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Upfront payment scams

What upfront payment scams look like and how they work.

The Set-Up

You're offered the key to a large amount of money.

The Hook

To get the money you must send an upfront fee − for legal, administration or processing costs, perhaps.

The Sting

You send tens, hundreds, even thousands of dollars. But you never see your money again and all the 'fees' you've paid are gone.

How upfront payment scams work

Asking for an upfront payment is a common trait of many scams. The scam usually works in one of two ways:

  • Inviting you to unlock a large amount of money by sending an upfront fee.
  • Appearing to overpay you for a transaction, product or service then asking you to send a refund, or to forward the balance on to somebody else.

Types of upfront payment scams

Nigerian scam

It’s commonly known as the 'Nigerian’ or 'Nigerian 419' scam. But it can come from anywhere in the world. It works like this:

  • You receive an unexpected text, email or letter.
  • The letter is supposedly from someone connected to a senior government official - such as a Prince, a top executive or public servant - most commonly in a West African nation such as Nigeria.
  • They want to use your bank account to get funds out of their country - usually huge amounts in the tens of millions of US dollars.
  • In return for transferring funds you’re promised a large chunk of money.
  • If you respond, you’ll be asked for your bank details. You’ll also be asked for some ‘fees’ in advance so that the transfer can be made.
  • The fees can start out as small amounts, creating a false sense of security. However, the scammers know that once you’ve invested some money in the scam, you’re much less likely to walk away. They will ask for higher and higher amounts for new fees that need to be paid before you can receive your 'reward'.

Money may be 'trapped' for dramatic-sounding reasons such as civil wars, coups or exotic natural resources. Inheritances may be 'trapped' by government restrictions or local taxes.
The scammers may have a sad or emotionally involving story to tell, in very polite and respectful language, in deliberately broken English to make you feel that you are dealing with simple people.
The scammers are asking you to launder money. Even if their claims were true, money laundering is illegal.

Inheritance/Estate Funds Scams

You’re approached by somebody claiming to be from an estate company. They’re trying to track down the beneficiaries of a will. Apparently you’re the 'next of kin'. They may refer to an event like an airline crash to make the death sound more convincing. You may check it out and find that there is a dead person who shares your last name. They want you to send legal fees in advance of receiving your inheritance. Of course there is no inheritance or long-lost relative, and the ‘estate company’ will disappear once they’ve got your funds.

Other scams that may ask you to make an upfront payment:

Online dating scams
Online trading scams
Employment scams
Investment scams
Lottery and competition scams
Flatmate scams
Small business scams

Protect yourself from upfront money transfer scams 

  • Don’t respond to an unsolicited email or letter. Never click 'unsubscribe' on a spam email: it only tells spammers that you read spam. Delete the email, or throw the letter away, immediately. Don’t even respond as a joke: it confirms your email address, making you a repeat target for fraudsters.
  • If you’ve begun to pay ‘fees’ to a scammer, the only way to get the scam to stop is to stop paying. Once you’ve parted with some money, it can be tempting to see things through – just in case. But there is no reward waiting at the end of this process. You will never be paid.
  • Remember that money laundering is illegal. Never agree to transfer money for someone you do not know. Contact your bank if you have received money into your bank account that you believe to be illegal. If you have any problems contact the for guidance.

Visit the Banking Ombudsman website

Help protect others from upfront money transfer scams 

If you’ve been affected by an upfront payment scam, please help us to warn others by reporting it to Scamwatch. Your personal details will be treated in the strictest confidence.

Report your scam to us.

Last updated 19 November 2012

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