International Trade Scams
How to avoid falling victim to international trade scams or other fraudulent online activities.

By Regina D. Heise

U.S. companies should be aware of international business scams and illegitimate trade deals. Many of these scams originate in Western Africa. One of the more common scams in international business is based in Nigeria and operates throughout the world, but scam artists have branched out to other counties.
 
While there are many legitimate Western African companies doing business in the United States and with American exporters, there is also an organized crime ring with members operating in some African countries and around the globe, that tries to take advantage of U.S. companies and individuals.

Advance Fee Fraud
Under one of the most widespread scams, individuals claiming to be officials of the Nigerian government or banking institutions will send a fax, mail or e-mail claiming that a reputable foreign company or individual is needed for the deposit of an overpayment on a procurement contract, according to the U.S. Secret Service Financial Crimes Division.

The con will claim that the Nigerian government overpaid anywhere from $10 to $60 million U.S. dollars on these contracts and that the recipient can share in the windfall by simply helping facilitate the transfer of funds. The correspondence will usually ask the recipient to pay an upfront fee in order to transfer assets from a Nigerian bank account to another account. These scams are called Advance Fee Fraud, or internationally as 4-1-9 fraud after the section of the Nigerian penal code which addresses fraud schemes.

Advance Fee Fraud schemes frequently use the following tactics:

• You or your company receives a letter, fax or e-mail from an alleged "official" representing a foreign government or agency or strong ties to government officials are claimed
  
• An offer is made to transfer millions of dollars in "over invoiced contract" funds into your personal bank account (also known as a fund transfer scam)
  
• There is a sense of urgency
  
• You receive numerous forged documents with official looking stamps, seals and logos
  
• Most of the correspondence is handled by fax, e-mail, or through the mail
  
• You are encouraged to travel overseas to complete the transaction
  
• The confidential nature of the transaction is emphasized
  
• You are requested to provide blank company letterhead forms, banking account information, telephone/fax numbers, etc.
  
• A Nigerian residing in the U.S., London or other foreign country may claim to be a clearinghouse bank for the Central Bank of Nigeria
  
• Eventually you must provide upfront or advance fees for various taxes, attorney fees, transaction fees or bribes, with each fee purported to be the last required
  
• And finally, violence and threats of physical harm may be employed to further pressure you

If you or your company has never done business in Africa before, or do not know how the correspondents could have received your personal information, you should be suspicious. Most persons doing business in Africa are familiar with their industry and can trace new professional contacts to a specific source.

Other Scams
Scams also have taken the form of bogus sales contracts (C.O.D. of goods or services). An African firm or government official requesting a rather large export sale will contact the targeted individual or company. The sale will often ask for samples (e.g. cellular phones and equipment) to be sent in advance of the sales negotiation.

Other schemes may involve a purchase of real estate, conversion of real currency, a religious-based or other charity contribution, an inheritance, recipient of an award, an ex-dictator/relative of ex-dictator trying to get money out of the country before going to jail, people purporting to want to invest in your company or the sale of crude oil at below market prices. All of these act as bait. The scammers then try to convince the victim that they will get a payoff. After the victim is "hooked," the scammers demand upfront  "fees."

First, it is important that you do not reply at all to scam letters. Any contact with the perpetrators puts you at risk of being scammed. Do not reply to their letters, e-mails, or call them by telephone.  For more information, visit the U.S. Secret Service Financial Crimes Division at www.secretservice.gov and click Financial Crimes.

Regina D. Heise is the Director of the U.S. Commercial Service-Kansas City. For information on export programs and services, please visit www.buyusa.gov/kansascity.