Everything You Need to Know About Advance Fee Scams in 2023

The Federal Trade Commission received scam complaints from 2.4 million consumers in 2022. When economic hardships escalate, you can expect a general uptick in fraudulent activities, as seen in recent times. But it is not just about the growth in the number of incidents. Scams evolve in complexity and nature, too, taking a variety of forms.

An advance fee scam is one such type of deceptive scheme that has become a prevalent problem in many countries. In the UK, for instance, it has grown eightfold in under thirty months. Consumers are falling victim to advance fee fraud in the US, too. Building awareness about them is, therefore, critical for ensuring your safety in 2023.

What Is an Advance Fee Scam?

It typically involves a request for an advance payment for a service or product offered by a fraudulent organization or individual.

For example, scammers could impersonate a financial institution and ask you to pay an admin fee to process a pre-approved loan. Once you do, they will disappear with your money, leaving no traces behind.

You can encounter this type of fraud in various circumstances—swindlers can ask for an advance on the pretext of renting out an apartment, providing a job, or a too-good-to-be-true investment opportunity. They may even approach you announcing a sizeable winning in a lottery or sweepstakes.

In all these instances, scammers could be pretty convincing. Once they win your trust, they could ask for an advance fee as a processing charge, tax, or insurance payment. They may also present it as an early-booking or priority fee.

Who can fall victim to an advance fee scam? The simple answer is anyone. Swindlers can deploy countless schemes to target people belonging to different demographics—from teens to working professionals and retirees. So, taking protective steps to identify and mitigate their threats is necessary regardless of your age, gender, ethnicity, location, education, or income.

Preventing Advance Fee Fraud

You can easily avoid these fraudulent activities by adopting essential safety practices. Many of the steps discussed in this article will also help you minimize the risks of other prevalent scams.

Ensure You Are Liaising With a Genuine Organization

With the advanced technological tools available today, it is easy for anyone to hide behind a fake business. Typically, all it would take is designing a logo, creating a website, and setting up a few social media profiles. Some fraudsters could even assume the identity of well-known organizations by mimicking their websites and social media activities.

But often, there are glaring signs that could give away these malicious ploys. And you can peel off their cover-ups with a few verification measures.

Here is what you should do whenever you are dealing with an unknown entity:

  • Reverse search its contact details. For example, find its phone number on PhoneHistory and google its email address. Take note of any mismatches in the information you uncover and what it has provided you.
  • Contact the relevant organization using a general hotline and verify details.
  • Look for red flags on its website. These can include spelling mistakes, grammatical errors, logo changes, or a misspelled company name or URL.
  • Inspect its social media pages. Genuine organizations will not have more than one profile on a social media platform. If the one you are communicating with has a short history, fewer followers, and less engagement, chances are it is fake.

Avoid Giving Way to Emotions

Scammers can use several techniques to manipulate your emotions and lure you into their swindles. They may approach you when you are feeling vulnerable or attempt to entice you with hard-to-resist rewards, benefits, and deals.

For example, a fraudulent lender could offer an instant loan when you desperately need money. They could pre-approve it despite a low credit score and agree to process it with minimal documentation.

When someone approaches you with an out-of-the-ordinary offer, keep your emotions in check and fight the urge to jump straight in. Take a step back and assess the information. Determine accepted standard processes and procedures. Anything that vastly deviates from the ordinary should be treated with suspicion.

For instance:

  • Authentic lending institutions would want to minimize their risk. They will, therefore, take sufficient time to review a borrower’s information without offering instant loans.
  • Lottery boards typically withhold tax from the prize money and would not require you to pay it separately.
  • Investment opportunities will find it hard to beat the market average for returns. Any extraordinary return that is legitimate would have already attracted public and media attention.

When you consider how things work under normal circumstances, it becomes easier to identify unusual activities and protect yourself from deceptive plots.

Avoid Hasty Responses

Many scammers rely on various persuasive tactics to pressure victims into acting fast. They could, for instance, tell you that an offer is only available for a limited period, hoping you will rush into paying the advance fee to secure the deal.

In moments like these, it is essential to take your time, no matter how tempting the rewards may be. Research the offer on search engines and social media and check what information you can uncover.

Use your best judgment to assess the situation. Seek advice from a friend or family member if you are unable to make a call.

Be Wary of Untraceable Payment Methods

Some genuine situations might also require you to pay an advance fee. One of the easiest ways to distinguish them from scams is by reviewing the payment options.

A legitimate business generally prefers transparent and traceable methods. Fraudsters, on the other hand, favor untraceable ones. These can include wire transfers, cash, pre-paid debit cards, gift cards, and cryptocurrency.

So, if an organization insists you use any one of these for a fund transfer, you have likely encountered a scam.

Wrapping Up

Advance fee fraud has become a prevalent concern, both in the US and abroad. Therefore, adopting a proactive approach to ensuring your safety is critical for minimizing the threats.

Whenever an organization approaches you via email, phone, social media, or any other medium, carry out necessary checks to ensure you are dealing with a legitimate entity. Avoid giving in to emotions and making hasty decisions. Be mindful of payment methods, too, which can provide important clues to identify fraudulent activities.

Everything You Need to Know About Advance Fee Scams in 2023 was last updated August 15th, 2023 by Olivia Anderson