Refund, Settlement, and Recovery Scams: Never Pay to Get Your Money

When a company settles a case or a government agency wins one, thousands or even millions of people may be owed money. Scammers know this. They send texts, emails, and calls saying you are owed a refund, a settlement payment, or money back from an old scam, and you just need to “verify” your account or pay a small fee to release it.

The rule that protects you is short enough to say out loud to a parent: you never have to pay to get your own money.

This guide explains how real refunds work, the warning signs of a fake one, and the “recovery” scam that targets people who have already lost money once. It was checked against Federal Trade Commission (FTC) consumer advice on October 7, 2026.

Three kinds of refund scam

• The fake settlement. A message says you are part of a class action or government settlement against a well-known company. To claim, you must pay a processing fee or give your bank login.
• The fake overpayment. A caller says you are owed a refund for a subscription or service, often a computer security plan. They “accidentally” send too much and ask you to send the difference back by gift card or wire. No money was ever sent; they only moved numbers on a screen while connected to your computer.
• The recovery scam. Someone contacts a person who already lost money to a scam. They claim to be a lawyer, a government agency, or a recovery service that can get the money back for a fee. The FTC says these scammers often buy lists of past victims.

How real refunds work

• Some are automatic. The money arrives by check, by an electronic payment such as PayPal, or as a credit to the account you already have, without you doing anything.
• Some need a claim form. Class action settlements usually have an official claim website run by a court-appointed administrator. Filing is free, and the notice names the court case.
• None charge a fee. The FTC says government agencies and legitimate organizations will never ask for money to help you get a refund, and will not ask for your financial account numbers to send one.
• Nobody guarantees recovery. A real agency or lawyer will not promise you will get lost money back.

The FTC lists every one of its own refund programs, with the official claims administrator and phone number for each, at ftc.gov/refunds. If a message mentions an FTC refund that isn’t on that page, treat it as fake.

Red flags

• A fee, “tax,” “retainer,” or “processing charge” before you can receive the money.
• Payment requested by gift card, wire transfer, cryptocurrency, a payment app, or cash.
• A request for your bank login, card number, or Social Security number to “verify” you or “deposit” the refund.
• A deadline measured in hours, or a threat that the money will be lost.
• A caller who says they are from the FTC, another agency, or a law firm and offers to handle your claim.
• A request to let them connect to your computer so they can “process” the refund.
• A promise to recover money you lost to an earlier scam.

How to check a refund or settlement notice

1. Don’t use anything in the message. Skip the link, the QR code, and the phone number.
2. Find the official source yourself. For an FTC refund, check ftc.gov/refunds. For a class action, look up the case name and find the settlement website through the court, the company’s own site, or a reputable news report about the settlement.
3. Compare. Does the official page say payments are automatic? Does it say claims are filed only on its website? If the message asked you to do something the official page doesn’t mention, it’s a scam.
4. Never pay, never share a password. If any step asks for money or a login, stop.

If you lost money once, expect a second call

People who have already been scammed are the main target of recovery scams. The caller may know details about your loss, which makes them sound official. They may claim to be from the FTC, the FBI, a court, or a “fund recovery” company. Some even say they are investigating the original scammer.

Real investigators do not charge you. The FTC says it does not call people to collect fees for refunds. If someone says they can get your money back for a fee, hang up and report it. If you want to know whether a real case exists, contact the agency yourself through its official website.

A family conversation worth having

Refund scams often target older adults with official-sounding calls, and recovery scams target anyone who is already embarrassed about an earlier loss. Two sentences cover most of it:

• “Nobody legitimate ever asks you to pay to receive money.”
• “If you ever lose money to a scam, tell me first, before anyone calls offering to get it back.”

The second sentence matters. A parent who feels ashamed of a loss may keep it secret, which is exactly when a recovery scammer calls. See Pass It On: How to Start a Conversation About Scams.

If you already paid or shared details

1. Call your bank or card company right away and ask to reverse the payment. If you paid with a gift card, call the card company. See Gift Cards Are Only for Gifts.
2. Change any password you shared, starting with email and banking, and turn on two-step sign-in.
3. If they connected to your computer, disconnect it from the internet, remove the program they had you install, and change passwords from a different device. See Tech Support Scams.
4. If you shared your Social Security number, go to IdentityTheft.gov for a recovery plan and consider a credit freeze.
5. Report it at ReportFraud.ftc.gov and to your state attorney general.

Checklist

• Everyone in the family knows: never pay to get your own money.
• FTC refunds are checked only at ftc.gov/refunds.
• Settlement claims are filed only on the official settlement website, found independently.
• No one gets remote access to a computer to “process” a refund.
• After any scam, the family knows to expect, and ignore, a recovery offer.

FAQ

I really was part of a class action. How do I know which website is real?

The legitimate notice names the court and the case. Look up that case through the court or the company’s own announcement and find the claim site from there. Real claim sites don’t charge a fee to file.

The caller knew how much I lost in an earlier scam. Doesn’t that prove they’re real?

No. Scammers buy and share lists of people who have been scammed before, including details of the loss. Knowing your story is not proof of who they are.

Can a lawyer charge me to recover money?

A real lawyer may charge for legal work, but will not cold-call you, guarantee results, or ask for payment by gift card, wire, or crypto. If you want legal help, find a lawyer yourself, for example through your state bar association.

Do I have to pay taxes before I can receive a settlement?

No. Any taxes owed on money you receive are handled with your tax return, not paid to the person sending the money.

Sources

• Federal Trade Commission, “Refund and Recovery Scams,” consumer.ftc.gov, accessed October 7, 2026.
• Federal Trade Commission, “Refund Programs,” ftc.gov/enforcement/refunds, accessed October 7, 2026.
• Federal Trade Commission, “How To Spot, Avoid, and Report Tech Support Scams,” consumer.ftc.gov, accessed October 7, 2026.

This is general information, not legal or financial advice. If you lost money, contact your bank or payment provider right away and report the scam at ReportFraud.ftc.gov.