Oldest Internet Scam — How to Avoid It

Go directly to the The Oldest Scam on the Internet (and How to Avoid It) Infographic!In a 2015 survey conducted by Adobe Systems, it was found that US workers, on average, spent 6.3 hours checking emails daily (with a 50/50 split between personal and professional messages).

How many emails do we receive each day where the average time spent reading, organizing, and responding to them is six hours? According to the Adobe survey, not only do people check their email during work, but before and after as well! Perhaps the real reason why so many of us are addicted to smartphones isn’t because they’re fun and helpful. Maybe it’s because we’re constantly waiting for an email to come through that will change our life.

Hypothetically speaking, if we’re getting enough email to fill up six hours each day, it’s safe to assume that not every sender is going to be someone we know. They could come from a whole range of sources:

  • Friends and family
  • Professional contacts
  • Potential job opportunities
  • RSS feeds
  • News outlets
  • Social media notifications
  • Marketers
  • Insurance companies
  • Calendar reminders

And, potentially: internet scammers.

The compulsion to check for new messages is no laughing matter. You see that number ticker change in your browser window or on your phone’s screen, and you’ve just got to click it. To find out who it’s from. To read it, resolve it, and get it out of your inbox. But what do you do when it’s from someone you don’t know, but who promises a lot of money in exchange for a little something on your end?

You probably know about the Nigerian Prince — the poor deposed man who just needs your help getting to his money. But there are lots of similar scams that are harder to spot. Perhaps the soulmate you met online needs financial assistance in order to meet you. Or that nice company that is trying to save the world just needs a little financial help.

The damsel in distress doesn’t always come in the form of a prince, but he, she, or they will almost always come for you through email. When they do, will you fall for their tricks or will you be able to sniff out the scam before it’s too late?

Find out everything you need to know about the oldest internet scam in the following infographic:

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The Oldest Internet Scam (and How to Avoid It)

The Nigerian Prince is one of the great bits of internet lore: a scam involving a large amount of wealth trapped overseas that needs your help to release it. The result: you get fleeced. But the Nigerian Prince is just one form of advance fee fraud, which continues to steal billions of dollars every year. Find out all about it below.

What You Need to Know

  • Advance fee fraud is a con where future payments are promised while fees are extracted
    • Examples:
      • Millions are available if you can only provide $5,000 for the wire transfer
      • You’ve won a new house, and you just have to pay the taxes on it
    • It’s kind of like J. Wellington Wimpy in the old Popeye cartoons, “I’ll gladly pay you Tuesday for a hamburger today.”
      • But not pay ever arrives
  • The Scams
    • Specific forms
      • Fake lottery winnings
      • Inheritance notices
      • Job offers
      • Romance scams
      • Financial legal help
    • Predictable results
      • Direct financial loss to victim
      • Identity theft
  • Many advance fee scams still come directly out of Nigeria
    • But it isn’t specific to that country
      • They can come from anywhere, notably:
        • Ivory Coast
        • Togo
        • The Netherlands
          • Depending upon the specifics of the scam, it may not even be from another country
      • These are often referred to as “419 scams,” because Section 419 of the Nigerian Criminal Code deals with fraud
        • “Any person who by any false pretence, and with intent to defraud, obtains from any other person anything capable of being stolen, or induces any other person to deliver to any person anything capable of being stolen, is guilty of a felony, and is liable to imprisonment for three years.”
  • Advance fee fraud is a modern version of the “Spanish Prisoner.”
    • Dates back to the 16th century
      • In 1898, The New York Times reported that the scam was again being revived
    • The scam should sound very familiar to those aware of the Nigerian prince
      • A wealthy man is in prison in Spain under a false name
      • If you could just bail him out, he would lavish riches on you
  • The scam has gone through many phases
    • First sent out by mail
    • Then by fax
    • Now email
      • This includes smartphones

The Nigerian Scam

  • Letter or email promises a share in millions of dollars
    • The money needs to be transferred out of Nigeria
    • Scammers often claim to be a foreign prince or government official
  • Scammer asks for financial assistance from the victim to help secure the money
    • Delays will arise that require money from the victim:
      • An official needs to be bribed
      • Accounts must be set up
      • Legal fees must be paid
      • Taxes are due
      • And on and on and on
    • Victim is asked to send account information
      • Bank letterheads
      • Account numbers
      • Other identifying information
    • Old requests for money will be followed by new requests for money
      • It only stops when the victim refuses to send money
        • This often leads to credit card and bank fraud with information the scammers acquired

The Scammers

  • There are many people involved in these scams
    • Organizers: create fake profiles, photos, and documents, which are used in romantic letters, online courtship, and bulk emails
    • Hackers: steal credit card details for identity fraud
    • Crossovers: work with legit financial and government positions, help get fake documents, letterheads, stamps, seals, etc.
    • Communicators: contact targets
    • Executors: use language skills to scam victims through email and phone
    • Enforcers: coerce or extort victims to pay and protect the organization in the event of victims attempting to reclaim money
    • Money Movers: move the money globally
      • Young people with computer skills are often recruited from cyber cafes to run scams
        • Some are as young as 6 years old
  • Scammers often work in shifts of 6-8 hours around the clock earning $1,000 per month — and often far more
    • This is compared to the average daily wage in Nigeria of $1
  • Scammers expect to “court” victims for 6-8 months
  • About 30% of scammers’ income goes to “security”
    • Bribes to police and other officials
    • Some scammers justify actions by pointing to an allegedly corrupt government

