For as long as there has been trading of goods and exchanging of money, there have been scams. Globally. All through history people have tried quick, easy, and dishonest ways to increase their wealth. However, in recent years one country that has stuck out as a scam hotspot is Nigeria in West Africa. Nigeria is one of the world’s biggest cryptocurrency markets and has an established tradition of scams. The Nigerians invented an entirely new kind of fraud: the Nigerian Fraud Scam, also known as a the “419 scams Nigeria”.
A Nigerian fraud scam is a scheme intending to defraud victims of funds under any pretext that a victim might reasonably swallow. Scammers are experts at exploiting human psychology to cause you to fall for their scams. They will use tactics like the fear of missing out (FOMO), the desire for quick and risk-free financial gains, the use of complex language to make themselves sound educated, intelligent, and trustworthy, and the impersonation of trusted authorities such as law enforcement and government. If you know the ways scammers play on your emotions, you are better equipped to fight them.
Common tactics in Nigerian Fraud Scams
Nigerian fraud scammer extradited to US – Source: Dailypost.ng
Tactics common across most forms of the Nigerian fraud scam that I have seen run as follows:
- They typically begin with an unsolicited phone call, text, or email, informing the victim of a vast amount of money in limbo that the scammer, often posing as a government or bank official or the notorious “Nigerian prince,” needs to move out of country.
- The scammer will request the victim’s help in moving the funds in return for a substantial cut of the money.
- Once the victim’s help is established, the scammer will request fees from the victim, lawyer fees, bank fees, tax fees, for the victim to pay before the vast sum of money can be released.
- The payments from the victim to scammer may be small to begin with, but as the scam continues the scammer will press harder and harder to squeeze every last penny they can from the victim.
- At some point, the victim will realize they have been scammed, by which point their funds, and the scammer are far out of reach.
Adding Cryptocurrency
The most common scams we see run along the same plot beats as those above. Yet as time goes on, the scammers adapt, finding new ways to make payments and add legitimacy to their schemes. Cryptocurrency has made a vast difference in the way scams are perpetrated, with their instant, irreversible payments to anyone globally, and their pseudo-anonymous nature making tracing, while not impossible, yet difficult for those who have not been specially trained.
We at Rexxfield have dealt with many cryptocurrency scams originating out of Nigeria and West Africa. These include romance scams, fake investment scams, extortion, and sextortion scams. All the above involve the scammers defrauding their victims of cryptocurrency, often harming their mental well-being in the process.
The 419 Scams Nigeria
The most common example of a Nigerian fraud scam is the 419 scams Nigeria, a kind of “advance-fee” scam. The 419 scam is named after the section of Nigerian criminal law that deals with fraud. To help you get an idea of how the fraud can look, below is a generic example of scam situation.
Initial Contact
The scam will begin with unsolicited contact from the scammer to the victim. This contact can be in any form, email, a letter, a phone call, or text message. The sender will pretend to be someone of high status, a government official, a rich businessman, etc, who desperately needs aid in transferring a large sum of money.
The scammers will make up any story they think a victim will believe. Rigmarole about political instability or corrupt regimes, or drama involving inheritance disputes, something that prevents the owner from accessing their money. The scammers will say they need the victim’s help in transferring this money, asking if the victim can safeguard it in their own bank account and in return, they will receive a percentage, thousands or millions of dollars, as a reward.
Building Trust
Once the victim has taken that first bait, the scammers will work on building trust and getting the victim emotionally invested in the deal. They will elaborate on their story and legitimise it with forged bank or tax documents or identifying documents such as passports. During this time the scammers will want to keep a good amount of contact with the victim and feed them more details on why the victim is so crucial to this deal. They will probably also encourage the victim to keep everything quiet, as exposure could jeopardize the deal.
The Advance-Fee Request
Now we get to the real scamming part of the 419 scams Nigeria. The scammers will introduce a complication with the deal that can only be resolved by the victim sending through money to pay a fee – a lawyer fee, tax fee, it could be anything. The pressure will be on to pay quickly, as the scammers might say the deal will fall apart if the money isn’t provided.
