Scavenger fraud scams – how to avoid and what to do if you are a victim

In a previous article, I wrote about the Boiler room fraud. As a brief re-cap, there are at least 3 people involved to dupe you out of your savings. A ‘fronter’, calls and makes the initial pitch. A ‘closer’, completes the deal, and a ‘verifier’, apparently checks that you are happy with the deal, and

Home » David Rosen » Scavenger fraud scams – how to avoid and what to do if you are a victim

In a previous article, I wrote about the Boiler room fraud. As a brief re-cap, there are at least 3 people involved to dupe you out of your savings. A ‘fronter’, calls and makes the initial pitch. A ‘closer’, completes the deal, and a ‘verifier’, apparently checks that you are happy with the deal, and explains cool-off periods, etc…The purpose of a boiler room fraud is to place pressure on you within the course of a very short time, to build upon your excitement and enthusiasm, for you to be hoodwinked into buying for example, shares in a company at a lower price, or an investment into a property, or chain of properties.

Of course, THERE IS NO INVESTMENT. THERE IS NO DEAL. IT IS ALL A FRAUD, to catch you under pressure, and in the spur of the moment, when you are at your weakest and most volatile, can get up in the excitement of making a quick profit.

So…what is a scavenger or revenge scheme?

This is a ‘double whammy’; a scam, a swindle, a cheat, a deception.

Just when you think you could not be ‘done’ another time, you may be at your most trusting in seeking revenge and to ‘get’ the people who have scammed you.

The sheer chutzpah of this scam, is that the swindlers know you have been scammed because usually they are the very people who scammed you in the first place…

They know you are weary, and feed you just the sort of pitch you want to be hearing: (i.e they became involved with the company which was set up for others who have been the victim of fraud. They speak of the financial pain it caused themselves and their families; That they wish there was an organisation like this to get back what they had lost at the time; that they have the best technology and resources to track down funds; they have the best expertise, ex-Police of course).

People get totally drawn in because they have someone they think understands them; They have someone who can empathise with their woes, and before you know it, you have paid a larger sum of money up front. You are told someone will call you back or write or email you. You may get an email or a letter; You may not. If you do, it is to provide you with re-assurance, rather than to actually give you truthful information.

Your money disappears. The supposed do-gooders disappear. All is lost. You have been scammed twice.

What to do if you believe you have been the victim of fraud: The 1st time, when it was a boiler room fraud; The 2nd time after a scavenger or revenge scheme?

The answer is the same.

 Tips not to be scammed a 2nd time:

  • Trust few people;
  • Remember you are vulnerable;
  • Consider how someone got your contact details. Did they say they got your details from the Police? Or Victim Support? Ask for a crime reference number. Did they stall for an answer? Did you report it to the Police? No crime reference without reporting it in the first instance;
  • Don’t part with your money without good reason;
  • Trawl the Internet for any bad or adverse reports. If unsure, perhaps contact your local Trading Standards office to see whether any adverse reports have been made or received. Just remember that if there are only good report, it is probably it true. Scammers are so experienced that they will create other sub-websites to ensure apparent independence of go of reporting on such a company;
  • If it is too good to be true, then it probably is untrue;
  • If you contact the Police quickly enough, they may be able to trace funds, or calls;
  • However stupid or embarrassed you feel about such a scam, do not hold back to contact the Police.

Some Police forces have the capacity to deal with such matters. Other do not. The City of London Police for example, have a specialist team who will deal swiftly with a boiler room fraud, or other type of economic fraud. There is of course Action Fraud, which can be accessed through the Internet, or a hotline number directly, which deals with national and Internet crime on 0300 123 2040 or www.actionfraud.police.uk/  The difficulty with other police forces is that if they may not move as quickly as you would wish if they lack the expertise or resources to handle such a crime.

From a civil perspective?

  • Contact your Bank or credit card company immediately and try and put a hold on your funds;
  • Change your account details to stop any further money being taken from your account;
  • Monitor your Bank statements for at least 6 months to ensure no further damage;
  • Sign up to a credit reference agency who will email you if there is a change to your credit history. Some scammers will further try and use your information to obtain further credit in your name;
  • Contact a competent lawyer experienced in the fields of criminal and civil fraud. An Injunction may be necessary if you move quick enough. A trace can be placed on e transfer of funds and you can in certain instances compel a Bank to provide you with such further information under a Norwich Pharmacal Order.
  • Take a cynical approach. Scammers of this nature are expert in the art of deception, and will be hard to trace.
David Rosen – Head of litigation and specialist in fraud law

Professor Rosen is a Solicitor-Advcocate, Partner and head of Litigation at Darlingtons. He is a working member of the Fraud Advisory Panel, a Certified Fraud Examiner, a visiting associate Professor of Law, and a member of the Society of Legal Scholars.

David Rosen • Fraud

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