Consumer Safety & Awareness Part 19

Examples of Advance Fee Scams


In order to recognize the many varieties and ever changing advance fee scams, one needs to study many examples. Con artists spend considerable time creating new, innovative schemes to trick us. They mask their techniques and hide their intent carefully.

In the previous section we looked at the typical Nigerian 419 scams that included promising something for a fee paid in advance, an inheritance, found money, stolen goods, ATM cards, and traveler checks. Other 419 scams, all requiring you to pay for something in advance and usually involve a wealthy investor who wants to invest in a large sum of money in a foreign country, but can't attend to the business personally. Wouldn't you care to do them the favor of overseeing the investment?

A fortunate person has gotten a large quantity of a commodity, oil, gold, or diamonds for example, but cannot move them from their storage facility without the help of a foreign investor. If you would only pay some fee, bribes, or other expense, he will let you keep a very generous percentage of the commodities' market value once they have been sold.

A business places a relatively small legitimate order from your company, usually under $1,000 worth of goods. Thereafter, another order is placed, for a slightly larger amount, again, paid in full. Suddenly, an urgent order and much larger is placed, but this one needs to be air freighted on the double! Your trade partner has just received a lucrative contract, and if this shipment arrives on time, it means many more large orders in the near future. Don't worry about waiting until the bank draft clears, after all, the order is from a trustworthy company that has always made payments before.

You receive an e-mail from a U.S. Special Forces commando who has found millions in drug money while conducting a covert mission against the Taliban. The "commando" says he has stashed the cash in luggage, but wants to keep it in someone else's bank account "for safekeeping."

The National Fraud Information Center reports a scam artist who used dating websites, including sites for gays. She pretended to be the daughter of a slain African gold mine executive seeking a long-term relationship with a special someone. Phony Web sites, which look quite realistic, may contain plenty of investor information, often copied from the sites of legitimate regulators. The sites are one of the many ploys used in advance fee scams that try to get investors to send money in advance of any service rendered. These fake sites often use "cookies" to track visitors and gather information.

Taking advantage of recent health scares, one advance fee ploy involves the discovery of a vaccine or other preventatives that can not only save millions of lives but will also generate considerable money. The inventor needs financial support to distribute, market, or manufacture his cure. A twist on this one is the sale of stock in such a company. Stock is not sold by e-mail. If you are actively advertising real estate for sale, you may receive an offer to purchase your property from a foreign concern. The catch: You are required to pay up-front fees to a “special broker.” Once paid, you cannot locate this special broker to consummate the purchase.

Almost all of these schemes have five common features – something of great value exists, there is a pressing time issue, it comes from out of the country, assistance is needed, you can not tell anyone else, and advanced payment is required to free up the item of value. Until 2007, more than 50% of these originated in Nigeria, but now they can come from anywhere. In many cases similar versions even have local, United States or Canada, origins.

Many domestic advance fee scams are financial in nature and prey on people with poor credit history or current money flow problems such as late payment of mortgages or loans. They promise low cost loans, debt consolidation, improved credit scores, or other solutions to financial problems. All of them require a fee for processing, credit evaluation, good faith, or other improbable reason.

Occasionally, yet growing more common, the scammers do not ask for any money at all, but need information to verify your credibility. These are identity theft scams. Never send anyone your bank or investment numbers, or even let others know where you invest. Your social security number must be sacred – only medical and valid insurance people need this. If you have an investment that produces dividends or interest, the company needs your social security number for their IRS reports, but deal only with such institutions in person.

(To be continued next week)