Continuation and Escalation
The payment may be relatively small, a few hundred to a few thousand dollars, nothing compared to the reward the victim was promised if the deal goes through and therefore there may seem little risk in paying. Yet once that first fee is paid, the scammers will invent more complications, bring up more fees that need to be dealt with, all the while claiming that the deal is “so close” to coming through. This cycle will continue until the victim runs out of money or realises that they are being scammed, as the fees will never end, and the scammers will continue squeezing until they have every penny they can get from the victim.
Conclusion of the Scam
Eventually, the victim will realise that they have been scammed, or they will run out of money. Yet by this time, they may have lost thousands of dollars, and the millions promised by the scammers is not coming.
The Nigerian fraud scam preys on greed and trust, exploiting the victim’s hope for financial gain all the while draining them of their funds and resources. The simplicity of the scam, combined with its adaptable nature, has made it one of the longest-running and most infamous frauds in the world.
Red Flags of Nigerian Fraud Scams
The red flags present in Nigerian fraud scams are similar and, in some cases, identical to those one must watch out for in other kinds of fraud.
- Unsolicited Contact: Beware of unsolicited phone calls, text messages, or emails. This does not mean ignoring every call from an unknown source, for one it may be a friend who innocently texts you on their new phone number. But be wary and verify. If you don’t immediately recognize whoever is on the other end, take what they say with a grain of salt, maybe an entire pinch.
- Grandiose Promises: Be extra wary if the caller introduces you to a marvellous investment opportunity or requires your help in transferring a large sum of money out of the country or across borders. Hesitate before you provide personal information. Conduct the proper due diligence. Verify. It is probably good to mention that even if the deal was real, you could potentially break a few anti-money laundering laws or be liable for taxes later from your government on money you don’t have. Moving money for others is generally a bad idea.
- Advance Fees: Watch out if the scammers begin to pump you for fees and seemingly “small” payments. If you are involved in investment fraud and are being asked to pay tax fees to withdraw your funds, do not do so. Your funds are likely already gone, and these fees are simply the scammers doing their utmost to squeeze more money from you. It is difficult to let your funds go. You may think that “just one more payment will do it” but it will not.
What to do if you were scammed?
If you encountered a Nigerian fraud scam or other crypto related fraud and made it to or past point 3 above, then you have likely suffered some financial loss. If that is the case, you may wonder what to do next.
First and most importantly: Do not send any more crypto or fiat money to the scammers. Be wary also of recovery scammers promising speed and guaranteed recovery. Most of the time recovery of assets is impossible*, and when it is, it is never quick.
However, speed is essential once you have discovered the scam. If you report the scam shortly after it has occurred to a nimble cyber investigation company such as Rexxfield, we can act quickly to follow the lost funds through the laundering process and collaborate with exchanges and banks to freeze your assets before they are lost for good. There is much perishable data on the internet that we can find and use to help law enforcement apprehend the scammer, if the scam is reported in good time.
Second: Do not cut off communication with the scammer or let them know you are onto them. If they ask for more money, stall, buy time, and delay them. If there is still open communication with the scammer, it allows investigators like us to gather evidence and trace their current online infrastructure.
Third: Contact the police and if applicable submit an IC3 report to the FBI. If you are dedicated to pursuing the case and potentially resolving it, consider contacting and hiring a private investigation firm such as Rexxfield, as we use our cutting-edge blockchain and Open-Source Intelligence (OSINT) tools to solve fraud cases and uncover witnesses much faster than the police.
*Note: If your scam did originate from Nigeria, you have a higher chance of case resolution than others. Rexxfield has a good relationship with the Nigerian Economic and Financial Crimes Commission (EFCC) and our collaboration with mission driven agents there has already resulted in a recovery and several arrests.
Conclusion
Though it is a terrible thing to be scammed, you can use your experience to reflect and learn how not to make those same mistakes. You can also inform your friends and loved ones, giving them a chance to avoid the same loss you experienced. Fraudulent schemes will not go away any time soon, but the more people who are aware of scams and the tactics used by scammers, the fewer will fall. It is important to remember that the people on the other end defrauding you are practiced and cunning and constantly adapting. We must be awake and aware to see the fraud in their honey-sweet promises.
If you need help with tracing your lost funds, and/or locate the scammers, please contact us for a free consultation.
