Editor note: Moved from 419 fraud.
Another name for advance fee fraud. The name 419 fraud originates from Nigerian law where section 419 makes advance fee fraud a punishable offense.
Advance fee fraud works by the perpetrator sending out unsolicited letters or e-mail to unsuspecting recipients. The contents of the letter or e-mail state that there's a large sum of money that they are trying to collect, and there are a few financial barriers in the way that need to be cleared in order to do so. The recipient is encouraged to send in money to assist in paying all the fees associated with trying to collect the sum of cash. In return for their assistance, the letter claims that they will be able to recieve a percentage of the money that is to be collected.
The scam is that people who do take the bait are often forced to send large sums of cash to the scammers until they either become broke or decide to quit and take their loss. The only profit that is made is that the scammers keep the income as their own.
Advance fee fraud is hard to trace, particularly in Nigeria. The scammers often use cell phones and their precise location is hard to pinpoint. Snail mail that is sent may arrive on fake or forged company letterhead. The Nigerian government has set up the Nigerian Fraud Watch to warn unsuspecting people about the scam and the bad PR that the country has recieved as a result. Resources are provided for those who may have lost money and for people who received letters but are not sure what to make of them.