Definition
The Nigerian Scam, also known as 419 scam or advance-fee fraud, is a fraudulent scheme often enacted via email or letter, where victims receive a communication that seems to be from a wealthy Nigerian or a high-ranking government official. In the message, they ask for financial assistance to retrieve large sums of money from a bank or depository, promising significant profit for the victim in return. The scam is usually revealed when the “wealthy individual” requests upfront payments for legal processes, taxes, or bribes, with no return ever provided.
Key Takeaways
- The Nigerian Scam, also known as “419 scam”, is a fraudulent practice that typically involves an email or letter in which the sender claims to be in need of moving funds from Nigeria and promises a substantial share of the money for the recipient’s assistance. It manipulates individuals by provoking their greed or sympathies.
- It’s named after the 419 section of the Nigerian Criminal Code dealing with fraud. However, this type of scam isn’t exclusive to Nigeria but is popular in several other African nations as well. While it has its roots in physical mail and fax transmissions, it has adapted to digital mediums, including email, social media, and even smartphone apps.
- The crucial preventive measure to tackle this scam is to stay vigilant online. Any unsolicited correspondence promising enormous profits must be treated with skepticism. Individuals and organizations should refrain from sharing personal and financial details without proper verification. Reporting any potential scams to local law enforcement and internet crime authorities can also deter these fraudulent activities.
Importance
The finance term “Nigerian Scam,” also known as “419 fraud,” is crucial due to its globally prevalent impact on unsuspecting individuals and businesses.
This scam is a type of advance fee fraud, where victims are persuaded to pay a sum of money upfront in the hope of receiving a larger fortune later, usually in millions of dollars.
Originating from Nigeria, these scams can take multiple forms, such as deceptive emails, letters, or phone calls requesting assistance in transferring considerable sums of money.
They often weave elaborate stories involving political instability or dying millionaires unable to access their wealth.
The term is significant as it underscores the need for awareness about cyber scamming and fraud prevention measures, reminding individuals to be cautious when asked to send money or provide any personal financial information.
Explanation
The Nigerian Scam, also known as the 419 scam or advance-fee fraud, is a type of fraudulent scheme that’s primarily used for swindling unsuspecting targets out of their money. The primary purpose of this scheme is to trick people into sending their money or providing their bank account information with the promise of large profits or benefits that never materialize.
The scammer can manipulate the victim’s emotions such as greed or sympathy to convince them to part with their money. The scheme usually starts with the scammer, posing as a Nigerian prince or a government official, sending an unsolicited email or letter requesting urgent help to transfer a large sum of money out of the country.
The scammer promises the victim a significant share of the money or a hefty reward for their help. However, the victim is required to pay certain upfront fees, such as transaction charges, legal fees or bribes for corrupt officials.
These payments are supposed to facilitate the money transfer, but they are actually going straight into the scammer’s pocket. Over time, the scam has evolved to include other narratives, but the basic premise remains the same.
Examples of Nigerian Scam
In 2004, a woman named Janella Spears from Oregon fell for a Nigerian scam that originated from an email. She believed she was sending money to help a distressed member of the royalty who promised a hefty return on her investment. Over time, she ended up losing near $400,
In 2016, the Australian Competition and Consumer Commission (ACCC) reported a case where an Australian man lost AUD 50,000 in a Nigerian scam. The victim received an email claiming that a distant relative with the same last name had died in Nigeria leaving an unclaimed fortune of $15 million. He was promised a 60% cut of the fortune, but instead, ended up losing thousands of dollars in supposed transaction and legal costs.
A notable case occurred in the UK in 2012, when a British man was duped by a variant of the Nigerian scam. The scammers posed as soldiers in Afghanistan who had discovered a hidden cache of money and convinced the man to pay a series of fees totaling £150,000 for helping move this cash. They promised him a significant share of the spoils, a share which never arrived.
FAQs About Nigerian Scam
What is a Nigerian Scam?
A Nigerian scam, also known as 419 fraud, is a type of scam where the scammer deceives victims into believing they have been offered a large amount of money. The scammer requests for personal information and a small advance fee. Once paid, the scammer disappears with the money, and the promised fortune never materialises.
How does a Nigerian Scam work?
Nigerian Scams primarily start with an unsolicited email or letter from a scammer portraying to be a high-ranking official or member of a royal family. The scammer requests assistance in transferring large sums of money out of their country, promising the victim a substantial share. The victim is then convinced to pay advanced fees or provide personal information, only to be defrauded later.
How Can I Protect Myself from Nigerian Scams?
Protecting yourself from Nigerian scams involves being aware and vigilant. Never answer unsolicited emails from strangers, never share personal or financial information without valid confirmation of the person’s identity, and always report suspected frauds to local law enforcement agencies and online platforms. Remember, if something sounds too good to be true, it usually is.
How can I report a Nigerian Scam?
If you become a victim of a Nigerian scam, or you have received a scam attempt, you can report it to your local law enforcement agency. Also, notify your bank or financial institution immediately if you have shared any financial information or made any payments. You can also report to the Internet Crime Complaint Center (IC3), a partnership between the FBI and the National White Collar Crime Center.
Is Nigerian scam only from Nigeria?
Despite being popularly known as “Nigerian scam”, it doesn’t mean that all scams originating from Nigeria or are perpetrated by Nigerians. Scammers can be located anywhere in the world. They often use email spoofing techniques to hide their true location or impersonate government officials or financial institutions.
Related Entrepreneurship Terms
- 419 Fraud
- Advance Fee Fraud
- Internet Scamming
- Social Engineering
- Identity Theft
Sources for More Information
- FBI: The Federal Bureau of Investigation’s website provides a broad range of information about different types of scams, including the Nigerian scam.
- Federal Trade Commission: This U.S. government site has plenty of resources about fraud and scams, offering insights about the Nigerian scam as part of broader education on consumer protection.
- Internet Crime Complaint Center: This is a partnership between the Federal Bureau of Investigation and the National White Collar Crime Center. It is designed to serve as a means to receive Internet-related criminal complaints and to further research, develop, and refer the criminal complaints to federal, state, local, or international law enforcement and regulatory agencies.
- Better Business Bureau: This site offers information about different types of scams and ways to protect yourself. They offer regular updates and methodology to identify such kind of scams.
