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Advance fee scams 

Dubious offers from overseas

As if we didn’t have enough home-grown rorts and rip-offs, it seems more and more NSW consumers are falling for scams from exotic, far away places.

These are known as advance fee frauds and here are some examples of how they work.

Nigerian scams

Many of us are drawn to offers promising a lot for a little. When you combine this fact with perceptions that business ethics in developing nations leave something to be desired, it’s not hard to see why the Nigerian sting has met with some success in Australia.

These types of advance fee frauds, or so called ‘Nigerian scams’ are extremely common. In fact, they originated hundreds of years ago. They do not all come from Nigeria, but they all appeal to the desire to get something for nothing.

Businesses and individuals continue to receive letters said to be written by a top official with the Nigerian National Petroleum Corporation offering them the opportunity to share in a $38.5 million bonanza. Marked strictly confidential, the letter begins...

‘Dear Sir, We want a reliable person who could assist us to transfer the sum of thirty eight million, five hundred thousand dollars (38.5M) into his account. We have agreed that you will be entitled to 30 percent of the total sum, 60 percent for us while 10 percent (will be set aside) for any expenses while transacting the business’.

The writer goes on to explain that the $38.5 million was over-invoiced from a deliberately inflated government contract and he wants to share the action with you. Because Nigerian civil servants are forbidden to operate foreign bank accounts, he desperately seeks your help. All that is required are details of your company’s bank account and a few blank pages of company letterhead. Sounds simple, doesn’t it?

There is a darker side. The companies and individuals responding to this offer subsequently receive another letter asking for money to cover a last minute bribe. There have been reports of company directors and even lawyers coughing up significant amounts of cash. And you guessed it. They never hear from their Nigerian business partner again. They can wave their cash good-bye.

Xpress Priority

A recent decision by the NSW Supreme Court to order the destruction of the Canadian scam letters, seized late last year by NSW Fair Trading was a first for Australia. A ground breaking court decision resulted in the destroying of more than 200,000 scam mail letters, ensuring that they never reached the hands of unsuspecting consumers.

The letters, with the appearance of a fake cheque promised a ‘cash’ windfall of $13,000 – provided the consumer sent $49.95 first.

If each of those 200,000 letters had been received and responded to, it would have milked consumers some $10 million of their hard earned money – for little or nothing in return.

The Court found that the mail was misleading and deceptive and fitted the broad description of scam mail. In addition to ordering the destruction of the intercepted mail, the Court banned Xpress Priority and its affiliates from sending unsolicited mail to Sydney for distribution to NSW addresses and elsewhere.

This decision mirrored a similar decision in May 2001 when the Supreme Court authorised Fair Trading to return 5,500 cheques and credit card payments – of around $150,000 in value – to NSW consumers, preventing the money from getting in the hands of con artists in Canada. The organisation known as Boss Communications offered clairvoyants’ reports and bogus lottery winnings – but asked for fees of up to $30 up-front. The Court also permanently banned Boss Communications from mailing scam letters to any part of Australia.

Delete it, destroy it, hang up!

So what is your best defence against scams like this? Don’t respond! Don't act on them! Don't provide any of your personal or financial details. 

You can also refer the correspondence to NSW Fair Trading or report the scam through our online Report a scam form if it is not on the Recent scams list.