Case Explained: How and Where to Report Fraud and Scams – Legal Perspective

Why it’s important to report scams

1. There’s a slight chance you can recover what’s been stolen. While it is unlikely you’ll get your money back — as with other kinds of theft, such as a home robbery — there is at least a chance that you will. Some states are even considering laws to help victims recover lost funds, points out Stokes, who says Minnesota recently passed the first law of that kind in the country, with the support of AARP. When it takes effect next year, the law will establish a Consumer Fraud Restitution Fund that will collect up to $5 million annually from civil penalties paid by companies and individuals found guilty of consumer fraud. The state will use those funds to compensate victims when direct restitution from scammers isn’t possible.

“When you report fraud to law enforcement, it creates a record,” Stokes says. “And when you have a record of it, you can prove you were a victim in case there’s an opportunity for restitution down the road.”

2. You’re helping the authorities find and prosecute the criminals. For many victims, the possibility of justice can be just as compelling as the prospect of restitution, according to Bartolacci, who notes that every report of fraud by a victim is a valuable piece of data that can help law enforcement catch criminals and hold them accountable.

“When people are victimized, what looks like fragmented or isolated incidents oftentimes are coordinated efforts,” he explains. “ [Scammers] are very sophisticated. They have major business structures and hierarchies. So when you report an incident to law enforcement, it helps them start connecting the dots. What was a $5,000 crime to you might actually be a multibillion-dollar crime affecting victims all over the world.”

3. Sharing your story can bring you support and relief. There are psychological benefits to reporting — if not to law enforcement, then to other entities that provide resources or reassurance, like the AARP Fraud Watch Network Helpline, where trained fraud-fighting volunteers will listen to your story without judgment, and offer guidance on next steps, including the best place to report the fraud. AARP also has free online fraud victim support groups. “The emotional impact [after experiencing a scam] is so profound that people often need further support,” notes Stokes.

Where to report scams

It’s no surprise that people are confused about which authorities should be notified: There’s no single clearinghouse for fraud and scam reporting in the United States. Instead, there are multiple, disparate parties, each with different interests and obligations. Here’s where to start:

Your bank: Notify your bank immediately, advises Bartolacci, who notes that financial institutions can freeze your accounts to prevent additional payments to or withdrawals by scammers. Banks might also help facilitate contact with law enforcement and can alert other financial institutions in case other potential victims need to be identified.

Local law enforcement: Whether you reach out with or without your bank’s assistance, local law enforcement should be your first and primary point of contact, according to Det. Matthew Hogan of the Connecticut State Police, who is a fraud investigator and serves on the U.S. Secret Service’s Connecticut Financial Crimes Task Force.