This article is incomplete (i.e it delivers significantly less than it promises) but it still has stuff in it that might be helpful to some. Will be complete asap.

One day in the early nineties, before anybody heard of the Internet, the postman arrived at my father’s business address with a letter from someone in Nigeria. The letter explained in great detail that just for helping to get some funds out of the country, my father would be given a large sum of money.

This is the first 401 Scam letter I remember seeing. I don’t know how common the letter variety used to be, after the Internet became commonplace these scams have been popping up all over the place.

I would hope that anybody who wasn’t born tomorrow be able to spot a 401 scam message when they see one, but the fact that they are still being sent out is proof enough that some people are still falling for these scams.

There are a few things these scammers have in common.

1) They have no conscience.

2) They are ruthless.

3) They are idiots (except for the few people who invent the techniques they are using).

4) And last but not least, they want your MONEY!

The classic 401 Scam (so called because that’s what the penal code that deals with these crimes in Nigeria is numbered) goes like this:

You receive an unsolicited message some day. The sender claims to have placed his trust on you. They will usually evoke religious sentiments to drive this point forward. Faith. Destiny etc. He/She will be someone of importance in his/her home country. A good example of a well timed email I once received claimed to be from Mrs. Yasser Arafat, whose husband had just died. More recently I recevied one from the wife of an exiled Liberian “leader”.

Once they hope to establish credibility in such a fashion, they will confide in you that they know the whereabouts of a huge sum of cash which seems to have been forgotten by everyone else in the volatile events that happened recently. This sum may have been collected legally or illegally. Since they are appealing to the greed inherent in most of us, they don’t try to make the transaction seem overly virtuous.
They will then proceed to offer you a generous portion of this sum, if you’re willing to be the trusted foreign contact they need to help them extract this money from their country. All they need initially is your name, address, phone number etc.

If you reply to this email sincerely, you will get more emails back with more information, until one day they start asking for money. The money’s will be used for the purpose of facilitating access to the huge sum. Examples to this might be, the bribes to be paid to guards and/or poiticians/soldiers. Money needed to pay accumulated safe storage fees etc.

With the dream of much a huge ROI (return on investment) the unsuspecting victim will send this money. But the demands for more money will never cease. The more money the victim has lost this way, the likelier he is to make him or herself believe in the legitimacy of the deal. After all nobody wants to accept it when they are being stupid.

The scammers will do everything to make things look legit as well. From time to time you will receive messages and calls from other people who corroborate the story and ask for yet another transfer of money before they can finally get their hands on the funds.

I’ve heard that some even arranged for face-to-face meetings in countries such as England. The victim wants to meet the people he’s “working with” so he arrived in London with cash. This is the stupidest thing a scam victim can do since moneys can be replaced but one’s life cannot. Like I said, these people have no conscience. I am beginning to think it’s a cultural thing.
The Internet age of scam:

With the arrival of the Internet, a new kind of 401 scam emerged. This can be called the ‘wire transfer’ or ‘western union’ variety.

The scheme is simple. You have something to sell or you’re looking to buy/rent something. Let’s start with the sale example. You’re selling your car - as I am right now. You will post an ad on an online service. Pretty soon after you will get an email from a person who himself lives abroad or is representing somebody who lives abroad. This person wants to buy your car. He is OK with the price. He wants to pay with wire transfer or cashier’s check. He will send you more money than your asking price and wants to know whether you’d be able to send the remainder back to him. He will also arrange for the pick-up of the car himself via an international shipping company.
Let’s look at the psychological construction of the deal.

1) He’s abroad. He doesn’t know the market and wants to pay the asking price. Nobody wants to pay the asking price so you think you’ve found a good buyer.

2) He’s placing your trust in you by sending you the money in advance, and is even going one step further by sending you more money than your asking price. Since he trusts you this much, you’re inclined to trust him back.
3) Greed. You want to sell the car. At the asking price. Fast. With as little work required as possible. You won’t have to deal with the delivery either. I believe this to be added to latter versions of the scam as it is likely to be the first question that pops up on the mind of the seller. “If you’re abroad, how am I supposed to send the car to you? Wouldn’t that be too much work, too costly?” But no. They’re taking care of it all.

So how does it work?

They send you the money order as agreed upon. You deposit it to your bank account. It clears without a problem. Since there was no problem with the bank, you have no reason not to distrust this person. So you do what any honest person would do and send him the excess amount he included in the money order.

So far so good right? Well. Yeah. But things are about to change.

First of all. You will notice that the person has not sent anbody to pick up the car yet. But you don’t care because it’s already paid for. A week or two later you will get a call from your bank. They will let you know that they either took back the amount of money you had deposited if you had enough funds to cover it, or that you owe them that amount. You are further informed that the money order was found to be counterfeit.

You can protest all you want. Cry that if it were fake the bank should not have accepted it in the first place. How are you to know a fake check from a good one if even the bank teller is unable to do so. However, soon you will realize that it’s better to just shut up and pay their money rather than being prosecuted as the original counterfeitter yourself.

So this is what 401 scam is and how it works, but how do you spot a scam email when you get one?