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The Resource Center Online Security Issues & Protection | post

FTC joining with the Nigerian Consumer Protection and Criminal Enforcement Authorities to try to stamp out Nigerian Internet scams

by Steve Schwartz on

They are not based on id theft, but so-called Nigerian Internet scams, known as "419 Schemes" after the section of the Nigerian criminal code they violate, have stolen millions of dollars from gullible people world-wide. Now the U.S. Federal Trade Commission is officially joining with two Nigerian agencies, the Consumer Protection Council (CPC) and the Economic and Financial Crimes Commission (EFCC), in a joint effort to stamp out what is officially called "cross-border fraud."

I would be surprised if you have not received several emails hoping to lure you into what are known as "advance payment" fraud schemes. Usually they purport to be coming from some government or bank official, or perhaps the widow of some famous man, or possibly an American soldier in Afghanistan who is sitting on a pile of money they want to steal; but they need your help in transferring the funds out of their country. In return you will get a percentage of the purloined assets.

You likely read these emails with a smile thinking how many crooked bank officials there are in the Third World, but then you delete the email without giving it a second thought. But you might be stunned to learn that the Secret Service, which investigates financial crimes, estimates that "Americans lose at least $100 million a year to these scam artists."

The FBI describes the scam which is categorized as a crime of persuasion.

Nigerian letter frauds combine the threat of impersonation fraud with a variation of an advance fee scheme in which a letter mailed from Nigeria offers the recipient the "opportunity" to share in a percentage of millions of dollars that the author—a self-proclaimed government official—is trying to transfer illegally out of Nigeria. The recipient is encouraged to send information to the author, such as blank letterhead stationery, bank name and account numbers, and other identifying information using a fax number provided in the letter. Some of these letters have also been received via e-mail through the Internet. The scheme relies on convincing a willing victim, who has demonstrated a "propensity for larceny" by responding to the invitation, to send money to the author of the letter in Nigeria in several installments of increasing amounts for a variety of reasons.

The FTC and the two Nigerian agencies, which have worked together before on various enforcement issues, have now signed a Memorandum of Understanding (MOU) which provides an official framework for cooperation between the three entities.

The MOU called for establishing a Joint Implementation Committee to identify concrete areas of collaboration, establish joint training programs and workshops, and provide assistance regarding specific cases and investigations. Notably, it is the first FTC MOU of this kind to include a foreign criminal enforcement authority. The MOU does not change existing laws in either country

“Cross-border scammers use fraudulent e-mails and other scams to bilk consumers all over the world, while undermining confidence in legitimate businesses," said FTC Chairwoman Edith Ramirez. "This MOU will help our agencies address this scourge, and better protect consumers in both the U.S and Nigeria."

EFCC chairman Ibrahim Lamorde, said of the MOU "it will build on our existing collaboration with FTC and with U. S. criminal enforcement authorities."