Unfortunately, more people than ever are realizing that they’ve been victims of a financial scam or crime. If you’re one of them, it’s essential to be aware of the steps you should take after discovering the fraud. While you may not be able to prevent yourself from falling victim to the scam, taking these steps can safeguard your current assets and make it more likely that you’ll be able to take legal action against the person who committed the crime.
Don’t Pay Any More Money
This step probably sounds like obvious advice. However, some financial frauds, like recovery scams, target victims of other financial scams. They pledge to recover the stolen money if the victim pays an amount of money to them upfront.
Often, people who are embarrassed at having fallen victim to financial crime choose to believe in these claims so that they won’t have to report the crime to the authorities. Furthermore, the criminals of these recovery frauds commonly pretend to be people in positions of authority, such as government officials, recovery companies, lawyers, and so on, allowing victims to place further faith in their claims.
Figure Out Which Agency To Report To
If the scam you have fallen victim to violates federal law, you will have to report the crime to federal authorities. However, figuring out which agency deals with which crime can be challenging. Supposing you have been the victim of a Ponzi scheme, you will need to report to the Securities and Exchange Commission (SEC). This scheme is a little tricky to determine so you may need to contact an experienced Ponzi scheme lawyer. It’s important to turn to the appropriate department for assistance and get a high recovery chance. However, victims of investment fraud may need to report it to another agency.
There are numerous online resources available that can guide you to the right place to report the crime you have been subject to. If you still cannot figure out who the relevant authority is, you can instead try to contact local authorities like the state attorney general’s office for help.
Report The Scam
Once you’ve figured out who to report to, it’s important to take the next step and actually make the report. One report estimated that only 14% of all scam victims reported the crime, often due to embarrassment or concern that their report would go nowhere. However, reporting is essential – it helps authorities keep a better track of who and how many people have been affected by a scam.
Additionally, larger agencies like the FBI often devote significant resources to tracking down the perpetrators of those scams, and the information you provide them can help them make headway toward finding the perpetrator.
Protect Your Accounts
Once you’ve reported the crime, you also need to make sure that there’s no chance the scamsters can continue to access and drain your finances. This involves protecting your accounts as soon as possible.
If the financial fraud involves the use of your credit card, you will also need to contact the card issuer immediately and make a fraud report. You should also contact a credit reporting company like Transunion and place a fraud alert on your credit file to prevent the scam from affecting your long-term credit.
Other steps you can take to protect your finances include:
- Requesting a free security freeze. This makes it harder for someone else to open an account in your name.
- Closing any bank accounts the criminal has access to. This is especially important if you provided them with your account or routing numbers.
- Placing a fraud alert and security freeze on your social security number.
- Changing all log-in details and passwords for sensitive accounts, especially if you logged into a fraudulent website using details you use on other accounts.
- Reporting any identity theft that occurs to the local and federal authorities.
Consider Steps to Financial Recovery
While getting your money back may seem hopeless, there are actually some steps you can take to try to recover your finances. These include:
- Checking your homeowner’s policy to see if your insurance covers losses via fraud or identity theft.
- Consulting a tax professional to see how your taxes are affected.
- Consulting a financial advisor on how to rebuild your savings, especially if your retirement savings were affected.
- Consulting a lawyer to see if there are any legal steps you can take. This is especially relevant once the perpetrator has been caught, identified, and charged.
Focus on Emotional Recovery
Being the victim of a financial scam is a challenging realization. Many victims are plagued by guilt and self-doubt over falling for the scam. Take the time to focus on the emotional harm the crime has caused to you, and consider seeing a therapist if necessary.
Being the victim of a financial scam can be a trying time for anyone. However, if that is the position you find yourself in, it’s essential you take as many steps to mitigate the situation as possible. While quick action may not result in the immediate recovery of your lost assets, it will be able to reduce the risk of further losses. Additionally, the steps you take following your realization of the crime will provide a base you can use in any legal battle that may result.