The 419 scam is named after the relevant section of the Nigerian Criminal Code and the premise is always the same. Somebody offers to pay money into your account and give you a cut when you send it back.
In truth the whole thing is money laundering but this latest twist – using Paypal – is significant because, on the surface, it looks like there's no catch.
An INQ reader, who nearly became a victim, explained how it works. Instead of receiving the offer via email (as is normally the case), this person was approached over a Skype chat session.
The perpetuator (presumably a male) wanted to transfer funds out a Paypal account and convert them back into US dollars. All the victim needed to do was check his Paypal account and when the money arrived and send a significantly lower amount back via Western Union.
Our victim pinpointed Paypal's payment reversal policy as the loophole which enabled the scam to work. As the payment would be classified as 'services' rather than goods, there would be no proof that the the victim – who becomes the 'vendor' – provided any goods. So the 'buyer' – in this case the scammer – gets the money back.
In the meantime, the vendor has sent the dollars via Western Union and then finds himself stuck with no means of recourse.
One of the e-commerce experts the INQ talked to was Dave Birch from Consult Hyperion who complained the real problem was with Western Union because that company made it too easy to send and receive money anonymously.
However, Jennifer Perry from E-victims (which specialises in supporting victims of cybercrime) blamed Paypal's dispute resolution procedure system calling it a "very crude automated system."
"Paypal's guarantee doesn't really live up to expectations," Perry explained. "The public feel it [Paypal] is a gold-plated service like M&S or a credit card, but it isn't."
Perry hadn't heard of this particular 419 scam claiming a victim but she had encountered several people who had been fooled by spoof emails into thinking that money had been paid into their Paypal account when it hadn't.
"Paypal relies heavily on the courier companies to establish whether or not goods have been received." Perry suggested. "You can sign for an empty box and it is extremely difficult to prove you haven't actually received the goods."
Interestingly, security expert, Rick Ferguson from Trend Micro, pointed out that not all 419 scams are actually false.
"In some cases they really do send the money but you've actually committed a crime by effectively 'washing' the money." µ