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SCARS|RSN™ Scammer Urban Legends: Chapter 8 – Who Is Responsible?

Who Is Responsible For Scamming?

We constantly hear from victims that say that someone (pick a person) is responsible for global scamming!

Unfortunately, yes, there are many who are responsible and some who are not.

Let’s Look At The Genesis Of Global Online Fraud

It all starts (basically) with the Advance Fee Fraud known as 419 – “419” refers to the section of the Nigerian Criminal Code dealing with fraud, the charges, and penalties for offenders.

An advance-fee scam is a form of fraud and one of the most common types of confidence tricks (“cons”). The scam typically involves promising the victim a significant share of a large sum of money, in return for a small up-front payment, which the fraudster requires in order to obtain the large sum. If a victim makes the payment, the fraudster either invents a series of further fees for the victim or simply disappears. According to the Federal Bureau of Investigation (FBI), “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.”

There are many variations of this type of scam, including the typical Nigerian 419 scam, the Spanish Prisoner scam, the black money scam, Fifo’s Fraud and the Detroit-Buffalo scam. The scam started with fax machines and traditional mail and is now all online.

While Nigeria is the #1 source for this and most often the nation referred to in these scams, they have spread around the globe – either by people trained in Nigeria during the oil boom or from Nigerian migrating to other countries and sharing that knowledge.

In 2006, 61% of internet criminals were traced to locations in the United States, while 16% were traced to the United Kingdom, and 6% to locations in Nigeria (according to the FBI) – but the devil is in the details. The FBI views Internet Crime as any act with criminal intent, such as online stalking, cyberbullying, low-grade hacks, and the like. However, Nigerians are the global plague when it comes to online scams, but it is true that it has spread.

Other nations known to have a high incidence of advance-fee fraud include Ivory Coast, Togo (really, all of Western Africa), South Africa, the Netherlands, and Spain.  One of the little-known facts of these scams is that Middle Easterners and Turks are also actively involved, and prior to 9/11 Al Qaeda made a significant amount of their money from scams (and they still fund terrorism and human trafficking to this day).

Starting Online

It began with the major online services of the late 1980s.

There were scams on “Bulletin Boards” from 1985. There were scams on Compuserve. There were scams on Prodigy, and PC-Link, and AppleLink (yes by Apple), and on MSN. But they really started to get going on Americal Online. However, let us not forget the Brittish Teletext services that were in widespread use in the UK in the early 1980s as well – where a small number of scams were being tested by fraudsters living in the UK.

By 1991 we started to see the first chat room on AOL talking about Romance Scams (this is where our own Chairman first started to notice them, and address the issue). Scams of various types were swarming through Americal Online in chat rooms, product offerings, messages, and emails. This is where we start to see an expansion and where significant income streams are arriving for individual scammers in Nigeria via Western Union.

Next The Web!

With the emergence of the World Wide Web (a layer sitting on top of the Internet that we still rely on today), we see a huge expansion of email scams as more of the world obtain email addresses. Fortunately, the U.S Government had tight regulation of domain names, so we did not see fake websites until the 2000s. However, email scamming was everywhere. The Nigerian Prince needed everything and had more money than Fort Knox!

Law Of Unforeseen Consequences

In the 1990’s we see a vast expansion in telemarketing moving to call (contact) centers around the world – from India to Latin America to Eastern Europe to (drum roll please!) AFRICA. As telecommunication spread and became dirt-cheap, companies around the world began outsourcing in a big way.

Now think about what outsourced telemarketing really is? It is putting together a physical building with the latest in communication hardware and software to enable rooms full of people to sell, support, and talk to people around the world. Business trained these people to be as close to perfect as they could, training them in the psychology of their buyers. Even teaching them how to overcome their accents and sound like their targets. In most of these countries, telemarketing was a good job, they were mid-level professionals, hiring college graduates. They were smart, efficient, and quick learners. These centers built up extensive training and professional development departments.

Then comes the mid-2000’s when the contact center/telemarketing industry starts to decline. Consumers have had it with weird callers day and night offering things they are not interested in. Consumers stop responding to cold-calls! But vast amounts of money have been invested in these centers, training their people, what will they do?

Many closed their doors and laid off their people. However, most of the centers were locally owned, so they looked for other opportunities. By 2010 about 2/3 of the former contact center business was gone. Those that remained had adapted to other kinds of service outsourcing. Some continued to provide telemarketing since there was still some need for it – especially tech support and customer service, but others looked at different opportunities.

Contact Centers Become Scam Centers

In places like Jamaica, telemarketers turned to Lotto Scamming. India turned to Tech Support and Tax Fraud scamming. Viet Nam, Thailand, Latin America, all have their call centers turned to scamming. We see that in country after country these failing call centers turn to other streams of income. Of course, the United States and Europe are not immune to this either – there are countless centers shut down for running fake programs and offers – it just happens faster and more efficiently. In t