Advance-fee scams continue to be a major problem and have spawned many other variations of scams that target individuals via phone, social media, email, fax, text message, and snail mail. Advance-fee scams date back to the 1700s and are nothing new.
Back then, fraudsters would target businesses and tell them that they were trying to free a wealthy nobleman being held as a Spanish prisoner. They would ask the business owner to help finance the release of the prisoner, and, in return, they’d receive an enormous reward.
Nigerian advance-fee scams experienced a resurgence in the 1990s and early 2000s. Law enforcement referred to the scams as 419 scams because they originated in Nigeria. Also, according to the Nigerian criminal code, 419 scams violated the 419 section of the Nigerian criminal code.
Advance-Fee Scams Today
Today, scams can originate anywhere in the world, and the type of scam may vary. In Jamaica, there is now a highly profitable lottery scam that uses the same idea as the advance-fee scam:
You have won a large amount of money and only need to pay a small fee to process the payment and receive your winnings. The fees will continue to pile up until the victim runs out of cash or becomes wise to the fraud.
Though scams can start anywhere, Nigeria remains a center for internet and phone fraud. Millions are stolen every year by Nigerian scammers who impersonate people on dating sites and trick potential victims, who are looking for love, into wiring thousands of dollars to them. Romance scams are at the top of the most popular Nigerian scams.
Hallmarks of the Scam
The more traditional advance-fee scam is still an issue. Here at CallerSmart, we specialize in protecting individuals from phone scams, but it’s important to be aware of scams that target people via social media, email, text message, fax, and letter, too. Scam artists use various methods to get information, including email scams that include phishing.
Here are some of the tactics that advance-fee fraudsters use:
- You or your company receives a call, email, fax, or letter from someone who claims to be a government official, works with a government organization or is involved in crude oil.
- You receive a business proposition or situation and promised that if you help, you will receive a large sum of money deposited into your bank account. They may promise a payout of millions of dollars.
- Scammers ask you to pay for things throughout the process, such as taxes, attorney fees, transaction fees, and bribes. The con requires potential victims to pay via gift card, wire transfer, cashier's check, or money order.
- You are requested to provide your bank account information, credit card numbers or other account details along with blank letterhead forms and your phone number.
- You are encouraged to travel overseas to complete the transaction - again paying with cash or using a wire transfer, money order, or cashier's check.
Scam artists will switch up the story behind why they are contacting you. The most common schemes used in advance-fee schemes are over-invoicing of government contracts, the reduced sale price of crude oil, cash on delivery shipping of goods, real estate opportunities, will beneficiaries, and currency conversion. The most recent major Nigerian advance-fee fraud cases used a crude oil scheme to trick the potential victim.
Are Advance-Fee Scams Still a Problem?
One of the main reasons these scams still have success today, and why in recent years phone scams have become a huge issue, is because no one thinks it will happen to them. If it does, they won’t fall for it. In reality, it could very possibly happen to you, and you might fall for it. It’s something that happens to millions of Americans each year and collectively scams people out of billions of dollars.
Signs that you’re dealing with an advance-fee schemer include the following:
- Too good to be true - if something seems too good to be true, then it probably is.
- Illegal - along with too good to be true, the business proposition usually isn’t legal. The most common type of advance-fee scams takes on the scenario in which a government official realizes that the government has been over invoiced millions of dollars for a contract. Rather than return that money to the government, they’d like to move it into a foreign account. There are harsh consequences for financial crimes, even if you aren't the perpetrator.
- Urgency - scam artists will pressure you and say that the situation is very urgent. They want you to react quickly and not think about what you’re doing.
- Extreme confidentiality - the scammer doesn’t want you to talk about the scheme with friends or family - or talk about it on social media.
- Unexpected fees - the fact that the caller asks for money in the first place is a major red flag. Stop communication and block the person if someone requests you to send money via a wire transfer or cashier's check.
- Wire transfers - the request to wire money anywhere internationally. Once you send this money, you will not see it again.
- Claims of strong connections to high-level officials - the scammers want you to think that they are well-connected and claim ties to government officials and businesses that don’t exist. They try to back up the claims using forged, official-looking documents.
- Requests you to travel abroad - as a final step, the scammer asks you to travel to Nigeria or a surrounding country to complete the deal.
Scam artists access information about potential victims via the internet, stolen phone and mailing lists, and trade journals. They don’t go after one person at a time, but send out a barrage of letters, faxes, emails, text messages, and phone calls. The scammer will state that they have a business opportunity, from which the victim will profit greatly. The fraudster talks to the victim at length to learn more about them and to strike up a friendship. Once they feel that they’ve earned the trust of the victim, they will begin to request full contact information, bank account information, and blank company letterhead.
The scammers use the blank company letterhead to fool more victims into falling for the scam by creating letters of recommendation. They also use them to request U.S. tourist visas from the United States Embassy located in Nigeria.
Unlike many scams, the con artists don’t use bank account information to steal the money from the potential victim, but as a test for the scammer. If the person is willing to give out bank account information or other account details, he will likely pay unexpected fees and travel abroad, as a condition of the fraud scheme.
In the process of pulling off the business transaction, problems will arise. Someone that the scammer had “helping them out” will demand money or be uncooperative, or the government will supposedly catch on to the plan, and people need to be paid off. These inconveniences will fall on the victim to pay. If the victim refuses to pay, the scammer can turn violent and threaten the victim and their family.
There is never a happy ending with fraud schemes, not even for the scammer, as countries are cracking down and combining forces to serve justice. The victim loses the most, though. It is unlikely that they will ever recover their money, leaving them financially ruined and with the guilt and shame of falling for a scam. Experts believe that the reported amount of money scammers steal is grossly inaccurate because many people do not file complaints.
What to Do if You've Been Targeted
If you, a friend, or a family member has received a letter, email, phone call, text message, or fax from Nigeria, do not respond to it. If you received a Nigerian letter, be sure to send it, along with any identifying information, to your local FBI field office and the U.S. Postal Inspection Service. Victims should file a report of other forms of contact via the U.S. Secret Service, the Federal Trade Commission's Complaint Assistant or the FBI's Internet Crime Complaint Center (IC3).
For phone numbers associated with advance-fee fraud, you can help warn others by downloading CallerSmart's app for unknown number lookups and leave your feedback. If you don't have an iPhone, you can still use our community phone book for unknown call tracing and leave your feedback to let others know about potential scams.