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Victim of Fraud – What to Do

Last year, a dear friend of mine became a victim of fraud. She came across an investment opportunity with a small business promising great returns for initial investors. She wired $100,000, only to find weeks later that the company didn’t exist. When sharing this story with me, she was unable to find any trace of the business online. She felt ashamed and naive.

Through my decade of experience in financial planning and training like AARP’s Banksafe program, I know how common and convincing these scams can be, and they only continue to evolve over time. Here are the actions I suggested my friend take to, at best, recoup her investment and, at a minimum, protect herself from further harm.



Be kind to yourself.

Although you may feel frustrated and embarrassed, it’s important to remember that you are not alone. Many intelligent, capable people have found themselves a victim of fraud. Please be kind to yourself during this difficult time.

Contact your bank to report the fraud.

The first crucial step is to reach out to your bank or financial institution to report the fraudulent activity. While it may be too late to reverse the transaction, they can provide guidance and assistance. They may also have coverage or resources available to help in such situations. Additionally, they can liaise with the wire transfer company that was used, which could aid in the investigation.

File a report with law enforcement.

To ensure that the incident is properly documented and investigated, it’s important to file a report with the appropriate authorities. Reach out to local law enforcement to report the fraud. Additionally, file a report with the Federal Trade Commission (FTC) and with the Internet Crime Complaint Center (IC3). The involvement of these agencies can increase the chances of recovering your funds and apprehending the fraudsters.



Check your homeowner’s policy for recovery provisions.

Review your homeowner’s policy to determine if it includes a recovery provision for wire fraud. Some policies now incorporate a cyber element that can provide coverage for such incidents. Contact your insurance provider to explore the possibilities of recovering some or all of your lost funds through this avenue.

Freeze your credit.

Take steps to protect yourself from further exploitation by freezing your credit. This precautionary measure restricts unauthorized individuals from accessing or opening new accounts in your name.

Monitor transactions.

Additionally, diligently monitor your banking transactions. Most credit card companies offer notifications with each transaction. Review your statements at least once a week to identify any suspicious activity promptly.

Change your passwords.

As part of safeguarding your financial and online accounts, change all your passwords and ensure they are strong and unique for each account. Avoid using common information that you may have shared with the fraudsters (birthdates, addresses, middle names). Consider using a password manager like 1Password to generate and securely store complex passwords in one place, minimizing the risk of being compromised.



Explore resources provided by AARP.

AARP offers valuable resources to assist victims of scams and frauds. Take advantage of their services, such as their scam reporting hotline, the watchdog list of the latest scams, and their informative podcasts. These resources can help you stay informed about the latest trends in fraudulent activities and empower you to protect yourself better.

Add a trusted contact to your investment accounts.

To provide an additional layer of security and oversight, consider adding a trusted contact to your investment accounts if you haven’t already done so. This person can act as a safeguard and be notified in case of suspicious activities or attempts to make unauthorized changes to your accounts.


In Closing

Becoming a victim of fraud is a distressing experience, but it’s important to take action promptly to mitigate further damage and increase the chances of recovery. By following the steps outlined here, you can begin the process of reporting the fraud, protecting your financial accounts, and accessing resources that can support you throughout this challenging journey. Remember, you are not alone, and with the right support and actions, you can regain control and prevent future incidents of financial exploitation.

To learn more about financial exploitation and what you can do to keep yourself safe, visit our blog from earlier this year, Preventing Financial Exploitation. If you want to talk about your financial situation and how you can best protect yourself from fraudsters, I welcome the conversation.