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nigeria-scam

What Is the Nigerian Scam?

The Nigerian Letter scam, also known as advance fee fraud or 419 fraud, is a scheme in which a sender requests help facilitating the illegal transfer of money. The letter may be sent by mail, fax, or email—the most common method. The author is typically a self-proclaimed government or military official who explains they need access to a foreign account to transfer money out of Nigeria.

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In exchange, the sender offers the recipient a commission—sometimes up to several million dollars, depending on the perceived gullibility of the target. The scammers then request money to pay for some of the costs associated with the transfer, such as taxes, legal fees, and bribes to government officials. If the scammers are successful in receiving money, they will either disappear immediately or try to get more money with claims of additional transfer problems.

KEY TAKEAWAYS

  • The Nigerian Letter scam is a scheme, generally done via email, where a sender offers a commission to someone to help transfer a large sum of money. 
  • Nigerian scammers hope the commission offered will be enticing enough to compel recipients to send thousands of dollars to a stranger.
  • The reasons given for the transfer can differ from a government freezing an account to an inheritance with no beneficiary.
  • Nigerian Letter scams are also known as advance fee fraud or 419 fraud. 
  • The name stems from the prevalence of these scams in Nigeria during the 1990s. 

How a Nigerian Scam Works

This specific type of scam is generally referred to as the Nigerian scam because of its prevalence in that country, particularly during the 1990s. There is a section of the Nigerian Criminal Code Section 419 that makes this type of fraud illegal. However, this scam is not limited to Nigeria and is also perpetrated by various organizations in countries around the world.

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The origins of this scam are widely debated with some suggesting it started in Nigeria during the 1970s, while others suggest its origins go back hundreds of years to other confidence scams, such as the Spanish Prisoner scam.

Special Considerations

The Nigerian scam was initially conducted by phone, fax, and traditional mail. The proliferation of email provided a new route for the Nigeran scam. Warning signs that a message might be a scam include mention of a U.S. currency account in a foreign country, the promise of substantial compensation for little effort—and typos, grammatical errors, and unusual syntax.

Requirements for a Nigerian Scam

Nigerian scammers hope the commissions they offer will be enticing enough to compel recipients to risk sending thousands of dollars to a stranger. The scammer may say the transfer is needed because the government is trying to freeze (or confiscate) their accounts, or that the money is otherwise hostage to war, corruption, or political unrest. The person might say they desperately need your bank account number to transfer the money for safekeeping.

Of course, when it comes to this type of request, remember that if anything sounds too good to be true, it usually is. Nigerian scams continue to exist because it only takes a handful of people—out of hundreds of thousands of attempts—to be fooled to make it worth the scammers’ time and effort.

How to Avoid Nigerian Letter or 419 Fraud

The U.S. Federal Bureau of Investigation (FBI) recommends the following tips for avoiding this type of fraud:

  • If you receive a letter or email from Nigeria (or any other country) asking for personal or banking information, do not reply in any manner. Forward the letter to the U.S. Secret Service, your local FBI office, or the U.S. Postal Inspection Service. You can also register a complaint with the Federal Trade Commission’s Complaint Assistant.
  • Be skeptical of people stating they are Nigerian or other foreign government officials asking for your help moving large sums of money to overseas bank accounts.
  • Do not believe in the promise of large sums of money for your cooperation.
  • Always guard your account information carefully.
  • If you know someone who is corresponding with a scammer, encourage that person to contact the FBI or U.S. Secret Service as soon as possible.
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While many people recognize these and other types of scams, remember that criminals only have to find a few gullible people to make their time worthwhile. If you know anyone who may be vulnerable to fraud—for example, your aging parents—be sure to explain how scams work and how they can be avoided.

What is the Nigerian Romance scam?

In a romance scam, a type of catfishing, a criminal adopts a fake online identity to gain a victim’s trust and affection. The scammer uses the guise of a romantic relationship to manipulate and/or steal from the victim. The criminal may propose marriage and make plans to meet in person, but that never happens. Eventually, the scammer asks for money.

According to a study from tech and cyber safety company TechShielder, Nigeria is the second most notorious county worldwide for romance scams, behind only the Philippines.

What is an advance fee scam?

An advance fee scam happens when a victim pays money to a fraudster who has promised something of greater value in return—such as a gift, contract, loan, or an investment. The victim, of course, receives little or nothing, even if they cooperate with the scammer’s demands.

The Nigerian Letter scam is an example of an advance fee scam because the victim is promised a cut of a large sum of money in exchange for providing banking details and making upfront payments.

Article Source: investopedia.com

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