Recovery scam
A recovery scam targets people who already lost money, offering to get it back for an upfront fee, then taking the fee and vanishing.
Also called: refund and recovery scam, recovery fee scam, asset recovery scam
A recovery scam targets people who already lost money, offering to get it back for an upfront fee, then taking the fee and vanishing.
What it means
A recovery scam targets people who have already lost money to a scam. The scammer says they can get it back, or help you claim a refund, a prize or a settlement, but you must pay a fee first. After you pay, the money never comes.
The FTC says scammers buy and trade lists of past victims, then pose as government agencies, law firms or consumer groups. They may ask for a retainer, a processing fee, or your Social Security or bank account numbers. The FTC's advice is not to pay anything in advance for a refund or for help getting one.
Federal law backs this up. Under the FTC's Telemarketing Sales Rule, a telemarketer may not collect a fee for getting back money you lost in an earlier transaction until seven business days after you receive it. Services from a licensed attorney are exempt.
What it means for you
Recovery scammers often call after a data breach, a settlement scam or a news story about lost money, because they know you are looking for help. Ignore unsolicited offers to recover money for a fee. Look up any organization on your own and check with your state attorney general. Real settlement money is paid by the administrator, and filing a claim directly with it costs nothing. For unclaimed money, use the free official searches first. If you already paid, report it to the FTC and your attorney general.
Example
Say you lost $500 to a fake settlement site. A week later a caller says he works with the court and can recover the $500 if you buy a $75 gift card for a processing fee. He knows your name and the amount because he bought a list of victims. You hang up, report both scams, and look up your bank's fraud line yourself.
FAQ
A telemarketer cannot charge for recovery services until seven business days after you get your money back, with an exception for licensed attorneys. The FTC also advises against paying anything upfront for a refund or for help getting one.
Act quickly. Contact the company you paid with, such as your bank, card issuer, wire service or gift card issuer, to try to stop or reverse the payment. Then report it at ReportFraud.ftc.gov and to your state attorney general.
Related terms
- FTC, Refund and recovery scams
- 16 CFR 310.4(a)(3), Telemarketing Sales Rule, recovery services (Cornell LII)
Updated Oct 18, 2026. Plain-English definitions for general information — not legal or tax advice.