Dividend Recovery / Advance Fee Scams via Bank Transfer
How fraudsters posing as fund recovery agents ask investors to send an upfront bank transfer to 'release' dividends or losses from a collapsed company — a fee that is itself the entire scam.
Part of: Dividend Recovery / Advance Fee Scam
Last reviewed: 14 July 2026
Investors who have genuinely lost money in a collapsed company, unpaid dividend, or failed investment are unusually receptive targets for recovery scams, because the loss is real even if the promised recovery is not. Fraudsters posing as lawyers, liquidators, or 'asset recovery specialists' contact these investors, often claiming to have located unclaimed dividends or a settlement fund tied to the original company, and request a bank transfer to cover legal fees, taxes, or processing costs before the recovered funds can supposedly be released.
Bank transfers are the preferred payment method in this scam because they can move meaningful sums quickly and, once received by the scammer's account, are extremely difficult to claw back, particularly when the receiving account is overseas or has already been emptied by the time the fraud is discovered.
How this scam works on bank transfer
The victim receives an unsolicited call, email, or letter referencing the specific company or investment they previously lost money in, lending the approach credibility since real details about the collapsed investment are cited. The caller claims to represent a recovery firm, liquidator, or legal team that has identified funds owed to the victim, sometimes an amount matching or exceeding the original loss.
To release these funds, the victim is told a fee must be paid upfront to cover legal costs, a tax or compliance charge, or an 'insurance bond' required before disbursement, and is instructed to send this fee via bank transfer to a specified account. Once the transfer is sent, the recovery firm either goes silent, requests a second and then a third fee for newly invented complications, or provides fabricated documents claiming the funds are 'in process.'
No recovery ever actually materializes, because the entire premise — that funds are waiting to be released — was fabricated to justify the advance fee request in the first place.
Common red flags
- You are contacted unexpectedly by someone claiming they can recover money from an investment or dividend you previously lost
- You are asked to send a bank transfer to cover legal, tax, or 'release' fees before any funds are returned to you
- The caller references real details about your original loss to build credibility
- A second or third fee is requested after the first, citing new complications
- The firm cannot provide verifiable registration with a securities regulator or bar association
- You are pressured to act quickly or told the recovery window will close soon
How to protect yourself
- Treat any unsolicited recovery offer tied to a past investment loss with serious skepticism, regardless of how convincing the details are
- Never send a bank transfer to release funds that are supposedly already yours — legitimate recoveries do not require advance fees deducted this way
- Verify any recovery firm's registration independently with your securities regulator or state bar association before engaging
- Contact the original company's liquidator or administrator directly, using contact details you find independently, not ones the caller provides
- Discuss any recovery offer with a trusted family member or independent financial adviser before sending any payment
- Report the contact to your securities regulator even if you do not send money, since it helps track the scheme
How to report it
- Report to your state or national securities regulator (NASAA in the US, the FCA in the UK, ASIC in Australia)
- File a complaint with the SEC at sec.gov/tcr or your local equivalent
- Contact your bank immediately if you have sent a transfer, to ask about a recall request
- Report to your national fraud reporting service (e.g., Action Fraud in the UK, IC3 in the US)
Frequently asked questions
Is it normal for a real recovery process to require an upfront fee?
Legitimate legal or liquidation processes sometimes involve fees, but these are typically deducted from the recovered amount itself or billed transparently through a verifiable, licensed firm — not demanded as a separate advance bank transfer from someone who contacted you out of the blue.
How did the scammer know details about my original investment loss?
Lists of investors in collapsed companies or funds sometimes circulate among fraudsters, whether through data breaches, public liquidation records, or resale between scam operations, which is why they can reference real details to sound credible.
Can I get my bank transfer back after sending it to a recovery scammer?
Recovery may depend on the payment method and timing — contact your bank immediately and ask about a recall request, since a transfer that has not yet been withdrawn by the recipient may sometimes be stopped. Once funds are withdrawn, especially from an overseas account, recovery becomes very unlikely.
Should I keep paying if the recovery firm asks for a second fee?
No. A legitimate recovery process does not typically require repeated new fees for 'newly discovered' complications. Requests for additional payments after the first are a strong indicator the entire process is fraudulent, and continuing to pay is unlikely to produce the promised recovery.