An advance-fee fraud is a confidence trick in which the target is persuaded to advance sums of money in the hope of realizing a significantly larger gain.[1] Among the variations on this type of scam, are the Nigerian Letter (also called the 419 fraud, Nigerian scam, Nigerian bank scam, or Nigerian money offer[2]),[3] the Spanish Prisoner, the black money scam as well as Russian/Ukrainian scam (also widespread, though far less popular than the former). The so-called Russian and Nigerian scams stand for wholly dissimilar organised-crime traditions; they therefore tend to use altogether different breeds of approaches.
Although similar to older scams such as the Spanish Prisoner, the modern 419 scam originated in the early 1980s as the oil-based Nigerian economy declined. Several unemployed university students first used this scam as a means of manipulating business visitors interested in shady deals in the Nigerian oil sector before targeting businessmen in the west, and later the wider population. Scammers in the early-to-mid 1990s targeted companies, sending scam messages via letter,[4] fax, or Telex.[5] The spread of e-mail and easy access to e-mail-harvesting software significantly lowered the cost of sending scam letters by using the Internet. In the 2000s, the 419 scam has spurred imitations from other locations in Africa, Asia and Eastern Europe, and, more recently, from North America, Western Europe (mainly United Kingdom and Netherlands), and Australia.
The number "419" refers to the article of the Nigerian Criminal Code (part of Chapter 38: "Obtaining Property by false pretences; Cheating") dealing with fraud.[6] The American Dialect Society has traced the term "419 fraud" back to 1992.[7]
The advance-fee fraud is similar to a much older scam known as the Spanish Prisoner scam[8] in which the trickster tells the victim that a rich prisoner promised to share treasure with the victim in exchange for money to bribe prison guards. An older version of this scam existed by the end of 18th century, and is called "the Letter From Jerusalem" by Eugène François Vidocq, in his memoirs.[9]
Insa Nolte, a lecturer of University of Birmingham's African Studies Department, stated that "The availability of e-mail helped to transform a local form of fraud into one of Nigeria's most important export industries."[10] (Though in fact, Nigeria's total exports are more than $65 billion per year;[11] even by conservative estimates, 419 fraud comes to less than 0.5% of this total.)
Embassies and other organizations warn visitors to various countries about 419. Countries in West Africa with warnings cited include Nigeria,[8][12] Ghana,[13][14] Benin,[15] Côte d'Ivoire (Ivory Coast),[16] Togo,[17][18] Senegal[19] and Burkina Faso.[20] Countries outside West Africa with 419 warnings cited include South Africa,[18][21] Spain,[21] and the Netherlands.[22]
This scam usually begins with a letter or e-mail[8] purportedly sent to a selected recipient but actually sent to many, making an offer that would result in a large payoff for the victim. The e-mail's subject line often says something like "From the desk of Barrister. [Name]", "Your assistance is needed", and so on. The details vary, but the usual story is that a person, often a government or bank employee, knows of a large amount of unclaimed money or gold which he cannot access directly, usually because he has no right to it. Such people, who may be real but impersonated people or fictitious characters played by the con artist, could include the wife or son of a deposed African or Indonesian leader or dictator who has amassed a stolen fortune, or a bank employee who knows of a terminally ill wealthy person with no relatives or a wealthy foreigner who deposited money in the bank just before dying in a plane crash (leaving no will or known next of kin),[23] a US soldier who has stumbled upon a hidden cache of gold in Iraq, a business being audited by the government, a disgruntled worker or corrupt government official who has embezzled funds, a refugee,[24] and similar characters. The money could be in the form of gold bullion, gold dust, money in a bank account, blood diamonds, a series of checks or bank drafts, and so forth. The sums involved are usually in the millions of dollars, and the investor is promised a large share, typically ten to forty percent, if they assist the scam character in retrieving the money. Whilst the vast majority of recipients do not respond to these e-mails, a very small percentage do, enough to make the fraud worthwhile as many millions of messages can be sent. Invariably sums of money which are substantial, but very much smaller than the promised profits, are said to be required in advance for bribes, fees, etc.—this is the money being stolen from the victim, who thinks he or she is investing to make a huge profit.
Many operations are professionally organized in Nigeria, with offices, working fax numbers, and often contacts at government offices. The victim who attempts to research the background of the offer often finds that all pieces fit together. Such scammers can often lure wealthy investors, investment groups, or other business entities into scams resulting in multi-million dollar losses. However, many scammers are part of less organized gangs or are operating independently; such scammers have reduced access to the above connections and thus have little success with wealthier investors or business entities attempting to research them, but are still convincing to middle-class individuals and small businesses, and can bilk hundreds of thousands of dollars from such victims.
