6 Steps to Avoid Becoming the Victim of 'Advance-Fee' Fraud

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A prospective client contacts you via email or your website, seeking your services on a big, new job. He mentions that the job also involves a third party, so he wishes to pay you for the whole job, if you would then pay the other party involved.

Sounds a bit dubious, right? But this client has a good explanation: He’s seen your design portfolio online and wants to contract for your services to design his new business website if only you will pay his photographer so everything is on one consolidated invoice.

Or: He wishes to hire you to remove a tree from a property he just inherited, yet he also needs you to pay the gardener since he’s located overseas where it is difficult to make multiple international payments. He comes off as polished, presents a professional looking contract and has a real-deal bank account with a U.S. financial institution you believe you can trust. His offer is nothing like those scammy emails we all know are bogus.

What’s my advice here? Proceed at your own peril.

As vice president of risk at WePay, which processes payments for major online platforms, I work to help protect people and companies from costly fraud. And in instances like the two I’ve just mentioned, real people and businesses stand to lose real money. Experience tells me that the person seeking “help” is almost certainly a fraudster using a stolen credit card number.

And that advance fee he wants you to pay to a third-party subcontractor? It’s money that will be long gone before you realize months later that you’ve been taken. You’ll be out all the money you received and hit with penalties from your bank.

Welcome to the modern, more sophisticated version of the decades old 419 scam — a type of advance-fee fraud named for the criminal code where the scam first emerged. Today, the stakes have never been higher — because new commerce platforms enable fraudsters to reach you in more ways, the dollar amounts involved keep rising and the liabilities have increasingly shifted to hit those who do business online hard.

To avoid being those fraudsters’ next victim, here are my suggested best practices for platforms and merchants:

1. Rely on history.

No matter how appealing the job and its purported payoff, keep in mind that sending any form of payments to a third party you don’t know is a highly unusual practice. So, don’t give the benefit of the doubt when someone explains that this is necessary for one reason or another, oftentimes because he or she is located outside the country.

My experience is that, more often than not, that seemingly trustworthy third party is the fraudster or an accomplice. So, what to do? Never agree to send payments to a third party unless that party is related to a client whom you’ve done extensive business with in the past.

2. Talk to those involved.



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