Advance-Fee Fraud

What is advance fee fraud?

Advance-fee fraud is a specific type of phishing scam that has recently become rather prevalent.  It asks the victim to provide the perpetrator with some amount of money, usually to help fulfill some other sort of financial transaction.  It usually also promises the victim a larger sum of money than what they paid when the transaction is done.  Of course, this is all a set-up, and not only does the victim lose their money, but they may also end up giving identity or financial information to a con artist who can then use it to impersonate them and/or steal more money.  Some victims of advance-fee fraud have even been lured to foreign countries, arrested, and thrown in jail.

One example of a form of advance-fee fraud targets people who sell items on e-commerce websites.  A fraudster will identify themselves as a wealthy businessperson or government official, usually from a foreign country, and offer to buy a product that someone is selling.  In order to do so, the fraudster will send the victim a fake cheque or international money order that is for a much higher amount than the item is worth, along with some sort of explanation as to why they cannot pay a smaller amount.  The fraudster then asks the victim to deposit the money in their bank account, and then send money equal to the difference between the cheque or money order's value and the item's value back to the fraudster.  It is only later that the victim finds out that the cheque or money order was fake, and the fraudster has swindled them out of their money.

The "Nigerian prince letter"

One of the most common forms of advance-fee fraud is known as the "Nigerian prince letter".  This is an email that comes from a fraudster identifying themselves as a royal family member or high-ranking government official from a politically-unstable country in Africa or the Middle East.  The fraudster says that they want to discreetly transfer their money out of the country, often in order to keep it from falling into the hands of the military or a rebel group that is trying to take over the country.  Sometimes, to make the ruse more convincing, the fraudster will even go so far as to provide a hyperlink in the email to a fake banking website, which displays a large amount of money supposedly being deposited.

The fraudster will ask the victim to provide their financial information so that the money can be temporarily transferred to their bank account for safe keeping.  The victim is also often asked to send money to the fraudster, supposedly to pay for taxes and other banking fees.  Finally, the fraudster will promise to leave some of the money that they transfer in the victim's account as a thank-you for their help.  Of course, this promise never ends up being honored, and the fraudster makes off with the victim's money and financial information.

How to avoid advance-fee fraud

Fortunately, many of the same techniques that can be used to steer clear of other types of phishing scams can be used to get around advance-fee fraud.  Here are some tips:

  • Look for common irregularities that are giveaways for phishing scams.  For instance, is the email addressed specifically to you, or to a generic mailing list (or does it begin with an unspecific greeting such as "dear friend" or "good day to you")?  Are there numerous obvious spelling or grammar mistakes?  Does the email directly ask you for money or financial information?  Does the email contain an attachment or suspicious-looking hyperlink that you are asked to open for more information?

  • Never respond to an email that makes any sort of request for money or personal information.  It is common business policy (if not general email etiquette) to never ask for financial information or money over email.

  • If the email is about buying an item that you're selling on an e-commerce website, ignore it.  You should only deal with people looking to buy your items directly on the e-commerce website itself (through its internal messaging system), and you should insist on them paying for your items through the website's secure payment system.  This ensures that the website that you're selling the item on has a record of the transaction, and can track down and take action against anyone who tries to scam you.

Alright!  Now you know what advance-fee fraud is, some common forms of it, and how to protect yourself against it.