If the victim agrees to the deal, the other side often sends one or more false documents bearing official government stamps, and seals. 419 scammers often mention false addresses and use photographs taken from the Internet or from magazines to falsely represent themselves. Often a photograph used by a scammer is not of any person involved in the scheme. Multiple "people" involved in schemes are fictitious; the author of the "West African Advance Fee Scams" article posted on the website of the Embassy of the United States in Abidjan, Côte d'Ivoire believes that in many cases one person controls many fictitious personas used in scams.[16]
A scammer introduces a delay or monetary hurdle that prevents the deal from occurring as planned, such as "To transmit the money, we need to bribe a bank official. Could you help us with a loan?" or "For you to be a party to the transaction, you must have holdings at a Nigerian bank of $100,000 or more" or similar. More delays and more additional costs are added, always keeping the promise of an imminent large transfer alive, convincing the victim that the money they are currently paying is covered several times over by the payoff. Sometimes psychological pressure is added by claiming that the Nigerian side, to pay certain fees, had to sell belongings and borrow money on their house, or by pointing out the different salary scale and living conditions in Africa, compared to the West. Much of the time, however, the needed psychological pressure is self-applied; once the victims have put money in toward the payoff, they feel they have a vested interest in seeing the "deal" through. Some victims believe that they can cheat the con artist.[16] This idea is often encouraged by the fraudsters who write in a clumsy and uneducated style which presents them as naive and easily cheated by a sophisticated Westerner.
The essential fact in all advance-fee fraud operations is that the promised money transfer never happens because the money or gold does not exist. The perpetrators rely on the fact that, by the time the victim realizes this (often only after being confronted by a third party who has noticed the transactions or conversation and recognized the scam), the victim may have sent thousands of dollars of their own money, and sometimes thousands or millions more that has been borrowed or stolen, to the scammer via an untraceable and/or irreversible means such as wire transfer.[16]
In extreme cases the victim may not realize that he or she has been defrauded. A version of the scam is for the thief to claim to have contacts to facilitate legitimate business loans; the victim here is not persuaded that he is doing anything illegal. The fraudster meets the victim, and must be able to act the part of a well-connected and experienced loan broker. He asks for payment in advance, which is normal for large loans. Then the loan gradually falls through in a plausible way, and the victim may end up being defrauded of tens of thousands of dollars or pounds, thinking only that the deal simply failed. These frauds may go unreported, either because the victim does not realize he has been cheated, or due to reluctance to admit the facts. Because of "non-disclosure clauses" which may have been included in the fraudulent contract, reporting of the scam may be delayed until the victim becomes certain he has been cheated.
The spam e-mails perpetrating these scams are often sent from Internet cafés equipped with satellite Internet. Recipient addresses and e-mail content are copied and pasted into a webmail interface using a standalone storage medium, such as a memory card. Many areas of Lagos, such as Festac, contain many cyber cafés that serve scammers; many cyber cafés seal their doors during afterhours, such as from 10:30 PM to 7:00 AM, so that scammers inside may work without fear of discovery.[25]
Nigeria also contains many businesses that provide false documents used in scams; after a scam involving a forged signature of Nigerian President Olusegun Obasanjo in summer 2005, Nigerian authorities raided a market in the Oluwole section of Lagos. The police seized thousands of Nigerian and non-Nigerian passports, 10,000 blank British Airways boarding passes, 10,000 United States money orders, customs documents, false university certificates, 500 printing plates, and 500 computers.[25]
During the courses of many schemes, scammers ask victims to supply bank account information. Usually this is a "test" devised by the scammer to gauge the victim's gullibility.[22]
Scammers often request that payments be made using a wire transfer service like Western Union and Moneygram. The reason given by the scammer usually relates to the speed at which the payment can be received and processed, allowing quick release of the supposed payoff. The real reason is that wire transfers and similar methods of payment are irreversible, untraceable and, because identification beyond knowledge of the details of the transaction is often not required, completely anonymous.[16]
Telephone numbers used by scammers tend to come from mobile phones. In Côte d'Ivoire (Ivory Coast) a scammer may purchase an inexpensive mobile phone and a pre-paid SIM card without submitting subscriber information. If the scammers believed they are being traced, they discard their mobile phones and purchase new ones.[16]
In Benin, Nigerians operate scams with Beninese cooperating in the schemes.[15]
Some crime syndicates employ fraudsters in the United States who conclude "deals" or threaten victims who try to leave deals.[26][27]
Fraudulent checks and money orders are key elements in many advance-fee scams, such as auction/classified listing overpayment, lottery scams, inheritance scams, etc, and can be used in almost any scam when a "payment" to the victim is required to gain, regain or further solidify the victims' trust and confidence in the validity of the scheme.[28]
The use of checks in a scam hinges on a US law (and common practice in other countries) concerning checks: when an account holder presents a check for deposit or to cash, the bank must (or in other countries, usually) make the funds available to the account holder within 1–5 business days, regardless of how long it actually takes for the check to clear and funds to be transferred from the issuing bank.[29] The checks clearing process normally takes 7–10 days and can in fact take up to a month when dealing with foreign banks. The time between the funds appearing as available to the account holder and the check clearing is known as the "float", during which time the bank could technically be said to have floated a loan to the account holder to be covered with the funds from the bank clearing the check.
