NASAA Alert: Third-Party Asset Recovery Firms

The North American Securities Administrators Association (NASAA) is warning investors about third-party asset recovery schemes. The NASAA advisory urges investors to use caution if approached by companies promising to help recover their money lost in a fraudulent investment scheme.

Typically, third-party asset recovery companies target investors who have lost capital to fraudulent investment schemes and offer them services to recover their funds or to bring the perpetrator to justice—all for a fee.

Once hired, the company may send demand letters to the perpetrators of the initial investment scheme, and then file a complaint with the pertinent securities regulator on behalf of the investor. The problem which arises is that the investor likely has no chance of recourse for a variety of reasons: the initial investment scheme has likely taken place a long time ago and/or the perpetrator has already been subject to regulatory or criminal action, or has filed for bankruptcy. Often, these complaints are based on information that is too old for legal action.

Like recovery room schemes, third-party asset recovery firms re-victimize the already defrauded investor by cold calling them and pressuring them into using their services. The BCSC and other Canadian regulators have issued warnings about recovery room schemes in the past, the most recent being an alert regarding G.W. Trust and Transfer. For more information on third-party asset recovery firms, read NASAA’s advisory. For more information on recovery rooms, visit BCSC InvestRight’s Common Scams webpage.

If you have any questions regarding third-party asset recovery firms, or have any concerns regarding solicitations for investment services, please contact BCSC Inquiries at 604-899-6854, toll free at 1-800-373-6393, or by email at [email protected]. You can also file a complaint anonymously by using our Report a Scam form.