Avoid Fraud

Recovering from Investment Fraud: Start with These 6 Steps
Recovering from Investment Fraud: Start with These 6 Steps

Most of us know someone who’s been a victim of a financial scam, or we might have been a target ourselves. If you’ve been impacted by this type of crime, there are ways you can get both financial and emotional assistance.

The toll of investment fraud can extend well beyond lost money. You might be coping with the aftermath of a compromised identity, damaged credit and financial loss, as well as a range of emotions, including anger, fear and frustration. You’re not alone. A study funded by the FINRA Foundation found that nearly two-thirds of fraud victims experience at least one severe emotional consequence—including severe stress, anxiety, insomnia and depression. Resources are available that can help.

Perpetrators will frequently dispose of your money immediately after taking it, so you might never get it back. Depending on the severity of the fraud, part of your recovery might require re-mapping your spending plans in light of any changes to your financial stability. However, your recovery is also about finding ways to recover emotionally from the crime and protecting yourself from future scam attempts.

While full financial recovery might be difficult to achieve, it’s critical that you report the crime as quickly as possible. Reporting any financial fraud, no matter how small, helps law enforcement, regulators, government agencies and other organizations put a stop to the fraud, prevent harm to more consumers, and pursue the criminals committing the fraud.

Investment Fraud Recovery Checklist

Taking the steps below can help you reclaim power from the fraudsters and begin to move forward.

1. Create a file. Start by collecting all relevant documentation concerning the fraud in one file that you keep in a secure location. The file should include all the information you have, including the perpetrator's name (and any other names provided to you), contact information and other details, such as a website address. Note any associated financial account information, including affected accounts and, in the case of crypto assets, the transaction hash and deposit address. If the perpetrator claimed to be registered, include the purported regulatory registration numbers, if available. Document the timeline of events—whether days, months or years—and save screenshots of all communications. Include any reports you made to law enforcement and a copy of your most recent credit report from all three credit reporting companies.

2. Report fraud to regulators. National, federal and state regulatory agencies and self-regulatory organizations for investment products and professionals may be able to help. You might benefit from reporting the investment fraud to as many as apply.

It might also be helpful to file a report with the Federal Trade Commission (FTC) or call 877-382-4357. Lodging a complaint submits the fraud to the Consumer Sentinel database, which is used by law enforcement as they attempt to stop ongoing fraud and track these crimes. Please note that this process won’t initiate a criminal investigation of your case.

3. Report the fraud to law enforcement. Reporting the investment fraud to law enforcement is important to begin the recovery process, enable agencies to investigate responsible parties and prevent further damage to other individuals.

  • Federal Law Enforcement: Contact your local FBI field office or submit an online tip. You can also file a complaint through the FBI’s Internet Crime Complaint Center.
  • Local Law Enforcement: Contact any local law enforcement office to file a police report.
  • District Attorney: Contact your local district attorney's office.
  • Attorney General: Contact your state's attorney general's consumer protection and prosecution units to report the fraud.

4. Know your rights. Federal and, in some cases, state laws give rights to victims of crime. Learn about your rights to better protect yourself. Start with your nearest U.S. attorney’s office to learn more about crime victim rights and resources available to you. Also check with your state attorney general.

NASAA publishes a helpful “Investor Bill of Rights.” And the VictimConnect Resource Center is a referral helpline where crime victims can learn about their rights and options confidentially and compassionately.

5. Consider your options. It can be difficult to recover assets lost to investment fraud, particularly if the fraud was perpetrated by criminals from outside the U.S. Depending upon the scenario, there might be legitimate avenues to pursue that could help you recoup some of your lost assets through a civil lawsuit, arbitration or mediation. Attorneys with experience working on financial fraud cases might be able to counsel you on which remedies are available, depending on your circumstances.

6. Seek support. Scams can have both a financial and an emotional impact. Consider whether you need professional assistance with your post-fraud financial picture. If you’re experiencing guilt, embarrassment, shame or similar painful emotions as a result of the fraud, seek additional support. In addition to trusted family or friends, consider contacting a professional or joining a support group such as the following:

  • Give an Hour, Peer Support Program: Free, monthly virtual programs led by mental health counselors for both victims and family members.
  • FightCybercrime, Romance Scam Recovery Group: Free, 10-week virtual programs led by trained counselors for individuals affected by romance and relationship scams.
  • AARP Fraud Watch Network Helpline: A helpline, as well as a free discussion group, staffed by trained fraud specialists and volunteers.

If you’ve been a victim of investment fraud, you’re more likely to be retargeted, perhaps for a different type of scam. Be on your guard. Learn more about how to avoid fraud and strategies to protect yourself.