The check given to the victim is typically counterfeit but drawn on a real account with real funds in it. With a piece of software like QuickBooks and/or pre-printed blank check stock, using the correct banking information, the scammer can easily print a check that is absolutely genuine-looking, passes all counterfeit tests, and may even clear the paying account if the account information is accurate and the funds are available. However, whether it clears or not, it eventually becomes apparent either to the bank or the account holder that the check is a forgery. This can be as little as three days after the funds are available if the bank supposedly covering the check discovers the check information is invalid, or it could take months for a business or individual to notice the fraudulent draft on their account. It has been suggested that in some cases the check is genuine — however the fraudster has a friend (or bribes an official) at the paying bank to claim it is a fake weeks or even months later when the physical check arrives back at the paying bank.
Regardless of the amount of time involved, once the cashing bank is alerted that the check is fraudulent, the transaction is reversed and the money removed from the victim's account. In many cases, this puts victims in debt to their banks as the victim has usually sent a large portion of the check by some non-reversible 'wire transfer' means (typically Western Union) to the scammer and, since more uncollected funds have been sent than funds otherwise present in the victim's account, an overdraft results.
A central element of advance-fee fraud is that the transaction from the victim to the scammer must be untraceable and irreversible. Otherwise, the victim, once they become aware of the scam, can successfully retrieve their money and/or alert officials who can track the accounts used by the scammer.
Wire transfers via Western Union are ideal for this purpose. The wire transfer, if sent internationally, cannot be cancelled or reversed, and the person receiving the money cannot be tracked. In fact, that person often does not have to provide identification; they only have to know the identifiers of the transaction such as the control number (MTCN) and do not need the "secret question". Thus, the overwhelming majority of scams involve making payment via wire transfer. Other similar uncancellable forms of payment include postal money orders and cashier's checks, but as wire transfer is the fastest method, it is the most common.
Since the scammer's operations must be untraceable to avoid identification, and because the scammer is often impersonating someone else, any communication between the scammer and his victim must be done through channels that hide the scammer's true identity. The following options in particular are widely used.
Because many free e-mail services do not require valid identifying information, and also allow communication with many victims in a short span of time, they are the preferred method of communication for scammers. Some services go so far as to mask the sender's source IP address, making the scammer completely untraceable even to country of origin. Scammers can create as many accounts as they wish and often have several at a time. In addition, if e-mail providers are alerted to the scammer's activities and suspend the account, it is a trivial matter for the scammer to simply create a new account to resume scamming.
Some fraudsters hijack existing e-mail accounts and use them for advance-fee fraud purposes. The fraudsters e-mail associates, friends, and/or family members of the legitimate account owner in an attempt to defraud them.[30] This ruse generally requires the use of phishing or keylogger computer viruses to gain login information for the e-mail address.
Facsimile machines are commonly used tools of business, whenever a client requires a hard copy of a document. They can also be simulated using web services, and made untraceable by the use of prepaid phones connected to mobile fax machines or by use of a public fax machine such as one owned by a document processing business like FedEx Office/Kinko's. Thus, scammers posing as business entities often use fax transmissions as an anonymous form of communication. This is more expensive, as the prepaid phone and fax equipment cost more than e-mail, but to a skeptical victim it can be more believable.
Abusing SMS bulk senders such as WASPS, scammers subscribe to these services using fraudulent registration details and paying either via cash or stolen credit card details. They then send out masses of unsolicited SMS'es to victims stating they have won a competition or like event and they have to contact somebody to claim their prize. Typically the details of the party to be contacted will be an equally untraceable email address or a virtual telephone number. These messages may be sent over a weekend when abuse staff at the service providers are not working, enabling the scammer to be able to abuse the services for a whole weekend.
Many scams use telephone calls to convince the victim that the person on the other end of the deal is a real, truthful person. The scammer, possibly impersonating a US citizen or other person of a nationality, or gender, other than their own, would arouse suspicion by telephoning the victim. In these cases, scammers use TRS, a US federally-funded relay service where an operator or a text/speech translation program acts as an intermediary between someone using an ordinary telephone and a deaf caller using TDD or other TeleType device. The scammer may claim they are deaf, and that they must use a relay service. The victim, possibly drawn in by sympathy for a disabled caller, might be more susceptible to the fraud.
FCC regulations and confidentiality laws require that operators relay calls verbatim, and that they adhere to a strict code of confidentiality and ethics. Thus, no relay operator may judge the legality and/or legitimacy of a relay call, and must relay it without interference. This means the relay operator may not warn victims, even when they suspect the call is a scam. MCI said that about one percent of their IP Relay calls in 2004 were scams.[31]
Tracking phone-based relay services is relatively easy, so scammers tend to prefer Internet Protocol-based relay services such as IP Relay. In a common strategy, they bind their overseas IP address to a router or server located on US soil, allowing them to use US-based relay service providers without interference.
TRS is sometimes used to relay credit card information to make a fraudulent purchase with a stolen credit card. In many cases however, it is simply a means for the con artist to further lure the victim into the scam.
Though 419 scams are often perpetrated by e-mail alone, some scammers enhance believability of their offer by using a sham website. They create these sites to impersonate real commercial sites, such as eBay, PayPal, or a banking site like Bank of America or The Natwest Bank for phishing. Others represent fictional companies or institutions to give the scam credibility.
