Bank Windhoek has warned the public and its customers to be vigilant against advance fee fraud. Advance fee fraud gets its name from the fact that a customer is asked to pay a fee upfront or in advance of receiving something of greater value, like a loan.
Research shows that this type of scam has been around for quite some time. Over 100 years ago the “Spanish prisoner letter” scam was used, where scammers contacted businessmen via letter alleging that someone connected to a wealthy family in Spain was in prison and in exchange for a small fee to help smuggle them out, the wealth would be shared. The fee was paid, there was no prisoner and no wealth shared. During the 1980s, variations of these letters starting coming from Nigeria. They began as letters mailed to potential victims and evolved into e-mail scams, as it drastically cut the cost of sending.
Advance fee fraud is sometimes referred to as “419 Fraud”, 419 being the article of the Nigerian criminal code dealing with fraud.
“How it works these days is that unknowing customers are engaged by seemingly reputable persons or financial institutions to take out a loan at favourable rates. The condition however attached is that certain charges or fees must first be paid, before the whole loan amount can be disbursed. Note, that any payment made will be followed by a further request for another advance charge or fee payment”, says Johnny Truter, manager of forensic services at Bank Windhoek.
“In all cases the fraudsters also request customers to provide them with personal documentation such as copies of identification documents, passports and birth certificates as part of the application.
“Further personal particulars including contact details, physical addresses, e-mail addresses, employment information, bank account numbers, etc. is required in the application forms that must be completed in full.
“This is referred to as identity theft. Besides the fact that the defrauded person will not receive any loan, these scammers will then use the personal documents and information obtained to open accounts or apply for credit in your name.
“The bad credit will be held against your name and you will eventually unknowingly be listed by credit rating agencies.
“Since the evolution of the “419 Fraud” letters from the 80’s, scammers have evolved and updated their tactics. Today, the types of advance fee fraud schemes are limited only by the imagination of the fraudsters who create them.
“This includes advance payments for loans, deposits or reservation fees for goods that are advertised in newspaper small advertising or the internet, accommodation and travelling or delivery costs.
“We implore our customers and the public to be wary of dealing with unsolicited emails claiming to be from a bank or financial institution that offers loans at good rates.
“That is not how reputable banks and financial institutions conduct their business. Keep your personal records safe and protect yourself from potential fraud,” Truter advised.