distressed woman looking at laptop

They’re the worst of the worst: scams targeting people who’ve already lost money to a scam. If you’ve experienced a scam, you may be targeted by a refund or recovery scam. In these scams, someone says they can help get your money back or recover the prize or item you never got. You just need to pay them first. If you do, you’ll lose more money.

How refund and recovery scams work

Whether it’s a refund scam promising to get your money back or a recovery scam claiming to get you the prize or products you were promised, the scheme usually follows a set pattern. Here’s how it happens:

You’ve already paid a scammer

You may have given money to a timeshare resale scam, paid for a fake prize, or lost money to one of the many other ways scammers try to cheat you.

Scammers buy lists of people who’ve paid scammers

They call it a sucker list, with information about people – like your name, address, and phone number, the kind of scam that tricked you, and how much money you paid. Scammers buy, sell, and trade these lists, expecting people who’ve been scammed once to be good targets for being scammed again.

Scammers come calling – again

The scammer calls, emails, texts, contacts you on social media or sends a letter, claiming they’ll get back the money you lost or recover the prize or merchandise you never got. If you didn’t know you were scammed, no problem. The scammer, using the information they bought, can make up a story that sounds believable to helpfully tell you about the earlier fraud.

Scammers make you think you can trust them

The scammer may say they’re with a government agency, a consumer advocacy group, a law firm, or some other organization. Or they pretend to be with the scam company that took your money in the first place and say they’re offering refunds to dissatisfied customers. Sometimes, they claim they’re holding money for you, offer to file complaint paperwork with government agencies on your behalf, or say they can get your name at the top of a list for reimbursement. Whatever they say, it’s a lie designed to gain your trust – and your money.

They tell you to pay

Before they can recover your money or merchandise, the person who contacted you says they need you to pay or give them personal or financial information. They may call the upfront money a retainer fee, processing fee, administrative charge, tax, shipment, and handling charge. Or, they may say they need your Social Security number, checking, debit, or other financial account number so they can deposit a refund directly into your account. If you give them the money or personal or financial account information, your money will disappear, and they could steal your identity.

How to recognize refund and recovery scams

Did someone contact you and ask for an upfront fee? That’s a scammer. No matter how someone unexpectedly contacts you – by mail, online, telephone, social media or text message – don’t pay upfront. It’s a scam.

Did someone say they’re from a government agency like the Federal Trade Commission, a nonprofit group, or some other organization and need payment or your personal information? That’s a scammer. Government agencies and legitimate organizations will never ask for money to help you get a refund. They’ll never ask for your financial account numbers or other personal information and will not guarantee you’ll get your money back. Anyone who does any of these things is a scammer.

How to avoid refund and recovery scams

  • Don’t trust calls, letters, emails, texts, or messages on social media from someone who says they can recover the money you lost in a scam for a fee. You’ll lose more money.
  • Never pay upfront for a refund or help with a refund. That means never giving any personal information like your Social Security number or financial information like a bank account, credit card, or other payment information to get a refund. Anyone who asks for your personal or financial information or upfront fees is a scammer.
  • Know only scammers will insist you pay only with cash, gift cards, cryptocurrency, wire transfers through companies like Western Union or MoneyGram, or a payment app. Anyone who says you have to pay in any of these ways is a scammer.
  • Don’t deposit a refund check for more money than you lost. Some scammers will say they made a mistake in cashing the check, keep the amount you’re due, and return the balance. That’s always a scam. It can take weeks for a bank to discover that a cleared check is fake. In the meantime, if you return money to the scammer, the bank will want you to repay that money.
  • Research any organizations or government agencies that contact you. Search the organization’s name online, with words like complaint, scam or review. For government agencies, look up their number on your own. Then call to confirm they contacted you. But don’t call the number they gave you or the number from your caller ID.

Report refund and recovery scams

If you’ve lost money to a refund or recovery scam, or have information about the company or scammer who called you, report it to:

When you report these scammers, you help law enforcement stop them and alert others in your community to the scam.