One of most known types of Internet frauds in recent years are Advance Fee Frauds. This type of scams try to use good will of victims and persuade them to advance relatively small sums of money in the hope of realizing a much larger gain. Most common type of scam are the Nigerian Letter or 419 fraud.

The number “419″ refers to the article of the Nigerian Criminal Code dealing with the fraud and The American Dialect Society has traced the term “419 fraud” way back to 1992. So, as you can see this problem is not new.

One of earliest types of this scams are called the Spanish Prisoner fraud, back in early 1900s, where the fictional prisoner promise to share non-existent treasure with the person who would send them money to bribe their guards.

In modern variant of this scam a self-proclaimed relative of a deposed African dictator offers to transfer millions of dollars into the bank account of the mark in return for small initial payments to cover bribes and other expenses.

Also this type of Nigerian scams can vary in tactics and so far following methods have been spotted:

Disbursement of money from wills, Contract Fraud (C.O.D. of goods or services), Purchase of Real Estate, Conversion of Hard Currency, Transfer of funds from over invoiced contracts, Sale of crude oil at below market prices.

Tactics

The Nigerian 419 scams use the following tactics:

• An individual or company receives a letter, fax or email from an alleged official representing a foreign government or agency- An offer is made to transfer millions of dollars in “over invoiced contract” funds into your personal bank account
• You are encouraged to travel overseas to complete the transactions
• You are requested to provide bland company letterhead forms, banking account information and telephone/fax numbers
• You receive numerous documents with official looking stamps, seals and logos testifying to the authenticity of the proposal
• Eventually you must provide up front or advance fees for various taxes, attorney fees, transaction fees or bribes

Typical email

Typical email looks like this:

From: andrewcollins_03@peoplepc.com
andrewcollins_chambers@yahoo.com

BARRISTER ANDREW COLLINS
ANDREW COLLINS CHAMBERS.
PLOT 1855 AJAO ESTATE, LAGOS NIGERIA..

I am Barrister Andrew Collins, a solicitor at law. I am the personal attorney to late Mr. Mark, a national of your country, who used to work with Julius Berger construction Company in Nigeria. Hereinafter shall be referred to as my client. On the 27th of January 2002, my client, his wife and their only daughter were involved in a Bomb Blast in Idumabgo-Lagos Island.

All occupants of the in building unfortunately lost there lives. Since then I have made several enquiries to your embassy here to locate any of my clients extended relatives, this has also proved unsuccessful. After these several unsuccessful attempts, I decided to track his last name over the Internet, to locate any member of his family hence I contacted you.
I have contacted you to assist in repatriating the fund valued at US$7.5million left behind by my client before it gets confiscated or declared unserviceable by the AFRICAN DEVELOPMENT BANK GROUP (ADBG), where this huge amount were deposited. The said bank has issued me a notice to provide the next of kin or have the account confiscated within the next fourteen official working days.

For the fact that I have been unsuccessful in locating the relatives for over some years now, I seek your consent to present you as the next of kin to the deceased, since you have the same last name with my client, so that the proceeds of this account can be paid to you. Therefore, on receipt of your positive response, we shall then discuss the sharing ratio and modalities for transfer.

I have all necessary information and legal documents needed to back you up for claim. All I require from you is your honest cooperation to enable us see this transaction through. I guarantee that this will be executed under legitimate arrangement that will protect you from any breach of the law.

Best Regards,
Barrister Andrew Collins.

The criminals always represent as official representatives, lawyers or members of Nigerian Ministries and many of them 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 will often find that all pieces fit perfectly together. Such scammers can often lure wealthy investors, investment groups, or other business entities into scams resulting in multi-million dollar losses.

If the victim agrees to the deal, the other side first send several documents with official government stamps, seals etc., and then introduce a delay or monetary hurdle that prevents the deal from occurring as planned, such as “in order to transmit the money, we need to bribe a bank official. Could you help us with a loan?” or “In order for you to be allowed to be a party to the transaction, you need to 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 will be covered several times over by the payoff. Sometimes psychological pressure is added by claiming that the Nigerian side, in order to pay certain fees, had to sell all belongings and borrow money on their house, or by pointing out the different salary scale and living conditions in Africa compared to the rest of the world.

In any case, the promised money transfer never happens. The money or gold does not exist, and by the time the victim realize this, usually after being confronted by a third party who has recognized the scam, they 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.

