Nigerian Scam Gangs Operate Like the Mafia

7 things you must do to sidestep the new Nigeran scam artists: Internet Scambusters #826

If you thought Nigerian scams were a thing of the past, we have bad news for you,

Not only are they still active, but they’re now in the hands of organized crime groups who are raking in billions of dollars.

In this week’s issue, we’ll tell you what they’re up to and how you can easily sidestep them by following a few simple rules.

And now for the main feature…

Nigerian Scam Gangs Operate Like the Mafia

Nigerian scam artists have moved into a whole new realm of crookery, targeting both individuals and small businesses.

While “traditional” Nigerian scams — you know, where you’re asked to help a supposed prince, lawyer, government or bank official smuggle money out of the country — are still happening, the crooks have also created a new bag of tricks.

Worse, organized crime gangs have moved in, adding a new and sinister dimension to the trickery.

Their con tricks extend well beyond the mythical fortune you’re supposed to get as your share of the loot.

The scale of their fraudulent crime was recently uncovered by security firm CrowdStrike.

According to tech magazine Wired, the gangs are now also targeting businesses, resulting in 40,000 incidents worldwide that have earned them more than $5 billion, between 2013 and 2016.

And they’re continuing to make millions from the old-style inheritance con trick, also known as a 419 scam (after the number of the Nigerian penal code that’s supposed to have outlawed them).

“These guys are more like a crew from the mafia back in the day…” Adam Meyers, CrowdStrike’s vice president of intelligence, was quoted as saying in the magazine.

“They’ve got their own music, their own language even. And there are pictures on social media where they’re flaunting what they’re doing. The whole idea is why invest hundreds of thousands of dollars to build your own malware when you can just convince someone to do something stupid?”

Instead of trying to dupe victims with just the old inheritance/cash-smuggling story, the classic 419 trick has morphed into a whole new set of fraudulent requests for money — romance scams, claims of being a rich orphan in need of an adult sponsor, and help with cash transfers from a civil-war-struck country such as Syria.

Psychology professor Frank McAndrew from Knox College in Illinois, says the reason 419 scams in their latest guises are so successful is that by nature many humans are just too trusting, especially when it comes to romance.

“We did not evolve to live in a world of strangers,” he says. “Our brains are wired to live in relatively small tribes in which everyone’s character and past behavior is well-known.

“For this reason, we overconfidently ascribe qualities to someone we’ve never met in person but have corresponded with. Relationships – and trust – can form quickly over email and social media.”
This makes us easy prey, he adds, with widows and widowers in the 45 to 75 years age group being most vulnerable.

Even when we suspect we might be on the receiving end of a scam, it’s often difficult to change course for two key reasons: first we don’t want to admit, not even to ourselves, that we screwed up; and second, we irrationally don’t want to give up hope of recouping our losses.

“So once someone invests money into something risky — whether it’s a pyramid scheme or a day at the casino — they may keep throwing good money after bad because it seems like the only way to get anything back,” says the professor.

The best defense is never to go down the enticing pathway that leads to a 419 fraud.

  • Don’t reply to emails asking for financial help, even those that offer money somewhere down the line or from someone seeking a romantic relationship.
  • Don’t ever send money to someone who offers you a prize, a reward or a simple repayment at some time in the future.
  • If you know of someone else who appears to be heading down the 419 route, encourage them to speak to the FBI or other law enforcement officers to check things out.

On the small business front, the gangs, who use names like the Black Axe Syndicate and the Yahoo Boys, are mainly working the so-called “email compromise” scam.

They used convincing-looking phishing emails and phone calls to identify key people who handle firms’ financial transactions, then send them further messages from supposed suppliers asking them to redirect payments to a hijacked bank account.

Or they may send them fake invoices, again linked to compromised bank accounts.

They’re determined too, trying multiple methods to get the information they need and sifting through hijacked inboxes to identify things like supplier names, account numbers, and so on.

According to Wired, they also have posed as an employee asking for a copy of the company’s official letterhead. They’ve even used Skype, posing as an employee and posting a photo of a genuine employee on-screen that looks like a frozen-video image.

We’ve written several times in the past about email compromises and outlined the steps small firms should take to protect themselves. These include:

  • Using two-factor authentication to make access to accounts more secure.
  • Keeping Internet security software up to date.
  • Limiting who has access to accounts processing.
  • Requiring checks and payment transfers above a certain amount to be authorized by two or more people.

So, bottom line: Nigerian scams are not only still with us, they’re also more convincing and threatening than ever — so beware!

Alert of the Week

The US Social Security Administration (SSA) is warning seniors not to be duped by online, snail-mail and magazine ads that use terms like “Medicare,” “Medicaid,” and even “Social Security” and their logos to make themselves more convincing.

In particular, watch out for offers to help you get a new Medicare or Social Security card for a fee (they’re free) or fake notifications of an increase in your Social Security payment if you provide your bank details (the SSA already has this info and certainly doesn’t request it when you get a raise).

Time to close today, but we’ll be back next week with another issue. See you then!