Nigerian Advance Fee Scam
STEER CLEAR OF THE "419" ADVANCE FEE SCAM
New York State Attorney General issued a warning to New Yorkers to beware of scam artists that may target them in a scheme often referred to as the "Nigerian Advance Fee" scam.
Although the scam has been around for decades, it appears that the number of individuals falling prey to it is actually increasing. The scam, which goes by a number of names, has proliferated and even transformed over the years. The U.S. Secret Service - the federal agency that investigates these financial scams - estimates that it receives approximately 100 calls from victims and potential victims every day and 300-500 pieces of related correspondence per day.
The scam is often referred to as the "419" scam - so entitled after the section of the Nigerian penal code which addresses financial schemes. Since its inception it has changed forms in an attempt to lure in additional victims. Some of the reported scenarios are as follows:
- A so-called Nigerian governmental official is seeking assistance related to a procurement contract involving between $10 - $60 million. The official claims, through direct letters or e-mails to individuals targeted by the scam, that a contract awarded by a previous regime was over-invoiced and, rather than turning the money over to the new regime, wants to transfer the money into a foreign account. For this service - the disclosure of a bank account number - the so-called Nigerian official is offering a commission, usually up to 30 percent, for assisting in the transfer.
- Either an individual from Nigeria or a foreigner using a broker in Nigeria is attempting to buy an item, often a vehicle, that is advertised for sale in a newspaper or on the Internet. The buyer forwards a cashier's check to the seller for an amount greater than the purchase price. The seller is asked to forward the difference to the broker or use the difference to pay the shipping company after cashing the cashier's check. It isn't until a few days after the cashiers check is cashed, the money forwarded on, and the product shipped out, that the seller discovers that the cashier's check was counterfeit and his/her financial institution is charging them for the full amount.
- Other fraudulent business proposals from individuals in Nigeria follow a similar pattern as the procurement contract scam, but involve: disbursement of monies from wills; the purchase of real estate; conversion of hard currency; and the sale of crude oil at below market prices.
Consumers should be aware that these fraudulent offers prey upon the unequivocal promises of money and have resulted in individuals disclosing personal, identifying information and bank account numbers as well as making payments for purported taxes, registrations, attorneys' expenses or bribes for governmental officials.
The U.S. Secret Service estimates that consumers may be defrauded of hundreds of millions of dollars every year.
The outcomes have been devastating financially to many individuals, and in some cases have resulted in even more tragic harm. In 1995, an American was murdered in Nigeria while pursuing a "419" offer. Other foreign nationals in search of "419" riches are reported missing.
Consumers who receive these solicitations are strongly encouraged to report the incident and steer clear of the offer. Due to the international nature of the scam, consumers are directed to federal agencies to file complaints. Consumers who receive such solicitations should forward them to the Federal Trade Commission at www.ftc.gov or (877) 382-4357. Victims of these scams should contact the U.S. Secret Service at www.secretservice.gov or (202) 406-5572.
Consumers with questions about potential financial scams are encouraged to contact the Attorney General's consumer help line at (800) 771-7755.