When Trust Gets Twisted
It started with what felt like a kind offer from someone you trusted. Your cousin, who always talked big about money and investments, offered to handle your $50,000 settlement. He said he’d invest it for you—help you grow it, make your future secure. You believed him. After all, he’s family. But now he’s ghosting you. No texts, no calls, and no sign of your money. So…what now? Can you sue?
First, Take A Deep Breath
The sinking feeling in your stomach is real. But before spiraling, it’s important to know that you’re not the first person this has happened to. Financial betrayal from family members is far more common than you might think. The good news is that you do have options—both legal and financial.
Was It An Investment Or A Loan?
One of the most important details in this situation is how the arrangement was framed. Did your family member promise to invest your money on your behalf? Or was it more like a personal loan that they promised to pay back with interest? This distinction matters, especially if you take legal action. Investment fraud and breach of contract are treated differently in court, so getting clear on how your family member described the deal is the first step in building your case.
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Signs You’ve Been Scammed
It is hard to believe that the one you love has likely taken advantage of you. But if your relative is no longer in sight, won't explain to you how he used your funds, and has stopped providing you with updates, then it is an obvious sign that something is wrong. If weeks or even months have passed and you are still unsure of what became of your money, you need to act quick.
Yes, You Can Sue
You can certainly sue. Based on the circumstances of your case, you can sue for breach of contract, misrepresentation, fraud, or conversion (unlawfully taking or keeping another's property). These are valid legal claims with consequences, and courts consider them seriously—especially when substantial amounts are involved.
Gather Every Piece Of Evidence
Even if there is no written, formal contract, you may still have a solid case. Start collecting all texts, emails, voicemails, or even social media messages where your family member has mentioned the investment. Collect your bank records of the flow of money. If any of your friends or relatives happened to overhear the agreement being discussed, they can be witnesses. The more evidence you collect, the stronger your case will be in court.
Talk To A Lawyer (Like, Now)
A lawyer will guide you as to how to frame your case. Most charge no fee for the first consultation, so even if money is a concern, you can normally get some advice without paying first. A lawyer may even send a formal demand letter to your relative that sometimes scares them into paying you back—especially if they didn't think you would file suit.
Think About Small Claims Court
If the amount involved fits within your state’s small claims court limit—which varies by state and typically ranges from $2,500 to $25,000—you might be able to file a claim yourself, without hiring a lawyer. Small claims court is designed to be accessible to regular people, and the process is relatively straightforward. However, you’ll still need solid evidence and a compelling explanation of what happened.
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What If They Already Spent The Money?
Even if your relative has already spent the money, you can still get it back. If you win a judgment in court, there are some ways of enforcing it. Depending on where you live, the court may allow you to garnish his wages, put a lien on their property, or even freeze their bank accounts. It takes a while, but getting a judgment is the start of getting them to pay.
Filing A Police Report
If you believe that your relative lied to you about facts and never at any time had any real interest in investing the money—or if they promised something they could not legally provide—you can be confronted with criminal fraud. It will start an investigation and show the court that you took the situation seriously by reporting it at the police station. Even though the police are not always quick to act in financial disputes among relatives, possessing a written report can strengthen your civil case.
What The Law Says
The law provides that making an investment offer on someone else's money without a license is illegal, especially where it involves false promises or fraudulent schemes. Investment advisers in most states are compelled to register and be licensed. If your relative was not qualified to deal with other people's money, what they did might not only be immoral—it might be illegal.
Avoiding This In The Future
After you've been through an experience like this, it's hard not to be wary of trusting another person with your money. The best way to prevent this from happening in the future is to never invest through an intermediary who doesn't make you have full transparency. You should always know where your money is going, what the plan is, and how soon you're going to see a return. If someone evades these questions or gets hostile, it's time to walk away.
Protect Yourself—Even from Loved Ones
It's hard to establish boundaries with loved ones and family, but when it comes to your finances, it is absolutely necessary. Don't hesitate to insist on written verification, receipts, and communication, even from your family members. Anyone who really does have your best interests at heart will understand your desire to protect yourself.
Know The Red Flags
Thieves use charm, pressure, and guarantees of huge returns to lure people. If the one who is guaranteeing returns is not explaining the investment in plain language, advising you just to "trust them," or assuring returns, those are red flags. Real investments present clear rules, full disclosure, and some level of risk.
What If You Feel Guilty?
Most scam victims by family members feel guilty or embarrassed trying to get their money back. But you shouldn't. Seeking justice does not make you a terrible family member—since you're not the one who destroyed the trust in this case. And asserting justice does not mean that you don't care about family, it signifies that you do care about your financial future.
Mediation: The Middle Path
If you're not willing to go to court immediately, you might consider mediation. A mediator is a third-party individual who assists in the resolution between the two parties. Mediation is faster and cheaper than court, and can be a good option if you think your family member might be more open to discussing the issue than suing about it.
Can You Write This Off On Taxes?
In some cases, people can deduct stolen or misplaced investment funds on their tax returns under a theft loss or casualty loss. But the laws surrounding that have changed over the past few years and it's not certain. An accountant can review your situation and tell you if your loss is deductible and how to fill out the proper forms.
Building Back After The Betrayal
Getting ripped off by someone you did trust doesn't only hurt your pocketbook—it also stings emotionally. It's okay to be angry, betrayed, or even embarrassed. Give yourself some time to get over those feelings. Talk to a financial advisor to start rebuilding your financial base again, and don't be afraid to call upon emotional support if necessary.
What To Do Next
Your most important task now is to act. Don't hesitate and hope that your family member will recant. First, get all the records of contacts and transactions in line. Arrange an interview with a lawyer. Decide whether you want to start with a letter of demand, initiate a small claims action, or take the police route. Time is of the essence—it is quite possible that statutes of limitation are involved, and the sooner you act, the better your chances of recovery.
Final Thoughts
It is a painful experience to be swindled by a relative, but you don't have to be a victim forever. You can take control and get justice. And most of all, you can learn how to take care of yourself in the future. Whether with the law, finances, or boundaries, your money is worth respecting—and so are you.
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