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[Celtman]

Just been reading the below on MSN, I would guess most of us here have had the email from Nigeria.

Spams, scams and confidence
The Canadian lottery scam, the Nigerian money-laundering swindle, even those dodgy calls telling us we’ve won a holiday... surely nobody falls for them? Alas, yes. We look at some of the biggest scams and frauds today, and at how the fraudsters manage to persuade us to part with our money - and how you can avoid giving it to them. Carol Davis explores the dark end

Travelling to Amsterdam with £4,700 in cash was the riskiest thing the 58-year old teacher had ever done, but she believed the risk was worth it to help a victim of political oppression. The teacher had brought the £4,700 to Amsterdam’s Schiphol airport to swap it for £3 million of incarcerated Nigeria loot and, as well as paying off her debts, to altruistically to help church charities.

But the risky business that fuelled the dream of “something for next to nothing” quickly turned into a nightmare. Ann had responded to an e-mail that begged her to keep the operation top secret, and when she met the gang in Amsterdam she was told she needed another £23,450 to buy a certificate giving official permission to take the money out of the country.

She borrowed the £23,450 from a relative but when she paid up, before she could get the £3 million, the gang then showed her a tax demand, supposedly from the Netherlands government, for a further £126,000. But Ann was unconvinced; the document didn’t look right and, when Ann showed it to the Dutch embassy in London, staff there were almost 100 per cent certain it was fraud.







The incident left Ann badly shaken, and up to her eyes in £28,150 worth of debt. Her house is remortgaged so she can begin to pay back the money she borrowed. She will be in debt for the rest of her life, and is too frightened to be named or photographed - but she wants to warn other people that it could happen to anyone.

It could, and it does. The Nigerian money offer has been doing the rounds for years, in different guises. The format is the same - you receive a letter or e-mail from someone claiming to hold millions in cash, and asking for your help to get the stash out of a troubled country. In return, you get a share of the loot - 30 per cent is common - and another 10 per cent for expenses. In Nigeria, the scam is called simply 419 because it is a crime under section 419 of that country’s penal code.

The details change, but the idea is the same. And once you respond, you show that your e-mail address is live and your name is then placed on a “suckers’ list” and passed on to other fraudsters. One reader who sent back a cautious “how can I help?” e-mail got messages from someone claiming to be a dying Dubai merchant keen to share his millions, a Chinese banker seeking to smuggle money from Iraq, and the daughter of a murdered businessman offering a share of his fortune.

“The Advance Fee Fraud has been operating for some considerable time, which suggests that it continues to be successful for its operators,” says a spokesman for the Department of Trade and Industry. “All that’s needed are details of you or your company’s bank account, and perhaps blank pages of letterhead. Companies and individuals responding to this approach later receive another letter asking for money as a last-minute bribe.

“There is evidence from around the world that company directors, lawyers and other professional people have lost significant amounts of cash. And, inevitably, having parted with the money, they never heard from their African business partner again. Others have had personal and company bank accounts emptied of money.”

So widespread is this fraud that the National Criminal Intelligence Service now has a West African branch, and advises strongly against replying to these messages, which are sent by professional, organised criminals. “Don’t reply to these requests,” urges a spokesperson. “Never, ever reveal your bank details to strangers.”

Revealing those details, even inadvertently, can be horribly easy. One man sent a cheque for a few hundred pounds to an orphaned Ugandan schoolgirl, and then received a message from his bank querying the £3,800 bank transfer he had apparently authorised too.

And signs are that scams like these are growing, as e-mails, faxes and mobile phones make communication easier. For every fraudster the authorities can find and clamp down on, there are dozens of others - and the sophistication of the schemes is growing too.

“Con tricks exist everywhere, but the arrival of the Internet has spawned a boom in scams piped direct to people’s homes,” says Ian Lewis, partner at Rowe Cohen Solicitors in Manchester. “The reason why e-mails like the Nigerian scam continue to circulate is because, unfortunately, someone somewhere falls for it.

“People must beware of e-mails promising them riches in return for their bank details. It’s very difficult for the authorities to track down the source of the
e-mails, and even harder to recover your cash once it has been handed over.”
And although the authorities are setting up new initiatives to catch the fraudsters, they face a near impossible task. “These people are extremely dynamic and capable, and the profits go straight into organised crime,” says the NCIS spokesperson. “And they’re very hard to catch: e-mail addresses and mobile numbers change daily, because, at the end of the day, they drop the mobile phone into the bin - literally.”

Infinite riches
Have you won the Canadian lottery? Thousands in Britain have, and the lesson is that if it sounds too good to be true, it probably is.

The prize is massive - but there’s a catch. Before you can claim your huge Canadian, Spanish or Australian prize, you have to send money for tax and processing fees. And those fees can mount up - cases recently reported to the Office of Fair Trading include one man who lost £67,000 in payments as he tried to get his hands on a prize that didn’t exist.

“The elderly are particularly at risk,” says a spokesperson for the Office of Fair Trading. “More than 80 per cent of the victims are over 65, and the caller may pose as a government official, customs officer or lawyer. Most victims do not report the crime through embarrassment. Some fear that they may lose control of their finances because of their age.”

Around a third of UK scams are based in Europe, says the OFT - and even though the OFT now has the power to close them down, it takes time and the fraudsters can stay one step ahead. And while the Canadian authorities have closed down almost 40 fraudulent telemarketing schemes over the last few years following UK complaints, the huge profits to be made mean new schemes are constantly being set up.

