If a victim makes the payment, the fraudster either invents a series of further fees for the victim to pay or simply disappears.

The Federal Bureau of Investigation (FBI) states, "An advance fee scheme occurs when the victim pays money to someone in anticipation of receiving something of greater value - such as a loan, contract, investment, or gift - and then receives little or nothing in return".

This type of scam has many variations, including the Nigerian Prince Scam, also known as a 419 Scam. The number "419" refers to the section of the Nigerian Criminal Code dealing with fraud and the charges and penalties for such offenders. The scam has been used with fax and traditional mail and is now prevalent in online communications such as emails. Other variations include the Spanish Prisoner Scam and the black money scam.

Although Nigeria is most often referred to in these scams, they mainly originate in other nations. Other nations known to have a high incidence of advance-fee fraud include Ivory Coast, Togo, South Africa, Netherlands, Spain, and Jamaica.

History

The modern scam is similar to the Spanish Prisoner scam that dates back to the late 18th century. In that con, businessmen were contacted by an individual allegedly trying to smuggle someone who is connected to a wealthy family out of a prison in Spain. In exchange for assistance, the scammer promised to share money with the victim in exchange for a small amount of money to bribe prison guards.

One variant of the scam may date back to the 18th or 19th century, as a very similar letter, entitled "The Letter from Jerusalem". This is illustrated in the memoirs of Eugene Francois Vidocq, a former French criminal and private investigator. Another variant of the scam, dating back to CA.1830, appears very similar to emails today:

"Sir, you will doubtlessly be astonished to be receiving a letter from a person unkown to you, who is about to ask a favour from you ..." 

and goes on to talk of a casket containing 16,000 francs in gold and the diamonds of a late marchioness.

The modern-day transactional scam can be traced back to Germany in 1922 and became popular during the 1980s. There are many variants of the template letter. One of these, sent via postal mail, was addressed to a woman's husband to inquire about his health. It then asked what to do with profits from a $24.6 million investment and ended with a telephone number.

Motives

Many scammers tend to come from poorer and more educated backgrounds, where internet access and better education, along with an inability to afford necessities, drive people into committing online fraud. They were also influenced by social media celebrities and artists who promote scamming as a "cool" trend to quickly gain access to luxury items like sports cars and fashion.

In the case of Nigeria, the rise in scamming cases was due to a boom in cybercafes, a series of economic crashes from the 1980s, and the resulting joblessness among young people in Nigeria.

Implementation

The scam usually begins with the perpetrator contacting the victim via email, instant messaging, or social media using a fake email address or a fake social media account. The fraudster then makes an offer that would allegedly result in a large payoff for the victim. An email subject line may say something like "From the desk of barrister [Name]", "Your assistance is needed", "Important", "Dear Sir or Madam" and so on. The details vary, but the usual story is that a person, often a government or bank employee, knows of a large amount of unclaimed money or gold that they cannot access directly, usually because they have no right to it.

Such people, who may be real people being impersonated by the scammer or fictitious characters played by the con artist, could include, for example, the wife or son of a deposed African leader who has amassed a stolen fortune, a bank employee who knows of a terminally ill wealthy person with no relatives or a wealthy foreigner who deposited money in the bank just before dying in a traffic accident or a plane crash (leaving no will or known next of kin), a US soldier who has stumbled upon a hidden cache of gold in Iraq, a business being audited by the government, a disgruntled worker or corrupt government official who has embezzled funds, a refugee, and similar characters.

The money could be in the form of gold bullion, gold dust, money in a bank account, blood diamonds, a series of cheques or bank drafts, and so on. The sums involved are usually in the millions of dollars, and the investor is promised a large share, typically ten to fifty percent, in return for assisting the fraudster to retrieve or expatriate the money. Although the vast majority of recipients do not respond to these emails, a small percentage do, enough to make the scam worldwide as millions of messages can be sent daily.

To help persuade the victim to agree to the deal, the scammer often sends one or more false documents that bear official government stamps, and seals. 419 scammers also often utilize fake websites and addresses to present themselves as more legitimate. Multiple "people" may write or be involved in schemes as they continue, but they are often fictitious; in many cases, one person controls the fictitious personae used in scams.

Once the victim's confidence has been gained, the scammer then introduces a delay or monetary hurdle that prevents the deal from occurring as planned, such as "To transmit money, we need to bribe a bank official. Could you please help us with a loan?" or "For you to be a party to the transaction, you must have holdings at a Nigerian bank of $100,000 or more" or similar. This is the money being stolen from the victim; the victim willingly transfers the money, usually through some irreversible channel such as a wire transfer, and the scammer receives and pockets it.

Often but not always, delays and additional costs are added by the fraudster, always keeping the promise of an imminent large transfer alive, convincing the victim that the money is currently paying would be covered several times over by the payoff. The implication that these payments will be used for white-collar crime, such as bribery, and even that the money they are being promised is being stolen from a government or royal/wealthy family, often prevents the victim from telling others about the "transaction", as it would involve admitting that they intended to be complicit in an international crime.

Sometimes psychological pressure is added by claiming that the scammers' side, to pay certain fees, had to sell belongings and mortgage a house or by comparing the salary scale and living conditions in their country to those in the West. Much of the time, however, the needed psychological pressure is self-applied: once the victims have provided money toward the payoff, they feel they have a vested interest in seeing the "deal" through. Some victims even believe they can cheat the other party, and walk away with all the money instead of just the percentage they were promised.

The essential fact in all advance-fee fraud operations is the promised money transfer to the victim never happens because the money doesn't exist. The perpetrators rely on the fact that, by the time the victim realizes this (often only after being confronted by a third party who has noticed the transactions or conversation and recognized the scam), the victim may have sent thousands of dollars of their own money. Sometimes, thousands more that have been borrowed or stolen from the scammer via an untraceable and/or irreversible means such as wire transfer. The scammer disappears, and the victim is left on the hook for the money sent to the scammer.