How Advance Fee Scams Operate
Poor Nigeria. It seems that this country frequently gets blamed as being the center of Internet scams. That’s because the Advance Fee fraud originated, or at least was perfected there. In addition, the Nigerian government seems to protect fraudulent activities and does not prosecute scammers when they are discovered. Now-a-days these types of scams can originate anywhere, including the United States and Canada.
According to UltraScan, a global investigations group, the Nigerian Advance fee scam, also called the 419 scam, is the world’s must successful fraud, costing people worldwide over $32 billion. More than 300,000 people have fallen for this, with more buying in every day.
Since it is so widely publicized, why does it continue to be so successful? Because people want to believe, and because people are greedy. There are more than 100 variations on this scam, so they may be hard to spot at first, but all of them call for the mark to pay upfront before getting the thing of value.
NextWeb Security has a huge list of such scams – here is a sample:
In the original scam, of which new variations are generated daily, the 419 scammer has or can gain access to a large sum of money by some means and he needs the financial and personal help of the target, in return for a percentage of the funds, to get the necessary transactions processed and get monies out of the country. As in all advance fee frauds, the mark has to send money prior to obtaining any benefit. Once the funds are transferred, either you do not hear from the scammer again or he has excuses to ask for additional sums.
The ATM Card Payment Scam is used in conjunction with other scams, such as a fake Lottery Scam. The victim is promised an ATM card with which the victim can withdraw millions of dollars (up to a large limit per day) at any location that accepts ATM cards. However, the victim must pay a fee to receive the card. If it ever is received, it will not work. A "Replacement card" will then be offered, again for a fee.
In the Black Currency scam the 419er has a large amount of currency available to share with the target, but the currency has been defaced. However, the currency can be cleaned if the target will purchase enough of the correct cleaning solution. Guess who has it for sale?
In one of the original 419 frauds, the scammer has Cashier's Checks or money orders he needs cashed, and the target can keep a percentage of the check as his commission for cashing it and forwarding the remaining proceeds to the 419er. The original check or money order sent to the target eventually bounces. The target is out both the money advanced to the 419er and the amount owed to the bank. The target must also pay any overdrafts and any relevant fees. On occasion the victim lands up in jail for bank fraud.
Charities are not safe. The 419er approaches a charitable organization with a request for help, usually about getting a large sum of money transferred out of a country in which the charitable organization operates. A percentage of the proceeds are often offered to the charitable organization for their assistance. The 419er needs the charity’s money for fees in order to get the monies freed up.
In a job scam, the 419er "employs" the target to process financial transactions for a commission and has the target advance the net proceeds of these transactions to the scammer before the checks sent to the target bounce.
If you run a business, beware of the scam in which goods or services are ordered in advance, on credit. Then the scammer does not pay or pays with a bad check.
In the romance scam, the 419 meets the target online in a chat room or through a dating or instant messenger online service, befriends the target, and gets the target to advance him money for various reasons.
Greedy people often fall for the inheritance scam. Someone has died with no relatives to claim the large cash bequest left by the deceased. Often, the 419er says that if someone does not claim the money it will revert to the Government and no one will get it. The target is asked to "stand in" as a relative to claim the money, with the 419er taking care of all the details, and then they can split the proceeds. The scammer needs up-front money for fees to get the target declared the rightful inheritor.
In another action that can get the victim in legal trouble, the 419er will obtain stolen merchandise for personal use or to sell. Because many companies will not send merchandise to Nigeria or Eastern Europe due to warnings about stolen credit card purchases, the scammer must find an in-country person to receive then reship the goods.
Scammers all around the world use similar techniques. We frequently hear of “gypsy-type” contractors offering to do repairs on a home at low cost. They may be willing to resurface or blacktop your driveway for half the expected price. Once you agree, they unload some supplies from their truck, and then ask for advanced payment to get additional supplies. Since they have material set out, you agree, perhaps giving $120 for five buckets of blacktopping. They drive off to get it and you never see them again. You are left with useless garbage on your lawn.
This type of scam also applies to roofing, carpentry, and other odd jobs. Some contractors ask for money up front, then do a shoddy job, or start and never finish. It may take years and lots of legal fees to get back even part of what you paid them.
Online auctions use advance fee techniques, purchasing items and never paying for them or selling items and never sending them once they receive the money. In some cases you do get poor quality or out-of-date products.
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