As Belgium’s Financial Services and Markets Authority (FSMA) remains vigilant against fraud, it issued a warning on Monday against the rising ‘recovery room’ fraud targeting the citizens in the country.
Recovery rooms are a well-known scamming tactic as fraudsters approach investment fraud victims with offers of compensation. These fraudsters often disguise as representatives of law firms or accountants, and even police services or financial supervisors.
The Belgian regulator pointed out that one of the key traits of these fraudsters is that they ask for charges for their services upfront and asked people not to fall for such scams.
“Victims of investment fraud must pay the fee in advance. This is a clear indication that it is a recovery room,” the FSMA stressed.
“The payment is demanded, for example, allegedly to cover certain administrative or legal costs or to pay taxes. These are purely fictitious costs, however. Once the fraudsters have received the fees, they disappear without a trace, and it is almost impossible to recover the amounts paid.”
Already Known Perpetrators
Additionally, the market watchdog named six companies that are fraudulently approaching investment fraud victims, then pulling out of such recovery scams.
The companies are Payback Ltd, a clone firm operating from www.payback-ltd.com; Funds Recovery Ltd, another clone with website www.funds-recovery.com; Lewis & Wright Advocates (www.lewiswrightadvocates.com); Main Trading Center / MTC Institute; LCT Capital, LLC (cloned firm) (www.lctcapitalllc.com); and South Texas Securities, Co. (cloned firm) (www.southtexassecuritiesco.com).
Meanwhile, the FSMA warned investors against other forms of fraud as well. Last week, the regulator flagged trading and training products related to forex, contract for differences (CFDs), and cryptocurrencies that are promoting themselves using a multi-level marketing structure.