who committed the original fraud and those who organize the “asset-recovery scam,” ensuring that the underlying crime isn’t revealed to law enforcement.
The extraction process can last for months. After the initial fee, further demands appear – additional legal costs, administrative fees, taxes, or commissions. Each payment is presented as the “last” before recovering the money. Some victims lose additional tens of thousands this way, believing they’re getting closer to recovering their originally lost funds.
Why Victims Fall for It Again
The Psychology of Commitment – A particularly sad aspect of fraud psychology is the way victims gradually lose the ability to rationally assess the situation. It’s a process similar to how a frog won’t jump out of slowly heated water. Each successive decision to engage more deeply in the scam seems logical in the context of previous decisions.
This mechanism, known to psychologists as escalation of commitment, is reinforced by our natural reluctance to admit errors. The more we’ve invested in time, money, and emotional engagement, the harder it is to accept that we’ve fallen victim to fraud.
The Role of Emotions in Decision-Making – Contrary to what we often think, most of our decisions – even financial ones – are made primarily emotionally and only later rationalized. Fraudsters understand this perfectly and can manipulate the entire spectrum of our emotions – from euphoria associated with potential gain, through fear of missing an opportunity, to feelings of guilt or gratitude.
Particularly dangerous is the combination of positive and negative emotions – for example, fear of loss with hope for quick profit. This emotional roller coaster can effectively shut down our critical-thinking mechanisms.
The asset-recovery scam represents a kind of predatory efficiency that’s almost admirable in its ruthlessness. The fraudsters aren’t casting a wide net, hoping to snag the occasional victim. They’re working from a curated list of people who have already demonstrated their vulnerability, who have already shown they’ll transfer money based on promises, who have already been through the psychological process of hope, investment, and loss. It’s the difference between cold-calling random numbers and having a database of people who’ve already bought what you’re selling.
What makes this secondary fraud so psychologically devastating is the way it weaponizes hope itself. After losing money to a scam, victims experience not just financial damage but a kind of cognitive injury – their sense of judgment has been compromised, their trust in their own decision-making has been shaken. The asset-recovery scam offers what seems like redemption: a chance to undo the mistake, to be made whole, to prove that you weren’t a fool, just unlucky. The fraudster isn’t selling a service; they’re selling absolution.
The cruelest element is the way these scams delay actual recourse. Every month spent believing the fake recovery company is working on your case is a month not spent filing police reports, consulting actual lawyers, or pursuing legitimate remedies. The fraud doesn’t just extract more money; it consumes the time during which recovery might have been possible. It’s a recognition that the best way to ensure a crime goes unpunished is to convince the victim that justice is already being pursued – by you, the person currently robbing them for the second time.
Founder and Managing Partner of Skarbiec Law Firm, recognized by Dziennik Gazeta Prawna as one of the best tax advisory firms in Poland (2023, 2024). Legal advisor with 19 years of experience, serving Forbes-listed entrepreneurs and innovative start-ups. One of the most frequently quoted experts on commercial and tax law in the Polish media, regularly publishing in Rzeczpospolita, Gazeta Wyborcza, and Dziennik Gazeta Prawna. Author of the publication “AI Decoding Satoshi Nakamoto. Artificial Intelligence on the Trail of Bitcoin’s Creator” and co-author of the award-winning book “Bezpieczeństwo współczesnej firmy” (Security of a Modern Company). LinkedIn profile: 18 500 followers, 4 million views per year. Awards: 4-time winner of the European Medal, Golden Statuette of the Polish Business Leader, title of “International Tax Planning Law Firm of the Year in Poland.” He specializes in strategic legal consulting, tax planning, and crisis management for business.
