The CFPB recently issued an advisory for older consumers about asset recovery companies that target older consumers who are past victims of fraud, such as bogus timeshare investments and in-home business opportunities.
The advisory describes a typical asset recovery scam as one in which the asset recovery company contacts a defrauded older consumer claiming it can get the consumer’s money back for an upfront fee of several hundred to thousands of dollars. Once the consumer pays the upfront fee, the company fails to perform any service that the consumer could not have done on his or her own.
The advisory provides warning signs to help consumers avoid becoming a victim of an asset recovery scam, such as requests for upfront fees to recover money and claims of insider information and connections (when the company will do no more than submit complaints to free consumer complaint resources.) It also provides advice about steps a consumer who believes he or she has been a victim of fraud can take, such as alerting the consumer’s bank or credit card company immediately, reporting the scam to the consumer’s local law enforcement office, and submitting a complaint to the FTC.
The CFPB indicated that it issued the advisory because its review of complaints submitted by consumers indicated that older consumer were being targeted by asset recovery scams. Unlike the CFPB’s use of complaint data to publish misleading statistics, the advisory can play a helpful role in protecting older consumers from financial exploitation.