Advance payment scams


Overview

Advance fee fraud is when fraudsters target victims to make advance or upfront payments for goods, services and/or financial gains that do not materialise.

Variation(s)

Foreign money offers

Foreign money offers "requesting an urgent business transaction" usually the transfer of millions of dollars, are received by consumers and business' via mail, email and fax. Commonly referred to as "Nigerian Letter Scams" or "West African Fraud Letters", the sender stresses the urgency, confidentiality and importance of trust and honesty to sway the reader into believing the validity of the request by claiming to be a Doctor and/or a corporate entity, possibly government, with a major corporation in Nigeria.

Typically, after responding to the letter a new request for further information will follow along with the requirements and procedure to complete the transaction. The fraudster will normally ask for and advance fee to cover processing, in some cases arrange to meet in person to discuss the transfer.

Most letters provide a breakdown, in percentage, of money each party will receive once the transaction is final. (i.e.: 30% to the account holder, 60% to the fraudster and his partners and 10% will be used in offsetting taxes, local and foreign expenses)

Please contact CAFC by phone if contact has been made with a "Nigerian" representative.

Letter (Inheritance)

A very wealthy stranger has died and you are asked to assist with banking and to share the wealth. You may be asked to be a trustee or to stand in as a long lost heir of a deceased's fortune. A web site may even be provided so you can confirm the tragic death of some wealthy individual. The fortune may be said to be in cash in a safety deposit box, evidenced by a Certificate of Deposit. The message may have political overtones or refer to a Diplomat in another country who will broker the transfer of the money, often through some 'back door' arrangement. You may be provided an overseas phone number and asked to indicate whether or not you are interested so that alternative plans can be made should you decide not to participate.

Warning sign(s) - How to protect yourself

Beware of tragic deaths and persons looking for your assistance in moving large amounts of money and to fulfill the role of trustee or heir. Legitimate estates do not solicit trustees or heirs in this manner and do not promise to carry out the exercise 'through the back door'. If someone promises you 20% of a fortune for doing little else than provide banking details, it is too good to be true, and if it is too good to be true, it probably is not true. This inheritance scheme could end here with the takeover of your bank account and depletion of your funds by a number of fraudulent means. A second phase of the scheme could be invoked, in which you are asked to pay an up front fee in order to collect your so-called inheritance. You do not normally pay money to collect money.

CAFC advises consumers not to open unsolicited emails. Spam usually means scam and the message may contain a virus that can damage your computer.

Copies of the letters (regardless of country origin) can be directly forwarded to CAFC via fax or by email.

Lottery

There is an ever-growing number of scam lottery emails advising consumers they have won a jackpot. We ask that you consider the following when you receive a solicitation of this kind as lotteries do not; notify winners by email, randomly select email addresses to award prizes to, use free email accounts (Yahoo, Hotmail, etc) to communicate with you, tell you to call a mobile phone number, tell you to keep your winnings secret, ask a winner to pay any fees up front (like taxes or a security deposit) to receive a prize, lottery or sweepstake!

You cannot win without first buying a lottery ticket!

Prize pitch

Consumers are told they have been specially selected to win a prize, or have been awarded one of three or two of five prizes. These prizes usually include cash or a vehicle. You must purchase a product and pay in advance to receive your prize. These products may include; coin collections, personalized pen sets, etc. The products are generally cheap or overpriced, but may sound valuable over the phone.

Remember, in a legitimate contest you do not have to purchase a product to qualify for a prize.

Prize pitch recovery

If you were a victim of the prize pitch scheme, you are likely to be called again by someone promising to get your money back for you. Be careful not to lose more money to this common practice.

Example(s)

Law Enforcement

A caller claiming to be a law enforcement officer tells you that money has been seized, and that their records indicate that you have lost money to the company or companies. They will help you recover the money you have lost for a small fee. If money is seized, you will be advised by a police agency but they will never request money in advance for any reason.

Company Aquisition

The caller may claim that they have bought out a particular company that promised you prizes that were never sent to you. They are an honest company, and they are eager to get those prizes right out to you if you can pay some related costs.

Sample(s)

Fraudulent use of the Royal Canadian Mounted Police letterhead or logo.

Sweepstake

After entering a fake sweepstakes contest, you will receive a call within two to four weeks from a fraudulent telemarketer. This person will usually identify themselves as a lawyer, judge, customs agent or other official. They will represent themselves as an agent for a particular company. You will be told that you have won a large cash award, but money must be sent up front for taxes, etc.

Loan

Ads that promise loans generally appear in classified sections of local and national newspapers, magazines and tabloids.

Some companies claim they can guarantee you a loan even if you have bad credit or no credit. They usually request an up front fee, which may range from hundreds to thousands of dollars. Once you send your money to these companies, you never get your promised loan and you cannot get your money back. If you cannot get a loan through traditional lending institutions, it is unlikely that you'll get one in response to a classified ad. Ask the loan company to take the amount of their fee off of the total amount of the loan that was promised you. In most jurisdictions, it is illegal for a company to request an up front fee prior to obtaining a loan.

Remember: simply advertising through recognized media outlets does not ensure the legitimacy of the company behind the ad.

Employment offers

Any false, deceptive or misleading solicitation offering employment and requesting an advance fee to secure the job or obtain the materials to perform the job or any job offer involving money transfer or wiring funds related to cashing monetary instruments.

The "mystery shopper" scam is still victimizing Canadian consumers. The victim answers an enticing ad to become a mystery shopper. The "employer" sends a letter, with mystery shopping tasks to be completed, and a cheque to help the victim fulfill his/her mystery shopping tasks. The victim will likely cash the cheque he/she was given first. One of the tasks will be to use a money transfer company and wire a large portion of the money to a name provided, in order to test the company's procedure and customer service skills. The victim will find out later that the cheque is counterfeit, thus making the victim accountable to pay for the funds he/she wired.

Puppy classifieds

Classifieds adverts targeting dog lovers with the promise a puppy when all the necessary fees are paid. Adverts, using stolen pictures, are placed in newspapers or the Internet and usually involve someone that has moved or is moving or resides in another country.

The seller will ask for money in advance and refer them to a money wiring service such as Western Union or Money Gram. The advance fee in this case, being for the purchase of the puppy, shipping and customs charges. The buyer waits for few days and when they do not receive the puppy attempts to contact the seller, but with no answer.

Warning sign(s) - How to protect yourself

Know whom you are dealing with, independently confirm your seller's name, street, address, and telephone number. Resist pressure to "act now." If an offer sounds too good to be true it usually is. If the buyer wants to use a service you have not heard of, be sure to check it out to be sure it is reliable. Check its Web site, call its customer service hotline, and read its terms of agreement and privacy policy. If you do not feel comfortable with the service, do not use it. Contact your local office of the Better Business Bureau) The Canadian Anti-Fraud Centre.

Were you a victim?

Canadian Anti-Fraud Centre
Toll-free: 1-888-495-8501

Competition Bureau of Canada
Toll-free: 1-800-348-5358

Ontario Provincial Police
Toll-free: 1-888-310-1122

Financial Consumer Agency of Canada
Toll-free: 1-866-461-3222

Better Business Bureau
(BBB Locator Tool)


Fraud: Recognize, report and stop it!

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