By Randy Hutchinson
President of the BBB
Reprinted from The Jackson Sun
I didn’t think this was a prevalent enough scam to write about until the FBI issued its third alert on it in the past two years. The most recent alert is titled “Fictitious Law Firms Targeting Cryptocurrency Scam Victims Combine Multiple Exploitation Tactics While Offering to Recover Funds.”
The first alert in 2023 said consumers reported losing $2.5 billion in cryptocurrency investment scams in 2022. Only a fraction of scams are reported, so the actual losses are much higher. The law firm scam seeks to exploit victims by promising to help them recover lost funds. Between February 2023 and February 2024, cryptocurrency fraud victims reported losing over $9.9 million to “recovery scams” (again, the actual losses would be much higher).
The phony lawyers contact victims on social media and other messaging platforms and claim they’re authorized by the FBI or another government agency to help people recover money they lost. Or victims looking for help may find what appears to be a legitimate website that is really owned by the crooks. Victims are ultimately required to pay a fee to recover their funds, at which point the crooks disappear or invent a reason the victim has to pay more fees – and then they disappear.
In some cases, the phony lawyers may be the people who scammed the victim in the first place. As such, they’ll offer a lot of details about what happened to make their offer to help sound more legitimate.
The crooks target vulnerable populations, particularly the elderly, and exploit victims’ emotional state and financial need to get their money back. Impersonating lawyers gives victims a sense of safety and security, while damaging the reputation of the actual lawyers being impersonated.
I found this report on a Reddit thread:
“My husband was just recently scammed. He lost about $1500 and absolutely refused to listen to us until it was too late. So what did he do? He turned around and got scammed again. He saw an ad on Facebook for lawyers that supposedly could recover his fees. They were using the name of SEQ…. law firm in Miami, under the name of W….. ….. chols.”
The FBI and BBB offer these tips to protect yourself from this scam:
- Use a “Zero Trust” model in these circumstances, which assumes no one should be trusted by default and every request should be verified.
- Be cautious of law firms contacting you unexpectedly, especially if you haven’t reported the crime to any law enforcement or civil protection agencies.
- Request video verification or documentation or a photo of their law license. If this cannot be readily provided, assume they aren’t legitimate.
- Request verification of employment for anyone claiming to work for the US Government or law enforcement. You can call your local office for the associated government entity and request to verify the identity of the individual you’re communicating with.
- Keep records, including recordings of video chats of interactions.
- Require notarized proofs of identity from the supposed lawyers before continuing any further communications and transactions.
The FBI requests victims of fraudulent law firm scams, or those who suspect they may have been victimized, to report the suspicious activity to their local FBI field office and the FBI’s Internet Crime Compliant Center (IC3) at www.ic3.gov.