New Scam Targets Senior Citizens Who Were Already Victims of Fraud
“Asset recovery” scams are making elderly consumers victims twice over
Sometimes bad things come in twos. The Consumer Financial Protection Bureau (CFPB) recently uncovered a new scam that targets senior citizens who were previous victims of money-making schemes, such as bogus timeshare investments. So-called asset recovery companies are contacting victims, promising to recover their lost funds — for a fee — and then disappearing.
The asset recovery companies often claim they have unique experience in helping fraud victims, the CFPB says, and charge several hundred to thousands of dollars. But once the consumer pays the fee, the company fails to perform the promised services.
They may, however, perform “services” that are useless to the consumer — things the consumer can do himself for free. For example, the company may submit a complaint to an agency, such as the CFPB, that does not charge anything to process a complaint. Or if the consumer used a credit card to pay the first scammer, the asset recovery company may dispute that charge with the credit card company.
The CFPB says consumers should watch for these three warning signs of an asset recovery scams:
A request for upfront payment. Don’t pay for any part of a service that hasn’t been performed. You can refuse the service and verify the organization before deciding to work with it.
Claims of insider information. Anyone can submit, for free, a complaint to a federal agency. Private companies do not have special access.
Requests for secrecy. No one should discourage you from seeking information or advice from family or friends before making a financial decision.
If you think you’ve been the victim of fraud, alert your bank and credit card companies immediately, the CFPB advises. Tell the bank not to allow future withdrawals by or charges to the scammer. If you paid for a service that wasn’t provided, dispute the charge with your financial institution. Also, report it to your local law enforcement office, and submit a complaint to the Federal Trade Commission.
Related: How to Avoid a Reverse-Mortgage Scam
The CFPB, which was created in 2011, takes on issues such as elder financial abuse, retirement investment scams and aggressive debt collection. Their mission is to educate the public, enforce laws that protect consumers and monitor financial markets for new risks. The bureau’s Office of Older Americans is the first federal body with a focus of safeguarding the financial interests of that age group, according to AARP.
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