By Jason Scuglik

Widely known through the old “Nigerian Prince” emails, advance fee scams promise fantastic financial opportunities – a prize, an inheritance, a job – all for the price of a seemingly harmless upfront fee.

Scammers might say the advance payment is necessary to cover costs like taxes, official charges or processing fees. However, once you pay the fee, new excuses for more fees arise, each requiring another payment. The scam can continue until you have little money left, and the big reward you were promised never occurs.

The goal of the advance fee scammers is to trick you out of your money – and sometimes, your personal information.

Learn more:
“You’ve won! Now pay us” is always a scam, from the Federal Trade Commission
Nigerian Scams, from AARP
Advance Fee Fraud, from Investor.gov

What to beware of

Common warning signs that can help you spot a potential advance fee scam:

Requests to pay money to receive money or a job. Legitimate businesses or organizations usually don’t ask you to pay a fee to receive money (like a prize or inheritance) or to accept a job offer.

Poorly written messages. Misspellings, grammar errors and awkward wording can be signs of a scam.

Requests for unusual or hard-to-trace payment methods. Legitimate businesses generally offer more standard and secure ways to pay. Be suspicious if someone asks you to send money using:

  • Wire transfers (especially to an individual instead of a known company).
  • Gift cards (by asking you to buy them and then provide the card numbers and PINs).
  • Cryptocurrency (a type of digital money that is difficult to track).

High-pressure tactics. Scammers often try to make you feel like you must act immediately. They create urgency to stop you from thinking clearly, talking to others or noticing the warning signs.

How to protect yourself from advance fee fraud

Always take your time to carefully check out any offer or request that involves sending money or providing your personal information. Once you send money or share personal details with a scammer, it is often difficult – sometimes impossible – to undo the damage.

If you suspect you’re dealing with an advance fee scam:

  1. Stop communicating with the person or company immediately.
  2. Do not send any money or share more personal information.
  3. Talk to someone you trust who is not involved in the situation, like a family member, a trusted friend or a caregiver.
  4. Contact your bank or financial institution right away, especially if you have already sent money or shared banking details.
  5. Report the scam to local law enforcement to help prevent others from being scammed. You can also report it to the Federal Trade Commission (FTC) at ReportFraud.ftc.gov.

A key guideline to live by is that if an offer seems too good to be true, it probably is. Advance fee scams are a prime example. Many offers that sound incredible are, unfortunately, scams designed to trick people out of their money.

Jason Scuglik is information systems administrator at Landaas & Company, LLC.

(Heads Up is an occasional alert on consumer and investment scams.)