An overview of the main types of scam we deal with and the basics of how to avoid being a victim of a scam.
#7 by Samantha Wed Jul 11, 2007 12:16 pm
Basic Guide to Scams

There are many varieties of internet fraud. This overview describes a few of the most common ones. More detailed information can be found in our postings about specific scams in this forum.

If you cannot find something here relating to your specific circumstances, please do not assume that you are safe. These scams are just the most frequent ones, and there are many others. If you have any questions. please feel free to ask.

Common types of scams

Advance fee frauds
Also known as "419" scams, the designation used in Nigerian criminal law, or "Nigerian" frauds. These take many forms but all feature the lure of a huge sum of money or a consignment of jewelry, gold, or other valuables. They are called advance fee frauds because they all involve the victim paying various fees in advance. The fees are said to be for a lawyer or barrister, court documents, registration or other formal payments needed, security company, courier or diplomat fees, bribes, or other fictitious claims. If the victim pays the fee, there will always be another one that needs to be paid before the money or consignment can be released, and this will continue until the victim realises it is a scam, or simply runs out of money to send. There is no consignment or huge sum of money: the entire story is a lie to get the victim to pay.

The most common lies include:
  • over-invoiced contracts
  • unclaimed bank accounts
  • a next-of-kin who has died and left the victim a fortune
  • a political refugee (or the widow/son/daughter of one) who has valuables he cannot take out of the country alone
  • a dying person who wants to distribute huge sums to charity before they die
  • an investor who has a large sum of money to invest in the victim's country.

These are all lies, told merely to set the scene for the request for money from the victim.

Please read this post for more details on advance fee frauds.

Lottery scams
The scammer will pretend to represent a lottery and will tell the victim they have won a huge sum of money. As with advance fee frauds, there will be endless fees to register, to claim the prize, to pay a lawyer, to cover shipping costs of a courier company and so on, until the victim has given up or run out of money.

The scammer will typically pretend that it is a random lottery, often based on picking an email address, to evade the fact that you cannot win a lottery you have never entered. Often scammers copy names and/or logos of legitimate lottery sites to appear more believable.

Please read this post for more detailed information on lottery scams.

Check or money order scams
There are many variations of check scams, detailed here. The most common are overpayment for goods, investor scams, and the company agent "work at home" scams.

If you have been asked by someone you don't know to cash a check, money order or traveller's check and send on the proceeds or goods, please act with extreme caution.

The scammer asks the potential victim to receive payment (whether for goods being sold, investment, or from a "customer" of the scammer) and to forward all or part of the proceeds after cashing the check. The check/money order is fake, forged or stolen. The scammer counts on the fact that banks are required by law to make funds available in a timely fashion; however being able to cash a check does NOT mean that it has really cleared. When the forgery is finally discovered, the victim is held liable. Many check scam victims have been arrested or investigated by the police for money laundering.

Black money or "wash-wash"
The scammer claims to have a large supply of currency, usually US $100 bills, which have been treated with a black dye to disguise that it is money. By treating with (expensive) chemicals the money purportedly can be cleaned and turned into legitimate currency. The victim is asked to pay for the required chemicals. Because that fee will be much less than the total value of the claimed currency, the victim thinks there is a profit to be made.

The victim may be shown photos of the black money or be invited to visit the scammer for a live demonstration of the cleaning process. In fact, all the so-called money is just black paper, and the cleaning demonstration relies on sleight of hand to reveal a "clean" genuine bill.

Love scams
The scammer pretends to be looking for love, and engages the affection of their potential victim, often using photos stolen from the internet to present an attractive persona. They target people on dating sites or in chat rooms and will often fall in love remarkably quickly in an effort to captivate the victim. Once they think their target believes their lies, the scammer will ask for help with living expenses or the cost of a visa or flight to the victim's home country. Or the scammer may say that a relative is ill and needs urgent medical attention, or that they need help paying for their education.

We have a special forum devoted to these evil scams here.

Charity scams
These heartless scams prey on the generosity of people moved by disasters and the misfortunes of others. The scammer may claim to be an orphan in need of assistance, or a pastor or clergyman looking for contributions to aid the work of his ministry.

After every natural disaster in recent years, there have been scammers immediately capitalizing on the tragedy and pretending to be a charity helping the victims. Examples include 9/11, the Indonesian tsunami, Hurricane Katrina, the Haitian earthquake, Australian floods, and dozens more.

Please read this posting for more detailed information on these evil scams.


How can I recognise a scam?

While not an exhaustive list, here are some of the warning signs to look for:
  • It sounds too good to be true. There's the potential for a large gain with very little investment of time or money.
  • The approach has come as a complete surprise.
  • The scammer does not address you by name.
  • There is an insistence on urgency and on confidentiality.
  • People are introduced to you by the scammer, such as bank officials, security companies, diplomats or lawyers. (These additional characters will be played by the scammer himself, or an accomplice).
  • You're supplied with many seemingly official-looking documents that are actually forgeries.
  • There's an early request for detailed personal information such as address, date of birth, bank account details, or identification such as a passport.
  • Emails supposedly coming from legitimate-sounding government agencies or financial organizations are actually sent from free email accounts like Yahoo, Hotmail, Gmail or others.
  • The scammer uses mobile phone numbers rather than official company landlines.
  • Each fee is said to be the last.
  • The scammer may claim to have personally paid some of the fee in order to build up your trust.

Does any of this sound familiar? If so, please go to the section of the forum relating to your situation and we will try to help you understand and deal with it.

What to do if you think you may have been scammed?
  • Cease all communications with the scammer immediately. Delete any emails unopened and hang up if the scammer calls you.
  • Report the scam to your local police and to the Internet Crime Complaint Center here if you are in the US. Unfortunately there is little chance that the scammer can be arrested, as he is probably overseas and certainly using false details. However, the more scams are reported, the more the authorities can tell how widespread it is, and the greater the effort that goes into stopping it.
  • If you have given the scammer your bank account, credit card or other financial details, notify your bank, card company or other provider immediately, and ask them to change your accounts and card numbers.
  • Do not accept any deliveries that are from the scammer or that you are not expecting. If you receive a check or money order, mark it "FAKE" and take it to local police.
  • Do not panic. While scammers are criminals and some of them are dangerous, the risks are negligible if you simply stop communicating with them. Scammers may try to threaten you to frighten you into complying but such threats are meaningless. Scammers do not waste their time on victims who refuse to give them money. If you are in any doubt about your safety, report your concerns to your local police, who will be able to advise you.
  • Don't expect to get your money back. Anyone who tells you they can get your money back for a fee is a scammer. Please see our section on money recovery scams for more information.
  • Spread the word. We know it's very uncomfortable to admit that you were scammed, but if you fell for it, so will others. Talking about it may be hard, but the more you help educate your friends and family about scams, the less opportunities there are for scammers to defraud others
  • Ask here for help and advice. It's what we are here for.

Useful links

Scam advice
(Updated January 2011)
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