In all those criminals, senders of those emails, are located in Internet cafes equipped with satellite Internet. Many shady cybercafes in Nigeria, Lagos and other African countries that serve scammers; many cybercafes 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.

One of most known cases of such scam involved a forged signature of Nigerian President Olusegun Obasanjo in summer 2005. After that 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.

There are significant number of websites trying to inform about those scams and provide help in recognizing basic types, methods and schemes. Some of them even trying to keep the updated list of known names of Nigerian representatives signed in scam emails as well as typical emails spotted in the wild.

Variants

Variants of advance fee fraud schemes can be:

Fake cheques and cheque cashing scams - Fraudulent cheques 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.

Shipping/Receiving Scam with Variant Pet Adoption - Variant of a money scam using pet adoptions, person will respond to an advertisement for a pet. The buyer will then want to immediately make arrangements to receive/ship the pet. Buyer will ask seller to use their pet shipping service and even give a number.

Hacked E-mail - Scammers have been known to break into an e-mail account, change the password and then send a letter titled “Emergency” to everyone in the e-mail list, purporting to come from the person whose e-mail address it is.

Fake Web sites - some scammers enhance the believability of their offer through the use of a sham website. Such websites can imitate real sites such as eBay, PayPal or a banking site like Bank Of America for the purposes of phishing, while others are totally fictional and used to lend credibility to a scammer’s story.

Romance scam - The victim is usually approached on an online dating service, on an Instant messenger (like Yahoo IM) or as has recently begun to occur social networking sites and they claim to have becomes interested in someone.

eBay seller scam - scam involves eBay or Craigslist and the appeal of high priced goods, usually electronics, for a bargain price. A seller will advertise an item, usually a digital camera, laptop computer, plasma TV, video game console, or cell phone at a very low cost, usually about 1/3 of the normal retail price. The body of the ad instructs buyers to contact the seller directly outside of eBay using a Yahoo or Hotmail web-based free e-mail account. When contact is made, the seller gives a long story about his problems receiving payment by Paypal - eBay’s payment arm and insinsting on sending the money by Western Union.

False online storefront scam - A website is set up offering too-good-to-be-true prices on popular goods (usually electronic goods such as laptop computers, digital cameras, video game consoles, and cell phones). For an undisclosed reason, payments can not be made using credit cards, money orders, cashier cheques, or even wire transfers, but only via untraceable means such as Western Union, Moneygram, or e-gold. The buyer pays the money, but never receives the goods, and is unable to reverse the transaction or sue the recipient.

Lottery scam - The lottery scam involves fake notices of lottery wins. The winner will usually be asked to send sensitive information to a free email account. The scammer will then notify the victim that in order to release the funds, some small fee (insurance, registration, shipping etc.) is required. Once the fee has been sent, the scammer will invent another fee and attempt to collect it.

Rental scams - where the victim (e.g. prospective tenant) is looking to rent accommodation, the scammer will post a classified advertisement offering a high-standard place for a low cost, even showing pictures of the said rooms. The victim is required to pay a deposit, but once the scammer has received the deposit he will disappear leaving the victim out-of-pocket.

Charity scams - 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.

Consequences

Main consequence of 419 fraud are monetary loss. Most of the victims end up with loss of huge amount of money on their bank accounts. Back in 1997 newspapers reported that over $100 million dollars has been lost in such scams. In 2006 research groups reported that criminals stole about £150 million per year, with the average victim losing £31,000 in the United Kingdom. As some studies conclude that success rate of the scam is hard to measure but experienced 419 scammers usually get one or two interested replies for every thousand messages. Also, an experienced scammer can manage to make several thousand dollars per month.

Beside monetary loss there were some cases of physical harm or death, when victims tried to travel to Nigeria and investigate the situation, kidnapping, murders and suicides and emotional harm of course.

In most cases law systems are incapable of doing anything to return of stolen money but there were some arrests and trials for scamers in Europe and Australia. However authorities in Nigeria are slow to take action and for many years nothing was done until 2003 when Economic and Financial Crimes Commission decided to take care of the problem. Until 2005 there were couple successful stories including convictions in a large 419 case.

The best protection is awarenes about this type of scams and caution when receiving email from unknown senders.
Double check sources, email addresses, do not open suspicious or unsolicited emails, never reply to a spam email, never send your personal, credit card or online account details through an email.

If you received a Nigerian scam offer you should report them and spread the word to your friends, family and colleagues to be be aware about this scheme.