By Kim Miller, Ph.D., CFE
Faculty Member, School of Security and Global Studies, American Public University
Note: This is the first article in a two-part series.
Advance fee fraud works when a fraudster convinces a victim to pay in advance for bogus products or services, or even for the chance to receive more money. The victim believes that by making an initial payment he or she will receive additional revenue in the future.
There are various types of advance fee fraud, including phony lottery winnings, deceased estate fraud and bogus business opportunities. In one classic scam, the victim is told of an inheritance and is asked to send a fee that will release the inheritance money.
In another advance fee fraud, the fraudster asks the victim for a certain amount of money up front. That payment allegedly will open the way for him or her to take part in more lucrative financial transactions down the road. Once the payment is made, the victim either never hears from the fraudster again or the fraudster “goes to the well” again in an effort to get additional money from the same victim.
Internet’s Appearance Made Advance Fee Fraud a Lucrative Crime
Advance fee fraud has sixteenth-century roots. For example, the Spanish Prisoner scam, dating back to 1588, is a fraud where the con artist tells a victim that he is in touch with an aristocrat who has been imprisoned in Spain under a false identity. The con artist needs help to raise the money needed to secure the aristocrat’s release. Once the “imprisoned aristocrat” receives that financial help, the victim will be rewarded financially and with marriage to the aristocrat’s beautiful daughter.
In the 1970s, advance fee fraud grew in importance with the Nigerian letter fraud. The scam began in the Nigerian cities of Lagos, Aba, Owerri and Port Harcourt. Since the majority of the fraudulent letters originated from Nigeria, they were criminalized under Section 419 of Nigeria’s criminal code and this crime became known as 419 fraud.
By the 1990s, criminals around the world realized how lucrative advance fee fraud was and took it online, creating a global Internet problem. Advance fee fraud is also linked to other serious and violent crimes. A 2006 United States Secret Service report linked advance fee fraud crimes to a number of deaths.
Unfortunately, advance fee fraud is not declining because everyone who has an email account is a potential target. Advance fee fraud is linked to the “routine activities theory,” which has three main characteristics necessary for a crime:
- An offender who is motivated to criminal activity
- The absence of a capable protector (law enforcement)
- A suitable target (the victim)
Victims might not want to report advance fee fraud because they are embarrassed by their own gullibility. Since advance fee fraud is not confined to geographic boundaries, it is difficult for local police to provide any restitution for the victims; also, the victims are often embarrassed to admit they have been defrauded. The more time a person spends in cyberspace, the more likely he or she will be a victim of a cybercrime or become a cybercriminal.
Advance Fee Fraud Education Can Help Reduce This Crime
A practical way of dealing with advance fee fraud on the Internet is through education to help potential victims understand the legal, community policing and resource challenges of dealing with this crime. People tend to put their privacy concerns aside for the sake of online convenience, but controlling personal information increases website privacy.
The FBI reports data on property crimes and larceny thefts, but not on embezzlement, online games or advance fee frauds. Although the FBI provides crime statistics and what to do when someone receives a scam letter from Nigeria, there is no FBI warning regarding similar letters from other locations.
One way to reduce the number of targets is for individuals to protect themselves by controlling the release of their personal information online. Providing education to control personal information on the Internet is an important protective strategy.
About the Author
Dr. Kim Miller is an adjunct professor of criminal justice in the School of Security and Global Studies at AMU. Her academic credentials include a B.S. in Criminal Justice and an M.S. in Criminal Justice from Kaplan University, as well as a Ph.D. in Public Safety-Criminal Justice from Capella University. She is also a Certified Fraud Examiner and a New Jersey Licensed Private Detective and an online investigator.