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To protect the masses, we donate hours of time to get fake escrows shut down. If we saved you from sending a check or wire transfer that would have cost you thousands of dollars, please use the link to the left to donate to the site and keep this crusade against the scammers going. |
There are several different versions of the Nigerian Scam. Common examples are the 419 Scam, or the Advance Fee Nigerian Scam. We'll review them all here. I call this first scam the Nigerian Used Car Counterfeit Cashier's Check Scam.
Before we get started, let's review briefly 2 common myths and misconceptions that Americans have about banking:
Banking
Myth #1 : "A bank draft or cashier's check is as good as cash, right?"
Wow, bad call. Everyone is under the false impression that bank drafts
are as good as cash. There are tons of counterfeit cashier's checks floating
around that scam people every day. Counterfeit cashier's check fraud is everywhere on every type of
financial instrument. This
holds true for all money orders, bearer bonds, and other financial instruments.
Even the post office has been deluged with counterfeit postal money orders.
People don't check for the few post office watermarks which could
instantly identify counterfeit money orders forged to look like
official post office money orders. The problem is so out of control, that no
bank is safe from having their cashier's checks counterfeited. It happens to
the smallest regional bank, all the way up to Bank Of America. In
fact, look at the
FDIC Monthly Special Alerts List. Month after month, it's filled with
counterfeit check notices and stolen bank draft checks from banks all over the
country. Most scammer's are too lazy to duplicate the perforated edges top
and bottom on legitimate cashier's checks. It should take you .025 second
to determine fake check if the perforations are missing. Let these words forever ring in the
back of your mind in any of your financial dealings going forward:
A Cashier's Check Is A Worthless Piece Of Toilet Paper Until It Clears The Issuing Bank.
Banking
Myth #2: "Bank drafts or cashiers checks clear the next day, right?"
Wrong again, another urban legend exposed. Propagating the
problem further, many bank tellers, ignorant of their own bank's internal
operations, are disseminating bad information to their customers,
telling them the bank drafts clear in 24-48 hours. What really happens is
that per the 1992 Federal Reserve Board Regulation CC, the bank MUST make the funds
available in you account in 48 hours, but the check has not cleared/bounced yet. Get the
picture? Two different events, the bank makes funds available, then the
check either clears or bounces about a week later, after bouncing around to
incorrect Federal Reserve locations, or bank accounts. Virtually no one
understands the big picture mechanics behind depositing checks, including
tellers. The average bank draft or
cashiers check can take 2 weeks to clear, not
2 days. Yet everyone thinks cashiers checks are as good as cash, and they
think they clear
the next day. Bottom line, the scammers know the banking system well, and
capitalize on this arbitrage of time quite well. The banks make the funds
available in your bank account within 48 hours of your deposit, days before the
cashiers check clears- or bounces. Then they take the money back out of
your account, and blacklist you.
Nigerian Used Car Counterfeit Cashier's Check Scam:
How the Nigerian scam works:
This is similar to the other Cashier's Check Scams, but the buyer/scammer does not come to your home. Instead, the crime is executed via email and mail fraud using FedEx
or other official looking overnight services. There's also
a dash of wire fraud thrown in for added flavor. You (the victim)
put your used Honda Accord (or any car, insert your car here) up for sale on
Yahoo Autos, Autotrader.com or eBay for $11,500. You get contacted via email from someone
in Nigeria, or sometimes they claim to be from the U.K. It's ironic, the
scammers like to use the email services of the Internet's greatest enabler of
spam and criminal activity, Yahoo. Some of them may be spoofing the "from"
address too, so it might not always be Yahoo. The "buyer" is interested in
buying your car.
The buyer/scammer usually claims to be some huge overseas shipping company with a client interested in your car, or they claim to be in Nigeria and can't get to the U.S. But his friend in the U.S. who owes him $20,000 can buy the car from you on his behalf. So the scammer proposes that he have his friend just send you the full $20,000, and you "wire the remaining $8,500 back to the buyer", who will arrange a transport truck to come get the car from you. Skeptical, you think to yourself, this sounds like a scam so you tell the "buyer" you don't feel comfortable. He assures you everything is fine and tells you his friend is about to FedEx you a cashier's check for $20,000. He makes you feel better when he insists for you to wait until the check clears before you wire him the remaining $8500.
Keep in mind Nigerians are nice people, and have taken a bad rap for this crime, but the fact remains that most of instances of this scam originate in Nigeria. I have posed as a victim many times and received phony checks from these scammers sent to me overnight from Nigeria.
So the "buyer" sends you a real check...or does he?
The next day the cashier's check arrives via FedEx. Wow, you think, the buyer WAS serious! It looks official. Ok, you'll play along, then. So you go to your bank and deposit the cashiers check, still wondering if it will cash. 48 hours later per Federal Reserve Board Regulation CC, your bank makes the $20,000 available in your account before the check clears (bounces). This is what banks do. Wow, you think, the check cleared and the money is in my account! Although the scammers even suggested you wait 3 weeks, you see the money in your account right now! You could not be more wrong. You just foolishly deposited a third party check into your bank account. Your soon to be short lived elation is caused by your belief in Banking Myth #1, and Banking Myth #2 near the top of this page. So off you go to Western Union to wire the buyer/scammer his "remaining" $8500. Now you are happy because you have $11,500 in your bank account, and a transporter will pick up your car to take it to the "buyer". You could not be more wrong.
Now the bad news from your bank...The Check bounced!
A week later, your bank drops a bombshell in your lap. The cashier's check you
deposited last week from the scammers has bounced, the bank took the money back
out of your account, and you have a negative
balance in your checking account because you had already withdrew that money to
Western Union to the scammer. The bank demands you pay them
the negative balance. Some victims get put on the
ChexSystems blacklist that prevents
them from ever opening another checking account at any bank. Some victims
have been arrested for trying to cash fraudulent checks, which they had not idea
were fraudulent. For the love of God, if some victims had only waited a week until the
check was found to be counterfeit before they sent money off via Western Union,
they could have been saved! What makes this scam work, is the scammers
know it really takes over a week for checks to officially clear, and it will be
too late for you. They understand how the float works, you don't.
They know the time space continuum, you don't.
No one cares about your problem
Oh, I forgot to tell you, the Nigerian government could care less about your
little problem, and does very little to stop these crimes. The Secret
Service will tell you to forget it when you call them, because once money is
wired to Europe and picked up, it's out of their jurisdiction, and they cannot
reverse a Western Union transfer. Foreign
governments offer little or no help at all, so your best remedy is to avoid this
trap in the first place, via education. Once you fall into this trap,
there is no way out. No one wants to waste time on it to help you because
Western Union transfers cannot be undone, or reversed or cancelled or disputed
or anything. Western Union did the job you paid them to do. They
wired cash to your recipient, who collected it already, so they cannot give it
back to you. Jesus cannot get your money back for you.
