A concerned FAnews Online reader forwarded us a suspicious email. He wanted to know if anyone would bother to act on the contents of the mail given the illegal nature of the suggested transaction.
The email is a variation on the Nigerian Advance Fee Scam (also known as the 419 letter scam). It aims to convince the reader that he has been singled out to take part in a very lucrative (though questionable) financial transaction.
Fabricated official-looking documents are usually supplied to prove the transactions validity. Before the transaction can be completed, a problem surfaces. The reader is then asked to deposit a sum of money to keep the transaction alive. And that money is never seen again.
Our reader's email probably originated in Hong Kong before being distributed to millions of email users around the globe. An extract reads:
"There is no risk involved at all in the matter as we are going to adopt a legalized method and the attorney will prepare all the necessary documents. Please endeavour to observe utmost discretion in all matters concerning this issue. Once the funds have been transferred to your nominated bank account we shall share in the ratio of 70% for me, 30% for you."
This is an opportunity to consider some of the warning signs that identify an 'opportunity' as a financial scam.
Never in a thousand years
The first telltale sign is the unrealistic promise. Upon reading this promise you will immediately think it is too good to be true. Most often, you will be offered a ridiculous return on investment. If a top investment manager returns 40% per annum, you should treat claims of 20% returns per month as inherently suspect.
Returning to our email, Mr Cheung Pui introduces himself as the operational director of a large Hong Kong bank. His unbelievable promise is that you will receive USD 7.35 million by simply facilitating a financial transaction.
Breaking the law is bad business
Another dead giveaway is a general feeling of unease. Many of these financial 'opportunities' invite you to engage in illegal activities.
Pui goes on to explain the great 'opportunity' in more detail. Everything is 100% legitimate, he says. You will simply pretend to be the heir to this fortune (feeling uneasy yet?)) and the USD 24.5 million will be transferred to your bank account. At this stage, you will pay Pui his 70% and live happily ever after off your share.
If this request fails to trigger an ethical objection you probably deserve to get taken for a few thousand dollars. If you feel uncomfortable about any aspect of a financial offer, there is usually a very good reason.
Information games
Suspect information can also help to reveal financial scams. The Internet has become a breeding ground for fraudsters. In a matter of minutes, a criminal can create a false identity, purchase lists with email addresses and deliver a proposal to millions of potential victims.
Another paragraph in our email reads:
"Should you be interested please send me your full names and current residential address and I will prefer you to reach me on the email address below (chpuixfidentialx@yahoo.com.hk) and finally after that I shall provide you with more details of this operation."
All you know about the sender is a name (probably false) and an email address. If you propose to act on the strength of this information you will be making a big mistake.
Never reveal your personal information to people fronting financial 'opportunities' of this nature. Someone who requires your personal information before supplying details about an investment opportunity is up to no good.
Reputable companies will usually provide contact details. Check for physical addresses. Establish if the company has a land-line or is doing business from a mobile phone. Check that the company is registered with the Financial Services Board (FSB). If you have any doubts, rather walk away from the offer.
There are enough credible suppliers of financial solutions for you NOT to get involved in the suspect ones.