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Banks situated between a rock and the wall
Fraud victims are very often lured in to using their bank account for a fraudulent sceme introduced by professional fraudsters.
How are banks effected by Nigerian 419 Advance Fee Fraud
-Their customers are victims of fraud.
-The name and brand of the bank is used to convince victims that the bank is involved in the deal.
Advance Fee Scammers are using (copies of) letterhead, stamps and other documents that are used to communicate with clients, including complete copies of the banks web site. In very elaborate 419 frauds whole copies of bank offices were found to receive victims, some fraudster rent temporary office space in buildings with bank logo’s on them because a real bank is also residing in the same building.
-Fraudsters are registering companies with a chamber of commerce, using (parts of) the name of real banks. With those legalized documents they open bank accounts with other banks in countries where the name of the original bank is not recognized as an existing bank.
The fraudster do this to give the impression that the victim transfers money to a real banks via its corespondent bank in another country, a quite common cross border transaction
-Possible financial exposure, because of fraudulent payment instruments (ex. checks, guarantees) introduced by the fraudsters to the victim who lodges it with his bank and is credited for it. After the victim is credited he invest the money in the fraudulent sceme and its lost.
-419 fraudsters will continuously attempt to make their victims believe that the bank is involved with their deal
-And last but not least the considerable time wasted by bank employees, communicating with victims and fraudsters about large sums of money that never materialize.
What can banks not do to help?
-Warning clients that they are being defrauded can proof to be a difficult exercise because some victims/customers may choose not to listen or believe the banks advise, there is an obvious chance that the client listens to the warning of the bank and turns around to tell the fraudsters. When this happens the fraudsters could (in some jurisdictions) successfully sue the bank for defamation or just threaten to do so. Possible publications can damage the reputation of the bank.
What can banks do to help?
-Banks can methodically recognize when their clients are perpetrating or are victimized by advance fee fraud.
-The perpetrators are not welcome clients and the victims can be advised in order to protect them and the bank against financial loss.
-Warning customers is a very delicate matter and therefore procedures should be developed and standardized to protect both the customer and the bank.
-419 Advance Fee Fraud is a fast growing industry and there are new formats and markets developed continuously, we can warn for one type today and tomorrow there is a new one that targeted victims again not recognize as such.
Therefore banks (and governments) should fund effective research of those developments and use the results to protect their customers, their own innocence and support prevention programs for the general public.
What can banks expect?
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Conducting due diligence enquiries in Nigeria, the daily rate is $700 USD per day plus additional expenditure if travel in country is required. Otherwise $2,800 USD for a week's work.
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Does 419 Advance Fee Fraud organized crime own real banks?
Yes they have already, we believe, bought themselves controlling interest in several banks (so they "own" the banks) and of course not only Nigerian banks.
Recent mergers with Nigerian banks.
When we write this, international banks have merged with (bought) Nigerian banks. Disaster, opportunity, or both?
Opinion from our reporter in Benin, Nigeria, August 25th 2006:
Seems like buying into a super 419 while estimating/gambling that the losses will be worth the future gains in a huge developing market. That is, when I assume that those international banks estimated beforehand what different types of trouble they bought. This should not be compared with the relatively simple exercises in South America, Eastern Europe or Asia, also not with mergers in other African countries.
This is Nigeria,
-where 12 year olds can tell you about fraud
-where the line in front of the bank are people who come to collect transfers of money made with fraud.
-where -corrupt- bank directors live like their most valued customers -the 419 king pins-, both move around in convoys …with Police escorts, siren blaring, or is that soon to be history?
-Nigeria was the only country I know where known criminals are awarded banking licenses?
-forget for a moment about the financial exposure, think culture shock of the highest order ,can you handle not knowing who to trust today? I don’t think so.
Do 419 advance fee scam organizations own Money Transfer agencies?
Yes, we know of western Union agents owned or controlled by 419 scammers.
..............under construction
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ce that a growing number of Nigerian fraudsters are operating from within the UK.