What are 419 scams?

Dear Sir, I'm writing to you on behalf of a Nigerian government contractor ? One of the most well-known scams on the Internet is the 419 scam, also known as a Nigerian Advance Fee scam or a lottery scam. Arriving in your inbox, the scam offers you huge financial rewards, if you first send a smaller amount to the fraudster to help make the big bucks accessible by covering expenses such as banking fees and administrative costs. If you take the bait, the scammers will continue to ask for money till kingdom come and of course the final payoff never happens.

419 scams have taken their name from the Nigerian legal code that they violate and they have been around since the start of this millenium, when online scammers operating out of Nigeria began defrauding victims of tens of millions of dollars. Quickly financial fraud became one of the three largest industries in Nigeria and in 2001 the scams had gotten so extensive that the U.S. government told the West African country to take steps to decrease 419 crimes or face sanctions.

Despite of these threats, fraudsters contiuned spitting out 419 scams and the idea spread to online scammers throughout the world. According to analysts, the total losses from 419 scams in 2005 were $520 million (?275m) in the UK and $720 million in the US.

In June 2007, Dutch police arrested 111 suspected 419 scammers - many of which were from West Africa (mainly Nigeria) - following a seven-month investigation. And in August 2007, six men with ties to a West African 419 network were arrested in the Netherlands over an Internet scam that relieved a victim of $1.5m. Also in 2007, Dutch police arrested a Nigerian man - allegedly belonging to a major 419 scam operation - with ?1.2m in his pockets.

So the traditional 419 scam is still around and we need to look no further back than January 2008 to find the latest massive attack, when about a dozen universities and colleges in the US and some European schools were hit.

A recent twist on the 419 scam is the fake-check scam: A con artist e-mails you to tell you've won the lottery and a check soon arrives. You deposit it and wire back a so-called processing fee ? and before you realize that the original check was fake, your money is gone. According to the National Consumers League in the US, fake-check scams have now become the third most prevalent form of Internet fraud.

During eight months of 2007, the US Postal Service intercepted more than $2 billion in bad checks bound for the United States, originating from places like Nigeria and the Netherlands. And in October 2007, thousands of fake checks worth about ?8m ($16.2m) were seized in Nigeria in an attack on international e-mail scams. The checks were destined for the UK, intended to be offered as prizes in exchange for a fee.

Other recent variants on the 419 theme include love schemes taking advantage of lonely hearts on dating sites. The scammer promises to move and the victim receives a fake check for travel expenses and is asked to wire money back to the scammer. Naturally, the dream lover never shows up.