Two Letters Re: How to Thwart Nigerian Scammers: Demand Proof of Life

Wednesday, Dec 12, 2012

James, 
Another variation to watch out for is when the scammer asks you to pay using an escrow account supposedly managed by Amazon or eBay.
 
A too good to be true add is found, you respond, the scammer/seller tells you he sells using an eBay escrow account. The merchandise will ship to you after you send a check to Escrow. The scammer directs you to a link sent in the scammers/sellers email that appears to be an eBay site.
 
The scammer creates the illusion of security using a brand like eBay with some official looking legal contract showing how you are in control of the escrow and the funds will only be released once you get the merchandise and are happy with the transaction.

 
The reality is once the money is in the escrow account, everything disappears and you never see your merchandise. eBay will tell you they don’t operate an escrow service and your options to recover your money are slim to none. 

 
Your basic rules of thumb, poor sentence structure, punctuation, spelling and vaporware merchandise are all tell-tale signs.  When in doubt, push to see the merchandise live somehow. The scammer will redirect you back to the scam or ignore you since you are not taking the bait. Keep up the good work!
 
Regards, - Mark in Michigan

 

James,
I wanted to write and give your readers another word of caution regarding Nigerian scammers; my experience involves a much more sophisticated expression of the scam than is normal.

I had placed an ad in Craigslist to sell some Morgan silver dollars; I was emailed by an out of state party who inquired as to whether I would be willing to ship them. Normally this would be odd for a Craigslist ad, but I'd dealt with this several times legitimately with regards to metals trades so it didn't strike me as that out of the ordinary. He offered to send a check, which at the time I didn't mind (now I always require the money to be wired). When the check arrived it was for an amount less than we had agreed on; he told me to go ahead and deposit it and he would send me another check. I deposited the check and waited.

Suspicious about a few things (the email misspellings, the erroneous check amount) I emailed him again and insisted that we speak on the phone. After a little bit of back and forth (he claimed he was deaf) he agreed to let me speak with his lawyer. Soon after an American called from a California area code and assured me everything was ok. This certainly helped set my mind at ease.

During this time my bank (USAA) had confirmed deposit of the check and credited my checking account with the funds. I looked up the depository agreement and found that USAA promised that once funds were in the account for two business days it was a confirmed transfer and the check was good. I'm a bit more cautious, so I waited four business days and then called and spoke with a representative; he looked into the account and confirmed that the funds had transferred from the other bank and that the check had proven legitimate. Now having waited double the amount required by the depository agreement and confirmed from a bank representative that the first check was good and the second check (which had arrived and now been in the account for two business days) was showing good as well; having spoken with an American on the phone who confirmed it was good; I sent the coins.

The next business day USAA notified me that the checks had bounced and withdrew all of the deposited funds from my account; adding insult to injury they tacked on on a small penalty for having deposited fake checks (as if I did it on purpose). Outraged, I spent every business day for the next two weeks on the phone with USAA, demanding that they return the money they had confirmed was in my account; bounced checks were one thing, but once I'd been informed both in writing and in conversation that the money was in my account I expected my bank to stand behind what they had told me. After speaking with two separate resolution managers who robotically repeated: "we don't cover bounced checks" I finally quit calling.

In the meantime I was contacted by the scammer who offered my coins back if I joined him in his scheme. In an attempt to discover any information that might lead me (and thereby the police) to him, I played along as if I were interested. He outlined his nefarious plan: he scammed people in the United States and then recruited them to actually mail the checks (so they came from the US) and do much of the emailing (making the English more believable) and occasionally make phone calls for him (e.g., the fellow who called me); in exchange for their participation he offered them a scam commission and they slowly "earned" back the money that had been stolen from them as they stole from others. All of this information was obtained via internet chat; I took screen shots of all of it as it commenced. I was also able to obtain a list of the next 25 people he planned to scam, along with their email and mailing addresses.

As I played dumb and required more information I was able to glean the contact information for two of his minions and the name and ID information of another. I put together all of the information I had gathered and made an appointment at the nearest FBI station (the police report I had filed with the local police department had been ignored). When I met with the agent I explained the situation and handed over all of the information, highlighting the contact information for the Americans who had actively participated in scamming me. After thumbing through the information, he looked me in the eye and said: "Since you're in uniform, I'll shoot straight with you" (I'm an Air Force officer). "You've given us everything we need to catch at least a couple of these fellows. However, it's your choice," he continued, "I can tell you I'm going to look into it, walk in the back, file it, and never think about it again, or I can hand it back to you and you can walk out the door with it." Flabbergasted, I asked for an explanation. He replied: "Our fraud department is so busy that we don't even look at fraud cases that involve less than $10 million at stake. Your case, as much work as you've done on it, will never be examined." I attempted to explain that with as many folks as this one fellow had scammed it probably totaled $10 million, but he just shook his head and explained it had to happen in a single instance or it wasn't worth their time. Disgusted, I walked out. My tax dollars pay for the FBI but they'll never protect me unless I'm worth more than $10 million? In the end, the only effectual change I could make was contacting the 25 people whose information I'd been given and warn them that they were about to be scammed.

Was I foolish? In hindsight, yes. I now take extra precautions whenever I'm not dealing face to face. However, I think it comes down to the old saying: "Fool me once, shame on me..." I trusted my bank to interact on my behalf in the banking system and was only told after the fact (by one of the resolution managers I was eventually elevated to) that banks reserve the right to withdraw funds from their depositors account for the life of the account; it doesn't matter how much time has passed. I don't know if this is true or not, but two months after all of this went down I received an email from USAA notifying me that the depository agreement for all checking accounts had changed; when I looked at the list of changes, every single paragraph I had cited for how USAA had failed to hold up their end of the agreement had been adjusted. As far as banks go, USAA is among the best I've dealt with, but never doubt that they'll act in their best interest and leave the customer out to dry if that needs to happen.

As far as Nigerian scams go, they can get pretty sophisticated. Once I start dealing with Americans who know how to exploit at least some of the ins and outs of our banking system and will do the calling and emailing themselves, then most of the common rules of thumb for avoiding these types of scams go out the window.

Lessons learned:
- Deal face to face whenever possible. Accept only cash in small, worn bills. Few of us are intimately familiar with what crisp, brand new bills feel like and could be easily fooled by counterfeits. As the dollar inflates and bills began to get newer and less valuable, this is an added incentive to trade using "junk" silver - this is easily verifiable with a value that's easily discernible. Avoid larger denominations of metal; even silver rounds can be faked relatively easily.
- If buying long-distance, ask for proof of life like JWR suggested. However, this still doesn't guarantee they'll send the item once they receive your cash; try to deal only with businesses or dealers that have a legitimate storefront presence and a vested interest in not cheating you. If you know someone in the local area ask them to pick up and ship the item for you; that's putting a face-to-face presence in the mix.
- If selling long-distance, only accept cash via wire (think Western Union). Only ship items once you have literal cash in hand.

Consider this a plug for a libertarian mindset: banks may treat you great until they have to put their own money on the line to back up their word. Police may seem great until they're too busy to help you out. The FBI is great in theory, but don't trust your welfare to a federal agency. Be careful out there. - J.B.


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