How to Recognize—and Avoid—Beneficiary Scams

United States By Christy Lowry Dec 4, 2023

Beneficiary scams, also known as inheritance scams or next-of-kin scams, can quickly devastate unsuspecting victims. In 2022, the FTC received over 2,000 reports of foreign money and inheritance scams.[1] Knowing the signs of a beneficiary scam can help you avoid becoming a fraudster’s next victim. Learn more about beneficiary scams so you can protect yourself from fraud.

How do inheritance scams work?

A beneficiary scam is when a fraudster tricks a victim into believing that a distant relative died and left their estate to the victim. The estate is often worth millions of dollars. The scammer will send the victim a convincing email or letter posing as a law firm, saying that the victim was left as the beneficiary of the estate and that if they want to claim the inheritance, they’ll have to pay the law firm an upfront fee to cover the legal fees or taxes. Once the victim sends money to the scammer to receive their inheritance, the fraudster vanishes with the victim’s money.

In some beneficiary scams, the fraudster will ask the target to disclose their personal information, like their bank account information or Social Security number, in order to steal the victim’s money and identity.

A similar form of beneficiary scam is a life insurance scam. In this scam, the fraudster will find a victim and tell them that they’re the beneficiary of a recently deceased person’s life insurance policy. They’ll tell the victim that they need to pay a fee in order to receive the life insurance money and will disappear once the money is paid.

Another type of inheritance scam is known as a romance inheritance scam. In this type of beneficiary scam, a fraudster will build a romantic relationship with their victim, often without ever meeting them in real life. The fraudster will then tell the victim that they are the heir to an inheritance but don’t have the money to send their lawyers. They’ll ask the victim to help them pay the fees needed to get their inheritance. The victim, who believes that they have a genuine future with the fraudster, will provide the money, only for the fraudster to disappear with their money and never be heard from again.

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How to avoid becoming a victim of a beneficiary scam

If you think a fraudster is contacting you, look for these signs:

  • There are typos and/or grammatical errors in the email or letter. A real law firm maintains professionalism by avoiding these types of errors.
  • The scammer uses a public domain email address. Law firms have their own email addresses. If someone is contacting you from a Gmail email address, they’re likely not a lawyer.
  • You can’t find any information about the law firm or lawyer online. If you can’t find any information about the alleged lawyer online, they’re probably a fraudster.
  • The deceased person is someone you’ve never heard of. While the idea of inheriting a large sum of money from someone sounds like a dream come true, it’s important to recognize red flags. Why would someone you’ve never heard of leave you money?
  • The “lawyer” is asking for your personal information. When someone is leaving their estate to beneficiaries, they should have already provided the information that is necessary to receive their inheritance when they pass away.
  • The “lawyer” asks for money upfront. When you receive an inheritance, money is deducted from the estate to pay the legal fees. You normally don’t have to pay out-of-pocket to get your inheritance money.

What to do if a fraudster contacts you with an inheritance scam

If you’re contacted with a beneficiary scam, here’s what you should do:

  • Report it to the FTC. You can report the scam at ftc.gov.
  • Delete the email or throw out the letter. Never respond to a scammer.
  • Never send money or information to an unknown person. Money isn’t always recoverable. Protect your cash and avoid identity fraud—don’t send anything to a scammer.

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