Securities Litigation Attorneys Representing Clients Nationwide
If you have been a victim of advance fee fraud, you likely did not know that was the case until after the contract has been signed and you have paid a sum of money. According to the FBI, advance fee fraud happens when a victim pays money to the perpetrator in anticipation of receiving something of greater value – be it a good or service or a larger sum of money – only to receive little or nothing in return.
If the above sounds familiar to you or you have been unfairly accused of it, your best course of action is to seek legal help immediately. Our attorneys at Weltz Law have years of experience in securities litigation and can help you navigate legal procedures with ease.
Common Types of Advance Fee Fraud
You may have heard of the term “419 Fraud”. Under Article 419 of the Nigerian law, money cannot be transferred out of the country illegally. However, cases where individuals based in Nigeria contact American individuals or companies to help them with transferring money for a share of the sum are rampant. This is just one example of advance fee fraud. The most common kinds are:
- A promise to provide payment in the form of cash or products and services after an advance fee is paid.
- A request to assist in transferring money out of a country in political turmoil.
- An offer of participation in a special financing deal or scheme after an advance fee is paid.
This fee is often referred to as an “administrative fee”, “handling fee” or “membership fee”. After victims pay the fee or sign a contract promising to do so, they are then told they do not qualify for the special deal, or never hear back from the perpetrator again.
Elements of Advance Fee Fraud
While there are many different cases of advance fee fraud, they all have a few things in common:
- The initial communication was unsolicited by the victim.
- The request for payment is time-sensitive and has to be kept confidential.
- The victim is asked to pay a sum of money before receiving the promised benefit, which turns out to be nonexistent.
How do Advance Fee Scams Work?
The scam starts with the perpetrator getting in contact with the victim, explaining the situation and gaining their trust. Documents are provided to “prove” the scam is real and is often communicated by courier mail or fax as they do not leave an easily trackable legal trail. After a period of time, the perpetrator informs the victim that a difficulty has been encountered and in order for the deal to go forward, they will need to pay an advance fee before they can receive the promised benefit. Some scams stop here, but in more elaborate cases, it can go on for months or even years.
After the perpetrator has received an initial payment, they may come up with more “problems” why the deal cannot go forward, providing additional documentation as proof. The process drags on with the victim pouring in yet more money in an attempt to recoup their losses.