Though phishing is a secondary interest of most scam operations, as the object of the scammer is to deceive the victim into sending the money through legitimate means, the use of websites for advance-fee fraud is common. For instance, a scammer may create a website for a fictional bank, then give the victim details to login to the site, where the victim sees the money the scammer has promised sitting in the account. The victim believes the scammer and sends the requested advance payments. Fake (or hijacked) websites are the centerpiece of false online storefront scams.
Another twist on scamming is where links are provided to real news sites covering events the scammer says are relevant to the transaction they propose. For instance, a scammer may use news of the death of a prominent government official as a backstory for a scam involving getting millions of dollars of the slain official's money out of the country. These are real websites covering legitimate news, but the scammer is usually not connected in any way with the events reported, and is simply using the story to gain the victim's sympathy.
Sometimes, victims are invited to a country to meet real or fake government officials. Some victims who do travel are instead held for ransom. In some rumored cases, they are smuggled into the country without a visa and threatened into giving more money as the penalties for being in a foreign country without a visa may be severe.[32] Sometimes victims are ransomed or, as in the case of the 29 year old Greek George Makronalli who was lured to South Africa, killed.[33][34]
Scammers recognise that their victim who has just been scammed is more likely to fall for scamming attempts than a random person. Often after a scam, the victim is contacted again by the scammer, representing himself as a law enforcement officer. The victim is informed that a group of criminals has been arrested and that they have recovered his money. To get the money back, the victim must pay a fee for processing or insurance purposes. Even after the victim has realised that he has been scammed, this follow up scam can be successful as the scammer represents himself as a totally different party yet knows details about the transactions. The realization that he has lost a large sum of money and the chance he might get it back often leads to the victim transferring even more money to the same scammer.
The scammer sends a message thanking the victim for helping him start a transaction. They explain that since they have been able to leave regime-torn Nigeria (with the victim's help) they have been residing and working in the UK and finishing the "transaction" without your help. The scammer informs the victim of their recent inheritance or partnership with a Brazilian businessman or and they would like to compensate you for your "release of some money." In order to claim the money the victim must contact the scammer's secretary immediately or else miss out of their share of a multi-million dollar sum.
There are many variations on the most common stories, and also many variations on the way the scam works. The following are notable deviations from the standard Nigerian Letter scam, but still retain the core elements; the victim is deceived by some disproportionately large gain into sending an advance payment, which once made is irrecoverable.
A modern activity is advertising automobiles on websites. They list a (non-existent) high value car with a low price as bait to attract buyers eager to buy quickly. The scammer says "I am not in the country, but if you pay me first, a friend will drive the car around to you". The payment required may be the full price, or a deposit, but it would not be an insignificant fee. The victim never sees the car, as it does not exist. The scammers use e-mail only, as they know that the sound of their voice and their attitude will give them away as being high risk.
Another scheme involves advertising fake academic conferences and enticing academics to apply to present papers. It is a common practice that the conference subsidizes or pays for the air travel of academics who present papers at the conference, but does not pay for accommodation. One way the scammer baits the hopeful attendee is they offer free air travel to the victim, but only as long as they pre-pay for hotel accommodation. The scammer can give a variety of reasons that the accommodation must be pre-paid — primarily that they don't trust the victim will attend the conference unless he pays upfront.
Any goods or services may be used in the scam, but the idea is that the scammer baits the victim with a good deal, but the victim must pay upfront and electronically.
Some schemes are based solely on conning the victim into cashing a counterfeit check. The scammer contacts the victim to interest them in a "work-at-home" opportunity, or asks them to cash a check or money order that for some reason cannot be redeemed locally. A recently-used cover story is that the perpetrator of the scam wishes the victim to work as a "mystery shopper", evaluating the service provided by MoneyGram or Western Union locations within major retailers such as Wal-Mart.[35] The scammer sends the victim a check or money order, the victim cashes it, sends the cash to the scammer via wire transfer, and the scammer disappears. Later the forgery is discovered and the bank transaction is reversed, leaving the victim liable for the balance. Schemes based solely on check cashing usually offer only a small part of the check's total amount, with the assurance that many more checks will follow; if the victim buys in to the scam and cashes all the checks, the scammer can win big in a very short period of time. Other scams such as overpayment usually result in smaller revenues for the scammer, but have a higher success rate as the scammer's request seems more believable.
Some check-cashing scammers use multiple victims at multiple stages of the scam. A victim in the US or other "safe" country such as the UK or Canada (often the country in which the cashing victim resides) is sometimes approached with an offer to fill out checks sent to them by the scammer and mail them to other victims who cash the check and wire the money to the scammer. The check mailer is usually promised a cut of the money from the scammer; this usually never occurs, and in fact the check mailer is often conned into paying for the production and shipping costs of the checks. The check information has either been stolen or fictionalized and the checks forged. The victim mailing the check is usually far easier to track (and prosecute) than the scammer, so when the checks turn up as fraudulent, the one mailing them usually ends up not only facing federal bank fraud and conspiracy charges, but liability for the full amount of the fraudulent checks. Because the check mailer is taking the fall, the scammer is even less likely to be caught, which makes it a popular variation of the scam for scammers in nations with tougher anti-fraud laws.
