A recovery scam happens when a fraudster targets someone who has already lost money to an online scam. The recovery scammer promises to help get the stolen money or crypto back in exchange for an upfront fee.
In many cases, the recovery scammer is the exact same person or ring that stole your money the first time. They may pretend to be a government investigator, lawyer, private detective, blockchain hacker, or law enforcement agent. They ask you to pay upfront fees for legal costs, processing fees, or blockchain taxes. Once you pay, they take your money and disappear again.
The Hard Truth About Crypto Recovery
It is very rare to recover money lost in cryptocurrency or online investment scams. Scammers operate overseas using complex networks to hide stolen funds.
Important DFI Notice: The Washington State Department of Financial Institutions (DFI) and law enforcement agencies investigate crimes, but it is very difficult to recover lost cryptocurrency funds for individual victims. Official government agencies will never charge you a fee or ask for payment to investigate a case or help you.
Common Ways Recovery Scammers Target You
- Social Media Messages: Scammers search online comments on Reddit, X (Twitter), Facebook, and YouTube for people complaining about losing money to crypto scams.
- Fake Blockchain Experts: Fraudsters claim to be "crypto recovery specialists" who can trace transactions and unlock stolen digital wallets.
- Fake Government Imposters: Scammers create fake letters, emails, or websites that look like they came from the FBI, SEC, FTC, or Washington State DFI.
- Demands for Fees" or Taxes: They claim they located your funds on a crypto exchange, but you must pay a "decryption fee," or "withdrawal tax" before the money can be released.
Warning Signs of a Recovery Scam
- Unsolicited contact: Someone reaches out out of the blue claiming they know about your past financial losses.
- Money-back guarantees: The company promises or guarantees they can recover 100% of your lost funds. Real legal and financial professionals never make guarantees.
- Upfront payment requests: Demanding cash, crypto, wire transfers, or gift cards before doing any work.
- Government claims: Claiming to work directly with law enforcement, the FBI, or DFI without official proof.
- Demands for secrecy: Pressuring you to keep the recovery service secret from your family, bank workers, or local police.
Are You Being Targeted by a Recovery Scam?
Ask yourself these key questions about any person or firm offering to help you:
- Did someone reach out to you out of the blue about money you previously lost?
- Are you being asked to pay money upfront before your funds are returned?
- Is the person asking you to pay using cryptocurrency, wire transfers, or gift cards?
- Does the person claim to have special software or secret connections to hack scammers and get your money back?
- Are you being told to keep the payment secret or lie to your bank about the transfer?
If you answered yes to any of these questions, stop talking to the contact right away and do not send any money.
How to Protect Yourself
- Never pay money to get money back: Legitimate government agencies, police, and financial regulators will never ask you to pay money to investigate fraud or return stolen assets.
- Ignore social media "recovery experts": Do not trust individuals on messaging apps or social media offering recovery services, no matter how many positive reviews or screenshots they show.
- Report fake websites: If a company claims to represent a state or federal agency, contact that agency directly using an official web address or phone number from a trusted source.
What to Do If You Lost Money to a Recovery Scam
- Stop all communication: Block the scammer on all messaging apps, social media accounts, and phone numbers.
- Notify your bank or credit union: Report the fraud right away to freeze your financial accounts and stop pending transfers.
- Save all records: Keep screenshots of messages, crypto wallet addresses, transaction hashes, receipts, and user profiles.
How to Report Recovery Scams
- Washington State DFI: Report investment and crypto scams online at dfi.wa.gov/file-complaint or call 1-877-746-4334.
- Washington State Attorney General: File a consumer protection complaint at atg.wa.gov or call 1-800-551-4636.
- Out-of-State Regulators (NASAA): If you live outside Washington, find your state or provincial financial regulator using the directory at NASAA Contact Your Regulator.
- FBI Internet Crime Complaint Center (IC3): File a report for online crypto and recovery fraud at ic3.gov.
- Federal Trade Commission (FTC): Report imposter fraud at reportfraud.ftc.gov.