clock menu more-arrow no yes

Filed under:

'Friends' in Nigeria, other con artists stalk the Web

Like most Americans who use the Internet, I have good friends in Nigeria.

These friends seek to make me rich beyond my wildest dreams.

I've lately received e-mails from a Nigerian "colonel" offering me a 20 percent cut of his late brother's $30.5 million hidden treasure trove; a petroleum firm "CEO" handing me a 30 percent share of an oil contract worth $38.5 million; and a "district bank manager" with an unclaimed $65 million account in need of an American beneficiary.

So that my newfound wealth can be transferred quickly and efficiently, my bank account information must be provided to these benefactors. And, oh yes, I might also have to make a financial contribution to get the ball rolling.

This scam that's lived on for decades via mail and fax has gained new life on the Internet. It would be laughable if it weren't that some people fall for it, forking over bank information and contributions. The average loss of a trusting soul taken in by it is $29,000, according to the Internet Fraud Watch of the National Consumer League. Some lost as much as $500,000 by following instructions.

Those crooked e-mail senders really are based in Nigeria. Since they won't come to the United States for fear of being arrested, they sometimes lure victims to Africa or other countries, where there have been instances of robbery and murder.

"The thing about the Internet is that if even 0.0001 percent of the people you contact with a scam fall for it, you're liable to make money," observed Marc Beauchamp, executive director of the North American Securities Administrators Association www.nasaa.org, Washington, D.C. "I get at least one of those Nigerian e-mails each week."

Prosecuting cross-border fraud is a challenge to law enforcement, since there must be cooperation between authorities in both countries involved. In this country, that problem is the purview of the U.S. Secret Service. Crooks in other countries besides Nigeria actively target Americans.

"While there's increasing cooperation between Nigeria and U.S. law enforcement, it has a long way to go," acknowledged Susan Grant, director of Internet Fraud Watch www.fraud.org, Washington.

Here are the most popular 2003 Internet scams:

The "pump and dump." This infamous scheme utilizes message boards and e-mails to tout a stock the con artists own in a small, thinly traded company. The stock price rises as people begin purchasing. Once it peaks, the crooks sell, stop all the touting and the price inevitably tumbles.

"Prime bank notes." These vehicles promising high returns don't exist but have been pitched for years by fraudulent companies assuring people that Saudi princes and the Rockefellers invest in them regularly. Another offering, the promissory note, isn't necessarily fraudulent, but nonetheless highly risky and sometimes fraudulent.

"Risk-free" investments. Volatile commodities and offshore investments are often touted as sure things, overlooking their volatility and giving no information as to the reputation of the company offering them.

Bogus credit cards. These unsolicited e-mail messages often target people with credit problems. They ask for an up-front fee and may keep it without ever providing a card.

Prizes and sweepstakes. It's illegal for a company to require that you buy something or pay a fee to claim a prize. No legitimate sweepstakes company asks for your credit card, Social Security or bank account numbers. Legitimate sweepstakes companies tell you exactly how a contest works and your odds of winning.

Work-at-home offers. The company may not actually be offering to employ you but rather to sell you training and materials or to have you find customers. Get all details, find out whether there's really a market for the work-at-home job in question and make a point to know the refund policy.

To illustrate how easily individuals are lured by a pretty Web site, the Securities and Exchange Commission recently launched a fake site of its own called www.growthventure.com/grdi for a non-existing company called Guaranteed Returns Diversified Inc.

If you give it a look, you'll see that it offers the "opportunity" to invest $25,000 in a hedge fund, far less than the typical initial minimum required for these volatile vehicles.

"Without doing any promotion, we had 50,000 hits on the site right away and many, many inquiries to the e-mail address on the site," said Susan Wyderko, director of the SEC Office of Investor Education and Assistance, Washington, D.C. "We hope that people who hear about our 'fake' scam learn something about real scams in the process."


Andrew Leckey answers questions only through the column. Address questions to Andrew Leckey, "Successful Investing," P.M.B. 184, 369-B Third St., San Rafael, Calif. 94901-3581, or by e-mail at andrewinv@aol.com.