A variation of the check-cashing scheme involves owners of vacation rentals. The scammer expresses interest in renting the unit for a much higher than normal rate, usually for an upcoming honeymoon, business trip, etc. The scammer also offers to pay all fees "up front," as soon as the unsuspecting unit owner agrees to the windfall rental. Eventually a very official looking money order/cashier's check arrives. About this time the scammer requests that a portion of the rental fee be returned for some compelling reason...wedding called off, death in the family, business failure, etc. Due to the supposed crises, it is requested that most of the rental fee be returned via wire transfer. The unit owner is encouraged to retain "a fair amount" to compensate him for his time. The wire transfer is sent, only to find out later that the official looking check was indeed fake and the entire amount is charged back to the unit owner by his bank.
A recent variant is the Romance Scam, which is a money-for-romance angle. The con artist approaches the victim on an online dating service, an Instant messenger (like Yahoo IM), or a social networking site. The scammer claims an interest in the victim, and posts pictures posted of an attractive person (not themselves). The scammer uses this communication to gain confidence, then asks for money. The con artist may claim to be interested in meeting the victim, but needs cash to book a plane, hotel room, or other expenses. In other cases, they claim they're trapped in a foreign country and need assistance to return, to escape imprisonment by corrupt local officials, to pay for medical expenses due to an illness contracted abroad, and so on. The scammer may also use the confidence gained by the romance angle to introduce some variant of the original Nigerian Letter scheme, such as saying they need to get money or valuables out of the country and offer to share the wealth, making the request for help in leaving the country even more attractive to the victim. In a newer version of the scam, the con artist claims to have 'information' about the fidelity of a person's significant other, which they will share for a fee. This information is garnered through social networking sites by using search parameters such as 'In a relationship' or 'Married'. Anonymous e-mails are first sent to attempt to verify receipt, then a new web based e-mail account is sent along with directions on how to retrieve the information.
The lottery scam involves fake notices of lottery wins. The winner is usually asked to send sensitive information to a free e-mail account. The scammer then notifies the victim that releasing the funds requires some small fee (insurance, registration, or shipping). Once the victim sends the fee, the scammer invents another fee.
Much like the various forms of overpayment fraud detailed above, a new variant of the lottery scam involves fake or stolen checks being sent to the 'winner' of the lottery (these checks representing a part payment of the winnings). The winner is more likely to assume the win is legitimate, and thus more likely to send the fee (which he does not realize is an advance fee). The check and associated funds are flagged by the bank when the fraud is discovered, and debited from the victim's account.
In 2004 a variant of the lottery scam appeared in the United States. Fraud artists using the scheme call victims on telephones; a scammer tells a victim that a government has given them a grant and that they must pay an advance fee, usually around $250, to receive the grant.[36]
An e-mail is sent to the victim's inbox, supposedly from a hitman who has been hired by a "close friend" of the recipient to kill him or her but will call off the hit in exchange for a large sum of money. This is usually backed up with a warning not to contact the local police or FBI, or the "hitman" will be forced to go through with the plan.[32][37] This is less an advance-fee fraud and more outright extortion, but a reward can sometimes be offered in the form of the "hitman" offering to kill the man who ordered the original hit on the victim.
Related to the hitman scam, the scammer contacts a business, mall, office building, or other commercial location with a bomb threat. The scammer says they will detonate the bomb unless the management of the business does as the scammer tells them. Often, the scammer says they have the store under surveillance; however, analysis of the calls by police have established that the vast majority of threat calls are made from other states or even from outside the country. Some evidence exists that points to the scammers hacking into the store's surveillance network, but this has not been confirmed in any case and has been refuted in others.[38] The scammer usually demands that the store management or people in the headquarters office of the store (if the store is a chain) send money via wire transfer to the scammer to spare the store and the people in it. Other demands of these scammers have been more personal and humiliating, such as demanding that everyone in the store take off their clothes.[38]
Because the underlying threat in the scam is a bomb threat, local law enforcement very quickly responds to the site under threat; however, because the scammer is usually nowhere near this location, the scammer is in little if any danger of being apprehended while the scam is playing out. Law enforcement, in the meantime, cannot assume the threat is anything but genuine, and therefore can do little to intervene without risking the detonation of the bomb. The fact that the threat was in reality a scam has usually not been discovered until long after the situation is over—and the extortionist has collected the money demanded.