Harm Done

  • Monetary loss
    • Millions of people are defrauded with these scams every year
      • Many forms of fraud are connected to advance fee fraud
        • 80% of check fraud
        • 95% of lottery scams
        • 91% of inheritance/will fraud
      • Victims have lost as little as $200 and up to $12 million as a result
        • Smaller amounts are frequently from lottery scams.
        • Larger amounts are frequently from business proposal scams.
    • In 2012, the FBI received more than 4,000 complaints with losses of over $55 million due to advance fee romance scams.
    • About $12.7 billion total was lost to 419 scams in 2013.
  • Associated harm
    • From 1996 to 2013
      • 31 murders
      • 35 suicides
      • 49 kidnappings and hostage incidents
      • 1,512 bankruptcies

Case Studies

  • Romance scam costs big
    • 51-year-old Australian Jenny joined an online dating site called RSVP
    • In 2013, she developed a relationship with a man she thought was named Gary
      • His photo was stolen from another site and profile was faked
      • He was actually a scammer out of Nigeria
    • Gary proclaimed his love for Jenny and a need for money for a business crisis
    • Just 6 weeks into the relationship, Jenny started sending him money
    • After getting suspicious of Gary’s behavior, she started asking questions and working with the police
    • Australian and Nigerian police worked together to make an arrest
    • Jenny’s bank ended up recalling two of three payments made to the scammers
      • She recovered about $100,000
        • This was 40% of what she lost
  • Business owners at risk
    • Interior designer Jill lost $300,000 over four years.
    • Scammers posed as Nigeria’s Commissioner of Health looking for Australian businesses to update hospitals in the city of Lagos
    • Promised potential profit to the business was a million dollars
    • Jill thought she had found a great project for her small company
    • Going public about the scam also cost Jill her marriage in 2011
  • Largest single victim was Banco Noroeste S.A.
    • Individuals involves
      • Victim
        • Nelson Tetsuo Sakaguchi was a senior official at the bank
          • He was nominally the victim, but was actually defrauding his bank in the name of enriching himself with the promised rewards
      • Scammers
        • Emmanuel Nwude
          • Director of Union Bank of Nigeria
        • Ikechukwu Christian Anajemba
        • Amaka Anajemba
          • Wife of Ikechukwu Christian
        • Nzeribe Okoli
    • Scammers posed as government and business officials in a construction deal to build the Abuja International Airport.
      • Sakaguchi was offered $10 million in commission for fronting the cash for the project.
      • Sakaguchi embezzled $242 million from 1995-1998 to supply the scammers with funds
    • Justice
      • Sakaguchi was arrested at the JFK airport in New York and sent to Switzerland to stand trial after setting up Swiss bank accounts in connection with the scam
        • He was imprisoned and later released
        • He later testified against Emmanuel Nwude in Nigeria
      • In 2004, the main perpetrators were arrested and eventually convicted
        • They forfeited roughly $170 million combined
        • Emmanuel Nwude
          • Five concurrent five year sentences
        • Nzeribe Okoli
          • Four years
        • Amaka Anajemba
          • Two and a half years
        • Ikechukwu Christian Anajemba escaped prosecution
          • He died in 1998 in what many believe to have been a murder

What Can Be Done

  • Organizations and businesses are working on the problem
    • Western Union restricts wire transfers to Nigeria
    • 10 years ago, scammers could make about $12,000 per victim
      • Now they make closer to $200
    • Organized groups of “scam baiters” reply to scammers
      • Spreads scammers’ time away from real victims
      • Baiters never send money
  • What you can do
    • Recognize email scams
      • Sob stories
      • Polite language
      • Often poor English grammar/spelling
      • Promises of big money payoffs
      • Appeals for financial help
      • Remember: advance fee fraud don’t always name Nigeria; they can come from anywhere
    • Dos and Don’ts
      • Do:
        • Be suspicious of people:
          • Claiming to be government officials
            • Real business officials don’t send out email to random people
          • Promising money in exchange for cooperation
          • Asking for money to help them out of a jam
        • Delete suspicious emails
        • Check offered deals with:
          • Better Business Bureau
          • National Fraud Information Center
        • Report possible scams to authorities:
          • FBI
          • US Postal Inspection Office
          • US Secret Service
          • Federal Trade Commission’s Complaint Assistant
      • Don’t:
        • Send money to strangers
          • This includes people you “know” only online
        • Give out personal information and account numbers to strangers
        • Send personal information over email
          • No legitimate bank would ever ask for information transmitted in this way
        • Try to retrieve lost money independently

The old saying goes, “You can’t cheat an honest man.” But that’s just not true. Whether the lure is money or love, you can be a victim. Knowing how these scams work is critical to protecting yourself.

Sources: fbi.gov, motherjones.com, consumer.ftc.gov, wsj.com, snopes.com, nytimes.com, wisegeek.com, geektime.com, nigeria-law.org, theregister.co.uk, zdnet.com, abc.net.au

Sources

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