Now agencies like the OFT and Advertising Standards Authority (ASA) are joining forces with their counterparts abroad, but the problem prevails. “Regulators abroad have also found themselves powerless as the advertisers often mail outside of the country they are based in and seem to move from one PO Box number to another,” says Claire Forbes of the ASA. “But we hope that by joining with other bodies, sharing information and combining sanctions, these mailings can be stopped from misleading consumers into parting with sums of money. New procedures have been developed to ‘fast track’ problematic mailings.”

But in the meantime, hundreds of thousands of people are being targeted to invest in art, jewellery, wine, worthless shares and property for development. “The goods turn out to have little or no real investment potential, or may be sold at such an inflated price that a loss is almost guaranteed,” says Consumer Minister Gerry Sutcliffe.

The DTI has closed down 17 such companies, but estimates that another £350m is still invested with them - and the consequences can be severe. One nurse and mother of four lost her entire family savings after being tricked into investing in derelict property.

Banking scams

Fraudsters closed down the Nationwide online banking facility when they targeted its customers in last October. E-mails purporting to be from Britain’s largest building society were sent to people all over the UK asking them to verify their details and type in their passwords too.

And as the scam merchants go on hitting the major financial institutions, banks including Barclays, Lloyds TSB, NatWest and the Halifax have closed their online banking facilities as a precaution. “The e-mail had a link to the website, but if you looked closely it was a fake site,” says Jason Clarke of the Halifax, “because the colours were wrong and the URL was wrong.

“Customers were asked to enter their log-on IDs, passwords and other security details, but none of our customers fell for it. We would never, ever e-mail our customers asking for that information, but we took our site offline as a precaution. The problem is getting hold of the fraudsters, who could be operating from anywhere.”

Other banks agree. “NatWest would never ask customers to provide us with their security details,” says Nat West’s Ronan Kelleher. “If you receive an e-mail like this you should not respond, and you should contact the Helpdesk immediately.” Key in your internet banking details, and within minutes the fraudsters could be emptying your account.

Insurance fraud

But the scams which are now targeting growing numbers of British consumers pale into insignificance beside the sheer scale of insurance fraud, which hits us all in the pocket. The Association of British Insurers calculates that insurance fraud costs the industry a whopping £1bn annually - and that is reflected in the increase in premiums.

Who are the fraudsters? One ABI survey showed that male married professionals, insured to the hilt, are the worst - a prime market for insurers, but among the most fraudulent. And ABI research shows that a massive 48 per cent of us would not rule out making a false claim.

“Why do they do it?” says ABI spokesman Malcolm Tarling. “Because people think they can get away with it, and because they think it’s a victimless crime - they think the insurers are making so much money that it won’t hurt. Or they see it as a just return on the premiums they pay all year long. But this is likely to drive up premiums for all of us.”

And increasing numbers are being caught, says Tarling. “Some are caught through their own stupidity, like the lady who reported her watch stolen on holiday. The Cypriot police were suspicious and asked her friend to turn out her bag, and there was the watch. Others are reported by friends and neighbours, who resent that people are making money at their expense and bragging about it.”

Yet the fraudsters’ days are numbered, as insurers clamp down. Insurance giant AIG is now experimenting with psychological testing, Admiral says that the use of lie detectors means a quarter of vehicle theft claims are now being withdrawn, and voice stress analysis technology is increasingly used to detect tension in callers’ voices.

And weeding out the fraudsters can help speed up genuine claims, says esure, which is trying Voice Risk Analysis. One man who called to report his car stolen from outside his house displayed high stress levels, and when insurers investigated further, they found the source of his stress: his car had indeed been stolen - not from the drive, though, but from the car park where he was meeting his mistress. “His claim was genuine, however, so we were able to process it all the faster,” says Gordon Hannah, esure’s head of claims.

“We want to reward honest claimants with faster service and lower premiums,” adds Gordon Hannah. “Voice Risk Analysis cannot disadvantage a genuine claimant - it will only ever speed up their claim. We believe the honest majority is fed up with funding the cost of fraud.” As the cost of exaggerated and fraudulent claims threatens to increase the cost of insurance for everyone, insurance companies are also working on data-sharing to pinpoint the fraudsters.

From insurance scams which push up everyone’s premiums to non-existent lottery wins and heart-rending letters offering a share in millions stashed in Africa, every one of us is a victim of fraud - whether we end up paying more for our car and home insurance, or whenever we run the risk of being taken in by a dodgy e-mail or letter.

But 58-year old Ann was lucky - sort of. She escaped with no more than a massive debt, but others tell of kidnappings - or of being held incommunicado in a hotel room for the entire weekend until they have handed over everything. “Once you’re in that far, you’re in the web and your money is effectively theirs,” says the NCIS spokesperson. “Don’t be a mug, and don’t fall for it in the first place.”

It’s a bad old world we live in, and using a bit of sense will help you avoid the worst of the growing number of 21st century scams.

Office of Fair Trading www.oft.gov.uk

Canadian lottery scam helpline Tel: 020 7211 8111

Department of Trade and Industry www.dti.gov.uk

Advertising Standards Authority www.asa.org.uk

National Criminal Intelligence Service www.ncis.gov.uk

Nigerian Fraudwatch www.nigerianfraudwatch.org
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