Nigerian scam (419 scam)

The Nigerian scam has been around for a long time. Originally conducted over phone, fax, and traditional mail, this scam invites victims to send a small amount of money on the promise of receiving a much larger sum in return. The development of email has made it much easier for scammers to reach new victims. It’s difficult to find statistics that reflect the true costs of advanced fee frauds like the Nigerian scam.

The FBI and the Internet Crime Complaint Center (IC3) 2017 Internet Crime Report says Americans lost almost $58 million to advanced fee fraud that year. Many people are confident they can recognise fraud attempts, but it remains clear that anyone can fall victim to online scams. The FTC’s latest data (pdf) shows that millennial internet users are more likely to be scammed than any other age group, however, older citizens are frequently fooled into giving larger amounts of money. It’s important that you can recognize a Nigerian scam email if you receive one.

What is the Nigerian scam (419 scam)?

The 419 scam is an infamous advanced fee fraud tactic that originated in Nigeria and has since spread around the world. The most well-known source for these emails is Nigeria, but they can originate from anywhere. In Nigeria, the crime has become a significant source of income for some, although section 419 of the Nigerian legal code prohibits it (hence the name). How does the scam work?

A person will open their email account and find an email claiming to be from a Nigerian prince or an exiled politician. The person may claim to be from a country that’s currently in the news, or another location that’s experienced civil disturbance.

The email will explain that due to political instability, or the death of a relative there is a significant amount of money trapped in an account. It goes on to explain that if the reader could please send just a small amount of cash, it will pay for the fees to access the account. In return for their trust and generosity, the reader is promised a large percentage of the money supposedly locked away.

One variation of this scam uses an astronaut rather than a prince. The author of the email claims that there has been a Nigerian astronaut – Major Tunde – stranded on a Soviet space station since 1990. During this time, Major Tunde has been receiving military pay checks back on earth. The accrued pay now amounts to several million dollars. The recipient of the email is asked to pay money to fund Major Tunde’s return to earth. In return, they are promised 20% of the beleaguered astronaut’s stored money.

While this scam seems laughable, the point is not whether the majority of people find it credible. Rather, it is a way to find those who are willing to believe it. In this way, scammers won’t need to waster time on people who are likely to quickly become suspicious and give them nothing. In a nutshell, it’s a way for scammers to avoid false positives (pdf).

Unfortunately, if a person does decide to send money, it will soon be followed up with a request for more. According to the subsequent emails sent by the scammer, unexpected costs are often discovered, such as increased taxes or bribes to officials. The scammers will continue to ask for money as long as the victim will send it. Needless to say, there will never be any kind of payout sent to the victim, regardless of how much they send.

How to identify a Nigerian scam email

There are some common traits that Nigerian scam emails have. Watch out for some, or all of these warning signs:

  • The email is received unexpectedly,
  • You don’t know the person who sent it,
  • It contains a long and sad story about political trouble or family problems,
  • It contains a long and sad story about why the sender can’t access money,
  • The email specifically asks you to help by sending money via money transfer services,
  • The email offers a temptingly large payment in return for your small offering.

What to do if you receive a Nigerian scam email

If you do receive an email that you suspect is a scam, you can take some simple steps to investigate it. Always assume an email is a scam, and never send money without doing some basic fact-checking first. Protect yourself by reaching out to trusted people who are not involved to help you verify that the email is a scam.

  • Do not send money, gift cards, electronic transfers, cryptocurrency, wire transfer such as Western Union or money order. These are all virtually untraceable and there is usually no way to recover these funds.
  • Contact a trusted friend or speak to your bank about the email. They will be far less impacted by any emotional techniques used to deceive you into sending money.
  • Paste the text of the email into a search engine. Scammers use the same scripts repeatedly, so others may have already reported the scam.
  • If the email claims to be from a legitimate business, go directly to the company website and contact them to verify the request. Never click on links in emails as they may contain malware.
  • Never respond to scam emails, even for a joke or to ‘see what happens’. The longer you engage, the higher the chance they will emotionally manipulate you into sending money.

How to protect your business against Nigerian scams

Here are some quick steps you can take to protect your business or yourself from falling victim to a Nigerian scam in the workplace. The scammers have shown themselves to be very cunning and may outwit even these protections, but they should provide a strong shield against many attacks.

  • Educate staff about what scam emails can look like
  • Never send private or financial information over email
  • Update all anti-virus software to the latest versions
  • Establish two-factor authentication on email and system logins
  • Require two or more signatures on money transfers over a specified amount
  • Ask your email server operator to add a flag to emails that originate outside the network

Advanced fee fraud

The Nigerian 419 scammers experience a high rate of success because people are often willing to risk a small amount of money in order to take a chance on getting a much larger reward. It’s a type of scam known as advanced fee fraud, and it’s not the only example to be found online. Nigerian scams typically fall under the category of ‘beneficiary funds’. That is, they ask victims for money to help access large funds held in trust for stranded family members or a similar sob story. Here are other versions of advanced fee fraud to watch out for.

Investment proposals

Scammers will pose as investors or lawyers and ask for help (funds) to enable large and promising investments to be made in overseas bank accounts. The emails are usually designed to make the recipient curious about how the money was obtained or how the interest will be earned in exotic locations, and promise a significant payout as a reward for their assistance.

Lottery or competition wins

Victims will receive an email announcing they have won a large sum in an international lottery, raffle or competition. Often the scammers use branding from true lottery agencies to convince victims that the emails are authentic. Scammers ask for personal information such as name, date of birth and driver’s licence number in order to verify the supposed winner’s identity. These details can be used for identity fraud. Some emails ask for a small payment to be made in order to facilitate the payment of the lottery winnings.

Romance/lonely hearts

Online dating scams typically begin on forums, dating apps, and other public spaces that attract single or lonely people. Scammers work to convince victims that they are in love with them but there is a reason they can’t meet yet – that they need money. Soon the scammer will request money for investments, help with living costs, hospital fees or demand extravagant gifts.

Why it’s important to report a scam

The Nigerian scammers are experts at separating honest people from their money. They invest a lot of time honing their skills and developing the best approaches to manipulate people. If you have been scammed, it is natural to feel embarrassed, but it’s important to report the crime straight away.

When shame or embarrassment encourages secretive behavior, it can often lead to victims being scammed repeatedly. Victims may also be tempted to chase good money after bad — a form of cognitive bias known as the sunk cost fallacy.

Psychological studies have shown that there is greater tendency to continue with an action once an investment of money has been made. Cognitive biases such as this affect everyone — even those who know about them. Indeed, the very idea that knowledge of cognitive bias is enough to overcome it is itself a studied bias.

If you’ve been scammed or think you’ve received a scam email, go to our page on how to report a scam to find the correct agency to speak with. If you have sent money, you may need to contact your financial institution. The resources listed on the “How to report a scam page” will advise the best steps for you to take to protect yourself from further attack.