The scammer poses as a charitable organization soliciting donations to help the victims of a natural disaster, terrorist attack (such as the Sept. 11 World Trade Center attack), regional conflict, or epidemic. Hurricane Katrina and the 2004 tsunami were popular targets of scammers perpetrating charity scams; other more timeless scam charities purport to be raising money for cancer, AIDS or Ebola virus research, children's orphanages (the scammer pretends to work for the orphanage or a non-profit associated with it), or impersonates charities such as the Red Cross or United Way. The scammer asks for donations, often linking to online news articles to strengthen their story of a funds drive. The scammer's victims are charitable people who believe they are helping a worthy cause and expect nothing in return. Once sent, the money is gone and the scammer often disappears, though many attempt to keep the scam going by asking for a series of payments. The victim may sometimes find themselves in legal trouble after deducting their supposed donations from their income taxes. United States tax law states that charitable donations are only deductible if made to a qualified non-profit organization.[39] The scammer may tell the victim their donation is deductible and provide all necessary proof of donation, but the information provided by the scammer is fictional, and if audited, the victim faces stiff penalties as a result of the fraud. Though these scams have some of the highest success rates especially following a major disaster, and are employed by scammers all over the world, the average loss per victim is less than other fraud schemes. This is because, unlike scams involving a large expected payoff, the victim is far less likely to borrow money to donate or donate more than they can spare.
In a related variant, the scammer poses as a terminally ill mother, poor university student, or other down-on-their-luck person and simply begs the victim for money for college tuition, to sponsor their children, or a similar ruse. The money, they say, will be repaid plus interest by some third party at a later date (often these third parties are some fictitious agency of the Nigerian government, or the scammer themselves once a payment from someone else is made available to them). Once the victim starts paying money to the scammer, the scammer tells the victim that additional money is needed for unforeseen expenses, similar to most other variants; in the case of the ill mother, the children will fall ill as well and require money for a doctor's care and medicine (many scammers go as far as to say that as the sponsor of the children, the victim is legally liable for such costs), where the student might claim that a dormitory fire destroyed everything they own.
This variant targets former victims of scams. The scammer contacts the victim saying that their organization can track and apprehend the scammer and recover the money lost by the victim, for a price. Alternatively, the scammer may say that a fund has been set up by the Nigerian government to compensate victims of 419 fraud, and all that is required is proof of loss (which usually includes personal information) and a processing and handling fee to release the amount of the claim. The scammer is counting on the victim's dire need to recover their lost money, as well as the fact that they have fallen victim before and are therefore susceptible to such scams. Often, these scams are perpetrated by the same scammer who conned the victim in the first place, as an attempt to ensure the scammer gets every penny possible from the victim. Alternately, the original scammer "sells" a list of the people he has scammed but who have ceased contact to another scammer who runs the recovery scam. Sometimes the scammer impersonates the foremost "fraud related crime-fighters" in Nigeria, the EFCC (Economic and Financial Crimes Commission), which not only adds credibility to the scam, but tarnishes the reputation of the EFCC once this second scam is discovered.[16][40]
Another variation of the advance payment type of scam involves recruiting unsuspecting individuals for non-existent babysitting, nanny, or au-pair employment. In one variation a prospective employee may be given an "advance" on wages; in another the victim may be asked to verify pricing and ultimately purchase items for the scammer's non-existent child. Victims are often asked to submit résumés and references and jump through other hoops, cementing in the victim's mind that the employer must be legitimate and the high wages offered are real. Focusing the victim's thinking on proving their worthiness for employment consideration serves to distract the victim from considering whether the offer itself is worthy of replying to.
Another such scam is based on the adoption of a puppy or an exotic pet such as parrots or reptiles. A scammer first posts an advertisement or sets up a web page offering puppies for adoption or for sale at a ridiculously low price, most often using stolen pictures from other websites and respectable breeders. When a victim responds to the ad and questions the lowered price or the reason for giving up such an expensive pet, the scammer first explains that they have recently moved to Nigeria or Cameroon from the US for work (usually volunteer work as missionaries) or for studies, and claims either to have no time to properly care for the pet, that the weather has had such a terrible toll on the pet, or that they have too many pets to care for.
The scammer and victim exchange a few e-mails to build trust. Once it is established that the victim offers the right home for the pet, the scammer offers to ship the pet, and requests the victim only pay for shipping, or comes off the original price substantially to seem legitimate. The victim, who now has an emotional attachment to the pet, feels obligated and even happy to do so, as shipping is a small price to pay compared to the pet's full price at a shop or breeder. The scammer requests Western Union or MoneyGram to keep the deal going in a timely fashion as the pet is ready to go to a new home and the victim is now excited. However, after wiring money, the victim doesn't receive the pet (as it does not exist), and if the victim does hear from the scammer again it is only for more money (to get puppy out of airport holding, or to pay unexpected vet bills that have come up) until the victim stops responding.[41]
The popular online classifieds website, Craigslist, has been plagued with scammers using advance-fee fraud and similar techniques, usually involving fake checks, to con people out of their money. Sometimes many scammers contact a person who is either attempting to buy or sell items on Craigslist, and attempt to perpetrate the exact same scam. Many of the same elements as the Nigerian 419 scams are used often on Craigslist, including persons conducting transactions from outside the country, sending realistic looking bank checks, sending more money than is owed, and requesting that money be wired back to the scammer.[42][43]
Another advance-fee method that has been used recently on Craigslist is where the scammer will contact someone selling an item and ask them to ship the item to a location outside the US, then provide the tracking number for the shipped item in exchange for payment. The seller then sends the item and provides the tracking number, after which the scammer never provides payment. Sometimes the scammer will approach someone offering a room or apartment for rent and pose as someone moving in to their area from overseas. They will create a scenario in which they are pressured to secure the room in advance, and ask if they can secure their occupancy with a deposit. The deposit check that they send will be a fake check for far more than the amount requested for a deposit. When the check arrives, the scammer will ask for a refund of the difference between the check they sent and the agreed upon amount. The fake check will bounce and the victim has lost whatever money they "refunded" to the scammer.
