Advance Fee Fraud

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https://tinyurl.com/BlueOceanMW Advance fee fraud is a type of confidence trick where victims are persuaded to pay upfront fees for promised goods, services, or financial gains that never materialize. This form of scam has existed for centuries but has become more prevalent with the rise of electronic communications.[1][2]

Overview[edit]

Advance fee fraud typically involves a fraudster offering a substantial benefit to the victim, such as a large sum of money, in exchange for a small upfront payment. The fraudster often claims this fee is necessary to cover processing costs, taxes, or other expenses. Once the victim pays, the fraudster either invents further fees or disappears entirely.

The U.S. Federal Bureau of Investigation (FBI) defines advance fee fraud as occurring "when the victim pays money to someone in anticipation of receiving something of greater value—such as a loan, contract, investment, or gift—and then receives little or nothing in return".

Common Variants[edit]

  • Nigerian Prince Scam (419 Scam): Named after Section 419 of the Nigerian Criminal Code, this variant often involves emails claiming to be from Nigerian royalty or officials seeking help to transfer large sums of money.
  • Lottery Scams: Victims are told they've won a lottery but must pay fees to claim their prize.
  • Employment Scams: Fraudsters offer fake job opportunities requiring upfront payments for training or equipment.
  • Romance Scams: Scammers build online relationships and then request money for various emergencies or travel expenses.
  • Mobile Tower Installation Fraud: Common in India and Pakistan, this scam promises rental income for allowing mobile towers on one's property, requiring various upfront fees.

Characteristics[edit]

Key features of advance fee fraud include:

  1. Unsolicited communications
  2. Promises of large sums of money or significant benefits
  3. Requests for upfront payments
  4. Use of official-sounding language and fake documents
  5. Pressure to act quickly and maintain secrecy

Prevalence and Impact[edit]

Advance fee fraud is a global issue, with the United States and Great Britain receiving about 50% of such communications. In 2019, the FBI reported 14,607 U.S. victims of advance fee scams, with losses totaling over $3.5 billion.

Prevention and Countermeasures[edit]

To combat advance fee fraud, various measures have been implemented:

  • Government action: Nigeria established the Economic and Financial Crimes Commission (EFCC) in 2004 to fight such crimes.[3]
  • Technology: Nigeria's EFCC adopted Microsoft's "Eagle Claw" technology in 2009 to track fraudulent emails.
  • Public awareness: Governments and organizations issue warnings and educational materials about these scams.
  • Scam baiting: Some individuals engage scammers in dialogue to waste their time and reduce their capacity to target actual victims.

Legal Considerations[edit]

Advance fee fraud is illegal in most countries. In the United States, it falls under various fraud statutes and can result in significant fines and imprisonment.

References[edit]

  1. Advanced Fee Fraud. Washington State Attorney General.
  2. Advance Fee Fraud. U.S. Securities and Exchange Commission.
  3. Nigerian Advance Fee Fraud Article. New York Assembly.