The 419 Nigerian scam is a type of fraud that involves a confidence trick. Usually, the victims in this type of scam are promised a significant share of money if they are willing to make an upfront payment so that this money can be obtained. If this payment is made, then the fraudster will usually continue to invent various fees that the victim pays, and then suddenly disappear later on.
While the term 419 Nigerian scam is the most commonly used, it is also known under a few other names. These include the Detroit-Buffalo scam, the black money scam, the Spanish prisoner scam, Fifo’s fraud, and advance fee fraud. Traditionally, the scam would use traditional mail and faxes for communication. Today, it uses email, private messages, Skype and other forms of digital online communication.
The fraud happens in many countries across the world. Our country is a particular target, but so are Spain, the Netherlands, South Africa, Togo, Ivory Coast, Nigeria and the United Kingdom. The reason why the scam is referred to as 419 is because it violates section 419 of the Nigerian Criminal Code.
Information from the US Secret Service
The US Secret Service has released a great deal of information about 419 schemes and how to protect yourself from them. They have particularly listed some of the tactics that are commonly employed in these types of fraud. These tactics include:
• Sending written communication (digital or physical) by someone claiming to be an official representation of a foreign agency or government.
• Offering to transfer several million dollars using ‘over invoiced contracts’.
• Asking the victim to travel overseas in order for the transaction to be completed.
• Asking the victim to send bank account information, blank letterheads and other types of contact information.
• Sending a variety of documents that look official thanks to seals, stamps and logos that could testify to the proposal being authentic.
• Asking for advance or up front fees to pay for attorneys, taxes, bribes and transactions.
The Secret Service also warns that the 419 scam no longer follows the standard format of a Nigerian uncle or other such story. Rather, they now often include paper currency conversions, wills, crude oil purchases and real estate ventures. The scam adapts whenever a certain backstory becomes known to be fraudulent.
An Overview of the 419 Nigerian Scam
Legally, this type of scam is known as Advance Fee Fraud (AFF), although numerous countries now use the “419 Nigerian scam” terminology. While the vast majority of people have now heard of these types of scams, and it seems incredibly naive to fall for the tactics that are being used, a surprising number of people are still victimized each year, leading to huge financial losses. This is mainly because the story always changes, as described by the Secret Service. A lot of people now believe that, so long as they don’t send their bank account details, they will be safe from this type of fraud, but that is also not necessarily the case. In fact, those that do hand over their bank account details usually don’t have their accounts plundered, but they become known among fraudsters as being more gullible than others.
Whatever the story is that is used in the scam, it tends to meet a number of criteria. Often, there is a real sense of urgency in the message itself. Additionally, it is emphasized that the transaction must remain confidential.
It has been found that the majority of 419 Nigerian scam stories fall into one of the following categories:
• Contract fraud
• Disbursement of wills
• Conversion of hard currency
• Purchase of real estate
• Sale of crude oil
• Transfer of funds
The fund transfer scam is the most common and successful of all AFFs. Here, an individual or a business will receive unsolicited mail from someone in Nigeria, who claims to be a high ranking civil servant. The recipient will be told that he requires a foreign bank account into which he wants to deposit several million dollars. The money, so the letter will state, have been obtained through an above-board procurement contract or over-payment.
Fraudsters are able to find the details of possible victims through a range of different sources. This includes professional directors, trade journals, commercial libraries and newspapers. They usually don’t target just one company or individual, but rather send out thousands of letters at the same time. In most cases, the fraudster will say they are employed by the Nigerian National Petroleum Corporation, although other ministries in Nigeria are also used.
In the letter, the fraudsters will include details of previous investigations and correspondence that aims to show where the money came from. It will state that they do not want to return the money to the government, but that they want to transfer it into a foreign bank account instead. Usually, the amount ranges from $10 million to $60 million. A commission of around 30% will be offered.
The victims will then be given instructions where they will be asked for pro forma invoicing sheets and company letterheads. The fraudster will say that this is to prove to Nigerian officials that the contract will be completed. In actual fact, they ask for these letterheads so that they can convince other victims that they are genuine. They may also use them to create false letters of recommendation, so that they are able to seek a travel visa to this country from the Lagos American Embassy. Meanwhile, the victim is told that the letters have been sent to the Central Bank of Nigeria for approval and that the funds will soon appear in their account.
The fraudster tries to delude the victims into believing that they are now part of an arrangement that may be questionable, but that is very lucrative as well. The victims have to be regularly reassured so that they feel confident in the outcome of the deal. They will actually become financial supporters of the scheme and are often willing to pay large sums of money because they believe the deal will go through. New requests for funds will be made again and again by the fraudster, who will by then have the victim believing that everything will fall through if they do not pay up. Of course, there is no deal at all, so they are simply out of pocket.
If you have ever read a 419 Nigerian scam letter, you will probably have seen it as incredibly transparent and possibly even ridiculous. Yet, the number of people who have been victimized by it is constantly growing. In fact, there are now even schemes within a scheme when it comes to this particular scam. And, because the fraudster will send the letter out to thousands of people, only one person has to be gullible enough to fall for it in order for the scam to be successful.
In most cases, victims will at some point be asked to travel either to Nigeria or to one of its bordering countries. They will be told that they have to go to a bank in order to complete the transaction. They will usually be told that there is no need for them to apply for a visa, as their Nigerian contact will simply bribe the officials to let them through. In reality, however, entering Nigeria without a visa is actually a very serious offense. In all likelihood, the fraudster will then use this as leverage to actually force the victims into making even more payments. An example of this happened in June of 1995, when an American was murdered in Lagos after pursuing a 419 scam. Many other foreign nationals have also bee reported missing.
One of the reasons why this scam is so successful is because it looks so genuine, even if the message seems ridiculous. The information is often printed on official documentation, including logos and seals. The contacts are often proven to be credible, which convinces a victim that the fraudster actually has influence over government officials. Unfortunately, however, these credentials are all fake.
If the victims continue to believe in the scam, they will usually be confronted with an ‘inside man’ problem. This means that some sort of official will ask for a bribe, or a fee or tax that wasn’t expected suddenly shows up. The victims will then be convinced to pay these fees before they can receive their money. These fees will mount up and will start including attorney fees, taxes, oversights and more. In so doing, the fraudster can stretch the scheme out over months, collecting more and more money from the victims, who are actually willingly transferring funds.
Over recent years, 419 Nigerian scams have increased dramatically. There are many different reasons for this. According to the government in Nigeria, the inherent poverty and high levels of unemployment in the country give rise to more fraudsters who are trying to obtain money from anywhere. However, they also believe foreigners are greedy and that this is leading to people trying to take advantage of this, as they are also caught up by the ‘get rich quick’ syndrome. It is known that hundreds of millions of dollars are lost through these types of scams, and many victims are too embarrassed to go to the authorities and explain what has happened to them.