Recovery Room Scams
Recovery room scams typically involve cold-calls made to victims of a failed investment scheme, or owners of timeshare memberships. The callers would claim to offer assistance in obtaining compensation or recovery of monies on behalf of the victims, in exchange for some fees. Since January 2018, the Police have received at least 16 reports of such scams and victims have lost more than $96000.
After paying the fees, the victims did not get their monies as promised, and instead ended up incurring more losses in the form of fees they paid for the purported recovery process.
How Do You Spot a Recovery Room Operation?
a Recovery offers are often unsolicited and made via phone calls.
The scammers generally introduce themselves as recovery professionals, who are able to assist victims to recover their investment losses or the value of their existing timeshare memberships. They will often request to meet victims in person, and reveal little information over the phone.
b The office appears fairly empty.
The recovery firm will appear to be relatively empty or newly set-up. Such firms do not have proper operations and usually rent the office premises for a short period of time, solely for the purpose of meeting the victims. Other red flags would include firms which are either newly incorporated or not registered with ACRA.
c Victims will be asked to make upfront payments to begin the process of recovering failed investments or the value of their existing timeshare memberships.
These payments are variably termed as legal fees, administrative fees, service fees or other kind of fees. Some of the common recovery processes include helping victims to file lawsuits or issue letters of demand to the failed investment company or timeshare companies, provide debt collection services or sell the initial investment/timeshare membership. Subsequently, the recovery firm may request for additional payments, to further facilitate the recovery process.
How to Deal with Such Calls?
Members of the public are advised to be vigilant when receiving unsolicited calls from purported recovery firms, and should adopt the following crime prevention measures:
Be wary when an unknown person calls you regarding your investments or timeshare memberships, especially when you did not approach anyone to recover your investment monies;
Ignore such calls. Do not divulge your personal particulars or information on your investments to the callers;
Do not follow the instruction or invitation of the caller to call him back or to meet him in person;
Always check on the credibility and identity of the caller before making any financial commitments;
Conduct background checks on the company before engaging their services. For example, when was the company incorporated? Are there complaints against the company on the Internet? Does the company have a proven track record of delivering what they represented?
Request for a copy of the documentation on their proposals, representations, contracts and agreements. Be wary if the company is reluctant to provide you with such documentation and only provides verbal promises;
Exercise extra caution especially if you are asked to make upfront payments with the promise of assisting you to recover your monies.
Source: Singapore Police Force