Advance-fee scam. History

Advance-fee scam

An advance-fee scam is a form of fraud and one of the most common types of confidence tricks. The scam typically involves promising the victim a significant share of a large sum of money, in return for a small up-front payment, which the fraudster requires in order to obtain the large sum. If a victim makes the payment, the fraudster either invents a series of further fees for the victim or simply disappears.

Federal Bureau of Investigation (FBI) 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 419 scam (also known as the Nigerian Prince scam), the Spanish Prisoner scam, the black money scam, Fifo's Fraud and the Detroit-Buffalo scam. The scam has been used with fax and traditional mail, and is now prevalent in online communications like emails.

While Nigeria is most often the nation referred to in these scams, they originate in other nations as well. In 2006, 61% of internet criminals were traced to locations in the United States, while 16% were traced to the United Kingdom, and 6% to Nigeria. Other nations known to have a high incidence of advance-fee fraud include: Ivory Coast, Togo, South Africa, the Netherlands, Spain, Poland and Jamaica. The number " 419" refers to the section of the Nigerian Criminal Code dealing with fraud, the charges and penalties for offenders.

History

The modern scam is similar to the Spanish Prisoner scam which dates back to the late 18th century. In that con, businessmen were contacted by an individual allegedly trying to smuggle someone that is connected to a wealthy family out of a prison in Spain. In exchange for assistance, 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 centuries, as a very similar letter, entitled " The Letter from Jerusalem", is seen in the memoirs of Eugè ne Franç ois Vidocq, a former French criminal and private investigator. Another variant of the scam, dating back to circa 1830, appears very similar to what is passed via email 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, ^[19] and became popular during the 1980s. There are many variants of the letters sent. One of these, sent via postal mail, was addressed to a woman's husband, and inquired about his health. It then asked what to do with profits from a $24. 6 million investment, and ended with a telephone number. ^[20]

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. While Nigeria is most often the nation referred to in these scams, they may originate in other nations as well. For example, in 2006, 61% of Internet criminals were traced to locations in the United States, while 16% were traced to the United Kingdom and 6% to locations in Nigeria. Other nations known to have a high incidence of advance-fee fraud include Ivory Coast, Togo, South Africa, the Netherlands, and Spain.

One reason Nigeria may have been singled out is the apparently comical, almost ludicrous nature of the promise of West African riches from a Nigerian prince. 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. " Nevertheless, Nigeria has earned a reputation for being at the center of email scammers, and the number 419 refers to the article of the Nigerian Criminal Code (part of Chapter 38: " Obtaining property by false pretenses; Cheating" ) dealing with fraud.

They refer to their targets as Maga(s), slang developed from a Yoruba word meaning " Easy Target or Fool" and referring to gullible people in general. Some scammers have accomplices in the United States and abroad that move in to finish the deal once the initial contact has been made.