Financial fraudRecovery of previously lost funds
This is commonly called a recovery scam or second-stage fraud.
The criminal specifically targets someone who has already been defrauded.
The fraudster claims to have special access to:
- blockchain investigators;
- lawyers;
- regulators;
- law enforcement;
- banks;
- asset-recovery specialists.
They tell the victim:
“We have found your money.”
The victim is then asked to pay a fee before the supposed recovery can take place.
The CSSF has warned that recovery fraudsters may also use remote-access software, claiming that they need access to the victim's computer to recover the money.
Concrete example
A Luxembourg resident has already lost €30,000 through an investment scam. Months later, they receive an email from a company claiming to specialise in recovering stolen investment funds. The company provides a convincing website and claims to have located €25,000 of the victim's money. It requests €2,500 for “legal and administrative costs”. After the victim pays, another €3,000 is requested for “tax clearance”. The supposed recovery never takes place.
The amounts in this illustration are hypothetical; the fraud mechanism reflects the pattern described by Luxembourg authorities.
Red flags,
stop if
- Someone unexpectedly contacts you after you have lost money in an investment or crypto scam.
- They claim they have already located or recovered your lost funds.
- They demand an upfront fee, tax, AML charge, insurance payment or deposit before releasing your money.
- They claim to be acting for the CSSF, Police, court, bank or another authority.
- They claim they can recover cryptocurrency or reverse a blockchain transaction using special technology.
- They ask for your banking password, OTP, crypto seed phrase, private key or wallet credentials.
- They ask you to install remote-access software or transfer crypto to a “recovery” or “secure” wallet.
- They pressure you to pay immediately or repeatedly introduce new fees before releasing your funds.