A similar scam exists on the rental model, particularly in the United Kingdom - the scammer posts an ad on a classifieds site such as Craigslist or Gumtree for an apartment or house for rent with a fantastic description and pictures taken from other adverts or other websites. The victim contacts the scammer in order to secure a viewing, but is told that in order to do so they must go to a Western Union outlet, do a money transfer to a relative for the amount of the deposit and then provide a scanned receipt. Ostensibly this is to prove that the victim can afford the deposit before they view the apartment, and they'll get the money back after the viewing. But in actuality the property may or may not actually exist, and the receipt allows the scammer to collect the funds without any viewing ever taking place.
Alternatively, the scammer forwards a rental application, or asks for information typically given on a rental application, such as driver's license number, bank account information, Social Security Number, etc.
In the United Kingdom, bona vacantia is ownerless property which has passed to the Crown. This property is administered by the Bona Vacantia Division of the Treasury Solicitor's Department. Fraudulent emails and letters, claiming to be from this department, have been reported which inform the recipient that they are the beneficiary of a legacy but requiring payment of a fee before sending more information or releasing the money.[44]
A new scam targets people who have posted their resumes on job sites. The scammer sends a letter with a falsified company logo. The job offer usually indicates exceptional salary and benefits and requests that the victim needs a "work permit" for working in the country and includes the address of a (fake) "government official" to contact. The fake "government official" then proceeds to fleece the victim by extracting fees from the unsuspecting user for the work permit and other fees. A variant of the job scam recruits freelancers seeking legitimate gigs (such as in editing or translation), then offers "pre-payment" for their work.
Many legitimate (or at least fully registered) companies work on a similar basis, using this method as their primary source of earnings. Some modelling and escort agencies will tell applicants that they have a number of clients lined up, but that they require a "registration fee" of sorts to account for processing and marketing expenses, or so it is claimed, which is paid in a number of untraceable methods, most often by cash; once the fee is paid, the applicant is informed that the client has cancelled, and thereafter they never contact the applicant again.
A foreign student, doctor, etc. contacts a landlord seeking accommodation. Once the terms are negotiated, a forged check is forwarded for a greater amount than negotiated. Then some emergency comes up where some part of the amount is requested to be urgently wired back. The reverse may also happen, where a scammer posts an accommodation, and requests monies be wired as deposit. The victim arrives to discover they have no accommodation.
Attorneys that do collections often practice based on contingency. The attorney is contacted by a scammer posing as a representative of a large international firm headquartered in another country. The scammer states that the company has no legal representation in the attorney's state, and needs to collect a debt from a company in that state. Scammer requests attorney email standard retainer agreement. This is commonly done, so attorney emails agreement, scammer signs and returns, and informs attorney that because legal representation has been obtained, the debtor has agreed to pay the debt by the end of the month. Red flag #1 is when the scammer requests attorney not contact the debtor company because the client wishes to maintain a working relationship with the debtor, saving litigation as a last resort. The attorney is instructed to contact the debtor only if the promised payment isn't made on the promised date. On the promised date, the huge check is delivered to the attorney, who deposits in the law firm trust account, keeps the attorney's contingency fee, and sends the rest to the scammer. Red flag #2 is that the scammer will request the money be wired to a foreign country, or insists on quick remittance. Sophisticated scammers will file articles of organization with both states, build web sites, and purchase prepaid cell phones with local phone numbers with scammers posing as both client and debtor. All of that can be done cheaply and easily on the internet.
A "business" contacts you saying that your computer is running slow or is infected with malware. They will then direct you to a website and download some software, this software can take many forms including allowing the scammer to gain access to your computer in order to find personal information and bank details.
Estimates of the total losses due to the scam vary widely. The Snopes website lists the following estimate:
| “ | The Nigerian scam is hugely successful. According to a 1997 newspaper article: "We have confirmed losses just in the United States of over $100 million in the last 15 months," said Special Agent James Caldwell, of the Secret Service financial crimes division. "And that's just the ones we know of. We figure a lot of people don't report them."[8] | ” |
Although the "success rate" of the scam is hard to gauge, some experienced 419 scammers get one or two interested replies for every thousand messages. Stephanie Nolen of The Globe and Mail said that an experienced scammer can expect to make at least several thousand dollars per successful scam letter.[45]
Since 1995, the United States Secret Service has been involved in combating these schemes. The organization doesn't investigate unless the monetary loss is in excess of 50,000 US Dollars. However, very few arrests and prosecutions have been made due to the international aspect of this crime.
