Victims of advance fee scams pay money up front, after being promised a much larger payout by someone who claims to be in a position of authority. This is a prevalent form of internet fraud.
The advance payment may be described as a tax, commission, insurance or administrative fee that is required to secure the release of funds from a frozen investment, inheritance, contract, account or government treasury.
Advanced payments are also solicited in employment scams and similar schemes, with false claims that a deposit of personal funds is needed to “unlock” rewards, bonuses or enhanced commissions.
After the fraudsters receive the first up-front payment, they will make new demands for more money, often with elaborate explanations, and false promises of larger and larger profits.
When the victim finally becomes suspicious and refuses to make additional payments, or demands return of the sums already paid, the fraudsters will cut all contact and communication.
These scams are often operated under fictitious personas or stolen identities. Victims are targeted through online dating sites, social media, or unsolicited emails.
These are also known as “419” scams, referring to the relevant section of the criminal code in Nigeria, where these schemes were developed and run by organized gangs specializing in online fraud. This popular model of fraud has spread worldwide and is perpetrated today by fraudsters all across the globe.
About the Author
John Powers is president of Hudson Intelligence, an investigative firm in New York that specializes in the investigation of fraud and financial crimes. He works with clients throughout the U.S. and internationally.
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Photo Caption: "Losing Hand" by Damian Gadal - CC BY 2.0