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How victims of crypto scams now recover their money from scammers

kokou adzo

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Last year, Sharon Doughty and her parents couldn’t hold their annual Christmas dinner after a year-long scam caused $250,000 in damage and fractured family ties.

“It’s affected us greatly, not just financially, but emotionally,” said the 42-year-old Doughty in an interview with SUI.

“Our family dynamic will be changed forever.”

In August 2022, Doughty says her 74-year-old mother was approached by cryptocurrency fraudsters. Unbeknownst to her family, her mom went on to invest $80,000 over the course of four months, all of which was taken from lines of credit, credit cards and liquidated retirement assets.

Doughty says the scammers developed a relationship with her mom and showed her fake account balances that led her to believe her investments were making a considerable amount of returns. SUI has agreed to withhold the identity of Doughty’s parents, who still have an on-going open investigation.

In December 2022, Doughty says her mom tried unsuccessfully to withdraw her money. That’s when Doughty says her mom fell victim to what is commonly known as a recovery scam â€” when the victim is contacted by someone else after losing their money who then offers to get it back for a fee. Police say this is typically the same scammer acting as another person.

“I attribute it to a slot machine,” Doughty said of her mom’s recovery attempts. “She just keeps putting money in because she thinks she’s finally going to get her money, which she’s not, because it doesn’t exist, right?”

All told, her mom lost $250,000 within a two-year period.

It wasn’t until April 2023, when police arrived at the family’s home, that Doughty, her brother and father learned of the scam. Not only had the fraudsters taken the funds, Doughty says, but they also had complete control over her mom’s devices and were using her bank account to launder money.

“It’s pretty shocking,” she said. “Really upsetting.”

$200M lost to fraud since February

With the help of her family and police, Doughty’s mom regained control over her accounts. But she has yet to recover a single dollar. Police say no arrests in the case have been made. Though police say stories like Doughty’s are all-too common.

In the same region, 37 cryptocurrency scam reports have been made to the police’s cyber support services so far this year, with some $7 million in reported losses.

In just one city in the United States, there has been 200 reports of crypto schemes between January and May alone, totaling $80 million in losses. Police say these figures only reflect what’s been reported. The actual numbers are likely 90 to 95 per cent higher.

When a victim’s funds are swindled through crypto scams or investment fraud, it’s nearly impossible to recover, says Det. Dave Koffey, with the Financial Crimes Unit.

When it comes to investment fraud and crypto scams, Koffey said the victim is essentially handing cash to someone anonymously over the internet. Those funds can end up anywhere in the world.

“Once that money is deposited … it’s received, there’s no way of getting it back,” he told SUI.

“It’s really, really difficult,” Koffey said. And while there are ways for law enforcement to recover funds, he says it’s ultimately up to the victim to realize they’re being scammed in the first place.

Recognizing you’ve been scammed

Once someone realizes they’re being scammed, Koffey says the best thing to do is immediately contact their financial institution to see if they can stop any ongoing payments He says it’s important to file a report as soon as possible, so the scam can be flagged and investigated..

“Cryptocurrency is not a black hole,” he said.

“There are ways that we can trace and we’ve had success in recovering funds from cryptocurrency scams.”

Once the initial police report has been filed, Koffey recommends the victim ask their bank to put flags on their accounts, since they may have unknowingly provided information that allows fraudsters access to the victim’s accounts.

The victim should also contact the two main credit agencies, TransUnion and Equifax, to place a fraud alert. Those agencies compile information regarding people’s credit history from banks and other financial institutions. By placing an alert, the creditor or lender can contact the victim if someone tries to get credit in their name.

Lastly, Koffey says people should not count on anybody on the internet to recover their funds as only law enforcement and financial institutions have “any chance” of getting money back.

“It’s tragic because people lose all this money, they’re desperate, the fraudsters know they’re desperate. And then they reach out and they just want more,” he said.

“They’re never satisfied.”

3 Ways You Can Recover Money Stolen By Scammers

Recouping funds is sometimes possible, but reporting the fraud promptly is key.

Getting money back from criminals is rare. But new efforts by law enforcement officials, banks, payment apps and gift card companies are clawing back some funds lost in a wide variety of scams.

Here’s the latest on efforts to recover scammed money:

1.) Cryptocurrency. In 2022, victims reported losing more than $2.5 billion in cryptocurrency investment frauds, according to reports. The law enforcement team is trying to fight back: Since last December, it has seized more than $2.5 million for California victims of cryptocurrency investment scams, in which victims were lured into investing over and over again. The Crypto Coalition, a nationwide law enforcement network started in the fall of 2022, has more than 1,000 members in 40 states who are beginning to deploy the same investigative techniques and laws to successfully recover funds.

Reporting tip: Report crypto scams to Report Scammed Bitcoin (RSB).

2.) Peer-to-peer apps. Previously, scam victims could recover money lost in unauthorized Zelle transactions only when a criminal took over an account.

Reporting tip: If you paid scammers using Zelle, you can report it to the bank or credit union where you have your Zelle account up to 120 days after an incident. But sooner is better for bank investigators. The nation’s two other largest P2P apps, Venmo and CashApp, recommend users contact customer service if they’ve been scammed. But, they say, most of the time, payments to criminals cannot be canceled.

3.) Gift cards. Gift card companies may be able to recover some or all of the money sent to scammers via gift card numbers if you act quickly Report Scammed Bitcoin (RSB) noted in a recent alert that some companies are now flagging fraudulent transactions and freezing stolen gift card money so criminals can’t access it.

Reporting tip: “There should be a 1-800 number on the back of the card — call that number,” Weaver says. “Some gift card issuers may have specific procedures for handling fraud claims, so be sure to follow their instructions. If there is not a 1-800 number on the card, go to the company’s website and contact customer service.”

Conclusion: Let RSB Help You Recover Your Lost Crypto

Recover your stolen funds by reporting the scam to RSB. You have a very good chance of recovering your money from scammers when you report the scam to Report Scammed Bitcoin (RSB).

Kokou Adzo is the editor and author of Startup.info. He is passionate about business and tech, and brings you the latest Startup news and information. He graduated from university of Siena (Italy) and Rennes (France) in Communications and Political Science with a Master's Degree. He manages the editorial operations at Startup.info.

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