The Nigerian scam or Advance Fee scam is popularly called "419" (Four-One-Nine) after the section of the Nigerian Criminal Code that deals with fraud. The scam historically been used with fax and regular postal mail, but it is now prevalent with email and the internet.
While Nigeria has become known for this type of scam and the scam is populary called the Nigerian scam, its practice is not limited to Nigeria. The scam originates in other parts of the world including the United States, the United Kingdom, South Africa, the Netherlands, etc. There have been known instances of citizens of other countries sending scam letters which claim to be originating from Nigeria.
The Nigerian scam or 419 typically operates as follows:
An unsuspecting victim receives an unsolicited letter or fax from Nigeria that asks the victim to help in laundering money or performing some other illegal activity such as hiding funds that were received from "over-invoiced" or "double invoiced" oil or other supply and service contracts or a large amount of unclaimed money or gold which the sender cannot access directly. Typically the letter will claim to be coming from a high ranking government official or bank employee or even a refugee.
The amounts involved are usually in the millions of dollars, and victims are typically promised a large percentage of the money, typically ten to forty percent, in return for their part in helping to retrieve the money. There are several variations to this crime and known incidents have been very creative and range from the simplest of scams to very complicated structures
Some common variations of the scam include:
An inheritance is due to you.
Online sales / Fake cheques: A product that you have for sale is purchased and a cheque for an amount that is greater than the amount you asked for is sent to you and you are asked to cash the cheque and send the extra amount back to the scammer.
Email hijacking: Some scammers hack into email accounts and send email from the account to associates, friends, and family members of the legitimate account owner in order to convince them that the account owner is in some form of distress and needs money urgently.
Romance scams: Here the scammer meets a victim on an online dating website or a social networking site and pretends to be interested in the victim. The scammer may also send pictures of an attractive person to lure the victim and gain confidence, and eventually asks for money.
Proceeds from crude oil and other commodity deals.
Money cleaning (a large amount of currency needs to be cleaned before it can be used) and the cost of chemicals is required
With the typically 419 scam, at some point during the process, the victim is typically asked to transfer some amount of money to help in speeding up the process, so the deal can be completed quickly. These requests for transfer are typically called an "Advance Fee", "Transfer Tax", "Performance Bond", etc. Most of the time, false documents bearing official government stamps, and seals are sent to the vitims to convince them of the authenticity of the scam.
Victims find that if they pay any money, the scam artistes will claim that there are more steps that need to be taken and that these will require more advance payments. Some scammers also go after the victims of previous 419 scams. Sometimes, they contact a victim of a previous scam saying that they can track the scammer and recover the money that the victim had lost. Or they contact a victim to inform him or her that a fund has been set up by the Nigerian government to compensate victims of 419 fraud. They typically offer to help the victim pursue any of these options and charge an upfront fee.
Victims have found that they are typically unable to get their funds back due to the slow or non-availability of assistance from the Nigerian government. Also the doctrine of unclean hands cand make it tough for a victim because they have knowingly entered into a contract that was illegal. Also, victims can be tried and convicted of crimes themselves as sometimes they end up borrowing or stealing money to pay the advance fees.
If You Receive A Nigerian Scam Letter:
Do not respond to it. (If it sounds to good to be true then it probably is.)
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither NGEX nor any other independent provider is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein