Advance-fee scam
An advance-fee scam is a form of fraud and is a common scam. The scam works by promising the victim a large sum of money in return for a small upfront payment, which the fraudster claims will be used to obtain the large sum. If a victim makes the payment, the fraudster either invents a series of further fees for the victim to pay or simply disappears.
The Federal Bureau of Investigation states that "An advance fee scheme occurs when the victim pays money to someone in anticipation of receiving something of greater value – such as a loan, contract, investment, or gift – and then receives little or nothing in return." There are many variations of this type of scam, including the Nigerian prince scam, also known as a 419 scam. It is popularly known as "yahoo yahoo" in Nigeria. The number "419" refers to the section of the Nigerian Criminal Code dealing with fraud and the charges and penalties for such offenders. The scam has been used with fax and traditional mail and is now prevalent in online communications such as emails. Other variations include the Spanish Prisoner scam and the black money scam.
Although Nigeria is most often the nation referred to in these scams, they mainly originate in other nations. Other nations known to have a high incidence of advance-fee fraud include Ivory Coast, Togo, South Africa, the Netherlands, Spain, and Jamaica.
History
The modern scam is similar to the Spanish Prisoner scam that dates back to the late 18th century. In that con, businessmen were contacted by an individual allegedly trying to smuggle someone who is connected to a wealthy family out of a prison in Spain. The scammer promised to share money with the victim in exchange for a small amount of money to bribe prison guards.One variant of the scam may date back to the 18th or 19th century, as a very similar letter, entitled "The Letter from Jerusalem". This is illustrated in the memoirs of Eugène François Vidocq, a former French criminal and private investigator. Another variant of the scam, dating back to ca. 1830, appears very similar to emails today: "Sir, you will doubtlessly be astonished to be receiving a letter from a person unknown to you, who is about to ask a favour from you..." and goes on to talk of a casket containing 16,000 francs in gold and the diamonds of a late marchioness.
The modern-day transnational scam can be traced back to Germany in 1922 and became popular during the 1980s. There are many variants of the template letter. One of these, sent via postal mail, was addressed to a woman's husband to inquire about his health. It then asked what to do with profits from a $24.6 million investment and ended with a telephone number.
Other official-looking letters were sent from a writer who said he was a director of the state-owned Nigerian National Petroleum Corporation. He said he wanted to transfer $20 million to the recipient's bank account—money that was budgeted but was never spent. In exchange for transferring the funds out of Nigeria, the recipient would keep 30% of the total. To get the process started, the scammer asked for a few sheets of the company's letterhead, bank account numbers, and other personal information. Yet other variants have involved mention of a Nigerian prince or other member of a royal family seeking to transfer large sums of money out of the country—thus, these scams are sometimes called "Nigerian Prince emails".
The spread of e-mail and email harvesting software significantly lowered the cost of sending scam letters by using the Internet in lieu of international post. Although Nigeria is most often the nation referred to in these scams, they may originate in other nations as well. For example, in 2007, the head of the Economic and Financial Crimes Commission stated that scam emails more frequently originated in African countries or in Eastern Europe. Within the European Union, there is a high incidence of advance-fee fraud in the Netherlands and Spain.
The emails sent invariably feature a large number of implausible claims, as well as numerous spelling and grammatical mistakes. According to Cormac Herley, a Microsoft researcher, "By sending an email that repels all but the most gullible, the scammer gets the most promising marks to self-select." Responding to Herley, a director at Nigeria's National Security Adviser said that there are more non-Nigerian scammers claiming to be Nigerian, and suggested that Nigeria's reputation for corruption is part of the allure that makes scams seem more plausible. Nigeria has a reputation for being at the center of email scamming.
Modern variations include “sugar daddy/sugar momma” schemes, some of which involve advance-fee scamming, and money flipping, whereby the mark is promised a large amount of money in exchange for sending a small amount of money.
A 2018 study of Nigerian hip-hop culture found that glamorization of cyber-fraud is prevalent in such music. Some scammers have accomplices in the United States and abroad who move in to finish the deal once the initial contact has been made.
Motives
Many scammers tend to come from poorer and more-educated backgrounds, where Internet access and better education, along with inability to afford basic necessities, drive people into committing online fraud. They could also have been influenced by social media celebrities and artists who promote scamming as a "cool" trend to quickly gain access to luxury items like sports cars and fashion.In the case of Nigeria, the rise in scamming cases was due to a boom in cybercafes, a series of economic crashes from the 1980s, and the resulting joblessness among young people in Nigeria.