In 2006, a report by a research group concluded that Internet scams in which criminals use information they trick from gullible victims and commonly strip their bank accounts cost the United Kingdom economy £150 million per year, with the average victim losing £31,000.[46]
Nelson Sakaguchi, a director at the Brazilian bank Banco Noroeste, transferred hundreds of millions of US$ to Chief Emmanuel Nwude, Nigeria's most accomplished scammer.[47] The scam led to at least two murders, including that of one of the scammers, Mr. Bless Okereke. The scam was the third biggest in banking history, after Nick Leeson's activities at Barings Bank, and the looting of the Iraqi Central Bank following the March 2003 US invasion.[47]
In 2008, an Oregon woman, Janella Spears, lost $400,000 to a Nigerian advance-fee fraud scam, after an e-mail told her she had inherited money from her long-lost grandfather. Her curiosity was piqued because she actually had a grandfather whom her family had lost touch with, and whose initials matched those given in the e-mail. Spears sent hundreds of thousands of dollars over a period of more than two years, despite her family, bank staff and law enforcement officials all urging her to stop.[48][49]
Victims, in addition to having lost large sums of money, often also lose their ability to trust. The 419 Eater website says, "Although there is no serious physical injury, many victims of con-men speak of the betrayal as the psychological equivalent of rape". Victims may blame themselves for what has happened, resulting in overwhelming guilt and shame. If the victim has borrowed money from others to pay the scammer, these feelings are magnified. Further compounding the problem is the public opinion of scam letters and scam victims. Scam letters are often viewed as humorously moronic, and the people who fall for them equally so. The victim, having lost money through the scammer's manipulation of payment methods such as money orders or checks, may become distrustful of the financial system. Scam victims may stop trusting and giving money to churches, legitimate charities and, in the extreme, even service providers such as their electric company because of their requests for money. Some victims commit suicide.[50][51]
In other cases, the victim continues to contact the scammer after being shown proof that they are being scammed or even being convicted of crimes relating to the scam, having been drawn so deeply into the web of deception that their trust in what the scammer tells them overrides everything else in their life.[64] Such victims are easy prey for future scams, digging themselves even deeper into financial and legal trouble.
In 2004, fifty-two suspects were arrested in Amsterdam after an extensive raid.[65] An Internet service provider noticed the increased e-mail traffic. None were jailed or fined, due to lack of evidence. They were released in the week of 12 July 2004.
On 8 November 2004, Nick Marinellis of Sydney, Australia, was sentenced to 4 1⁄3 to 5 1⁄4 years for sending Nigerian 419 e-mails.[66]
In October 2006 the Amsterdam police launched Operation Apollo to fight Internet fraud scams operated by West Africans and notably Nigerians. Following this investigation police have arrested eighty suspects, most of them from Nigeria, and seized from their homes lists of e-mail addresses, as well as fake documents. On 16 June 2007, 111 people were arrested for being in the Netherlands illegally and suspicion of fraud, although their implication with the e-mail scams is yet unknown.[67]
Authorities in Nigeria have been slow to take action and for many years nothing was done. Nigeria has a reputation for criminals being able to avoid convictions through bribery and rumours abounded of official connivance in the scams.[68] In 2003 however the Economic and Financial Crimes Commission (EFCC) was charged with tackling the problem.[69] A couple of success stories including convictions in a large 419 case were reported in 2005.[70]
Edna Fiedler, 44, of Olympia, Washington, on 25 June 2008, pleaded guilty in a Tacoma court and was sentenced to 2 years imprisonment and 5 years of supervised release or probation in an Internet $1 million "Nigerian check scam." She conspired to commit bank, wire and mail fraud, against US citizens, specifically using the Internet, and by having an accomplice ship her counterfeit checks and money orders from Lagos, Nigeria, last November. Fiedler shipped out $ 609,000 fake check and money orders when arrested and prepared to send additional $1.1 million counterfeit materials. The US Postal Service recently intercepted counterfeit checks, lottery tickets and eBay overpayment schemes with a face value of $2.1 billion.[71][72]
In March 2009, agents from Spain's technological investigation squad, UDEF Central, arrested 23 people who were accused of defrauding 150 people in both the United States and Europe. According to the police, the suspects sent out 20,000 scam e-mails per day[73] and had a list of the e-mail addresses of 55,000 potential victims in their possession.[74]
In October 2009, the Nigerian government announced that they are launching "Operation Eagle Claw", a joint effort with Microsoft to apprehend Nigerian 419 scammers.[73]
Victims of the fraud sometimes fall directly into crime by borrowing or stealing money to pay the advanced fees, believing an early payday is imminent. Credit-card fraud, check kiting, and embezzlement are among the crimes committed to pay the advances, with an expectation of having the money to repay the unauthorized loans.
Various groups and individuals have engaged against "419" frauds by making scammers lose their time or some amount of money[85] One widely propagated report of such a scam baiting involved an American who identified himself as "James T Kirk" to a Nigerian completely unaware of the Star Trek television series.[5]
These terms are common words in the Nigerian pidgin English.
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