Implementation
This scam usually begins with the perpetrator contacting the victim via email, instant messaging, or social media using a fake email address or a fake social media account. The fraudster then makes an offer that would allegedly result in a large payoff for the victim.An email subject line may say something like "From the desk of barrister
Such people, who may be real people being impersonated by the scammer or fictitious characters played by the con artist, could include, for example, the wife or son of a deposed African leader who has amassed a stolen fortune, 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 traffic accident or a plane crash, 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, 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 cheques or bank drafts, and so on. The sums involved are usually in the millions of dollars, and the investor is promised a large share, typically ten to fifty percent, in return for assisting the fraudster to retrieve or expatriate the money. Although the vast majority of recipients do not respond to these emails, a small percentage do, enough to make the scam worthwhile as many millions of messages can be sent daily.
To help persuade the victim to agree to the deal, the scammer often sends one or more false documents that bear official government stamps, and seals. 419 scammers also often utilize fake websites and addresses to present themselves as more legitimate. Multiple "people" may write or be involved in schemes as they continue, but they are often fictitious; in many cases, one person controls all the fictitious personae used in scams.
Once the victim's confidence has been gained, the scammer then 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. This is the money being stolen from the victim; the victim willingly transfers the money, usually through some irreversible channel such as a wire transfer, and the scammer receives and pockets it.
Often but not always, delays and additional costs are added by the fraudster, always keeping the promise of an imminent large transfer alive, convincing the victim that the money the victim is currently paying would be covered several times over by the payoff. The implication that these payments will be used for white-collar crime, such as bribery, and even that the money they are being promised is being stolen from a government or royal/wealthy family, often prevents the victim from telling others about the "transaction", as it would involve admitting that they intended to be complicit in an international crime.
Sometimes psychological pressure is added by claiming that the scammers' side, to pay certain fees, had to sell belongings and mortgage a house or by comparing the salary scale and living conditions in their country to those in the West. Much of the time, however, the needed psychological pressure is self-applied: once the victims have provided money toward the payoff, they feel they have a vested interest in seeing the "deal" through. Some victims even believe they can cheat the other party, and walk away with all the money instead of just the percentage they were promised.
The essential fact in all advance-fee fraud operations is that the promised money transfer to the victim never happens because the money does not exist. The perpetrators rely on the fact that, by the time the victim realizes this, the victim may have sent thousands of dollars of their own money, sometimes thousands more that was borrowed or stolen, to the scammer via an untraceable and/or irreversible means such as wire transfer. The scammer disappears, and the victim is left on the hook for the money sent to the scammer.
During the course 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; the bank account information is not used directly by the scammer, because a fraudulent withdrawal from the account is more easily detected, reversed, and traced. Scammers instead usually 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 for using such money-sending services is that such wire transfers are irreversible and often untraceable. Further, these services are ideal because identification beyond knowledge of the details of the transaction is often not required, making receipt of such funds almost or entirely anonymous. However, bank account information obtained by scammers is sometimes sold in bulk to other fraudsters who wait a few months for the victim to repair the damage caused by the initial scam before raiding any accounts that the victim did not close.
Telephone numbers used by scammers tend to come from burner phones. In Ivory Coast, a scammer may purchase an inexpensive mobile phone and a pre-paid SIM card without submitting any identifying information. If the scammers believe they are being traced, they discard their mobile phones and purchase new ones.
The spam emails used in these scams are often sent from Internet cafés equipped with satellite internet connection. Recipient addresses and email content are copied and pasted into a webmail interface using a stand-alone storage medium, such as a memory card. Certain areas of Lagos, such as Festac Town, contain many cyber cafés that serve scammers; cyber cafés often lock their doors during certain times,, between 10:30p.m. and 7:00a.m., so that scammers inside may work without fear of discovery.
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. There, police seized thousands of Nigerian and non-Nigerian passports, 10,000 blank British Airways boarding passes, 10,000 United States Postal money orders, customs documents, false university certificates, 500 printing plates, and 500 computers.
The "success rate" of the scammers is also hard to gauge, since they operate illegally and do not keep track of specific numbers. One individual estimated that he sent 500 emails per day and received about seven replies, citing that when he received a reply, he was 70 percent certain he would get the money. If tens of thousands of emails are sent every day by thousands of individuals, it does not take a very high success rate to be worthwhile.
The success of advance fee crimes is based on the initial persuading of the victim. The FBI reported that in 2019 there were 14,607 US citizens that were victims of advance fee scams, which collectively represented in excess of $3.5billion worth of lost funds.