I gave a speech last week about Nigerian Email scams. I read a really interesting paper about them, and I wanted to share it with the group. If I could do it again, I would have spoken about China instead. It is way easier to talk about something that you are knowledgeable and passionate about. Below is the text:
Why Do Nigerian Email Scammers Say They Are From Nigeria?
Inspiration for this presentation came in the form of an email. It was from Barrister Godwin Oti. He introduced himself as the former personal attorney to Mr. Lewis, a wealthy foreigner doing work for an oil company in Nigeria. Mr. Lewis and his entire immediate family died in a car crash in 2003. Since then, Godwin has been trying desperately to locate any living relatives.
Here’s where the email gets interesting, Mr. Lewis left behind 10 million dollars in a bank account, and if Godwin doesn’t find a next of kin within the next 21 days, the entire account will be confiscated. With time running out, Godwin has come to me with an amazing proposition. He wants to present me as the next of kin. For my help, he has offered to split the 20 million dollars.
As I’m sure you already know, this email is a scam. People’s inboxes are spammed with outrageous stories like this all the time. So I thought it would be interesting to learn what’s going on. I decided to respond to Godwin’s email. Unfortunately the address had already been removed. Had I been able to successfully get in contact with this guy, I would have probably received a reply from the fraudster asking for me to wire money for bribes or fees in order for the deal to happen.I would continue to be strung on about the deal being close to going through all the while being asked to send money. This would continue until I wised up to the fact that this was a scam.
This type of scam is called an advance fee fraud system, where a large amount of money is said to be available if the person puts down a little money now. These scams have been around since at least the 1800s, but really took off with the advent of email. In 2009, victims lost at least $9.3 billion from these types of scams. For comparison, that’s more money than the entire NFL made in 2011. And the actual value is certainly much higher since many instances are not reported.
Most of you probably knew that the email I received was a scam from the second you heard it was from Nigeria. The country has become a buzzword for these types of scams. They’re commonly referred to as 419 scams—419 being the article in Nigerian criminal code dealing with fraud. This graph shows the number of scam emails documented in 2009. According to the study 51 percent of all scam emails mention Nigeria.
The weird thing is, most of these scams don’t actually come from Nigeria. The most popular country of origin for this type of email scam is actually the US. This means that many scammers are actually lying to say that they are from Nigeria, a country synonymous with scams.
In order to understand why a scammer would lie to say they are from Nigeria, one must think about the economics of the scamming business. There are really three potential outcomes once a scammer sends an email. The first is a negative response. The person who receives the email recognizes it as a scam and doesn’t respond. In this case, the scammer doesn’t make any money but there is also no real cost to sending that email.
The next outcome is a positive response. The person reads the email and buys into it. That person responds to the email and after some correspondence begins sending money. This is the goal.
The third case is a false positive. The original email is believable enough to convince the person to reply, initiating the correspondence. But over time, the person becomes skeptical and refuses to send money. This is the most costly outcome for the scammer. It takes up a lot of their time and leads to no pay out. Given the low density of people that are gullible enough to wire money to a stranger, a realistic email likely leads to a high ratio of false positives to true positives, potentially destroying the profitability of the scam.
Some researchers argue that scammers purposely send outrageous emails because their goal isn’t necessarily to identify viable targets as it is to eliminate non-viable targets. Sending impossible to believe emails weeds out all but the most gullible individuals, reducing the number of costly false positives, and allowing the scammers to focus on the highest probability targets. This theory explains a lot about these emails. Outrageous stories about princes and long lost relatives, horrible English, and, most noticeable, the use of Nigeria are all used to make the most unbelievable email possible. Nigeria functions as a signaling device allowing for the most gullible recipients to self identify while weeding out the more skeptical recipients that are going to be dead ends.
This strategy of using self-selection to increase profitability in an environment with a low density of viable customers is evident in other industries outside of scamming. Look at telemarketers. They waste no time asking if you are interested in buying that appliance causing most people to hang up quickly. They could potentially convert more callers into sales if they were to ease into the sale more, but this would greatly increase the percentage of false positives, the people who take up the time of the telemarketer but do not ultimately buy anything. By being very upfront about their intentions, telemarketers quickly eliminate all but the most receptive listeners.
Once you begin to think about these emails through the lens of the fraudster, they begin to make a lot of sense. One especially blatant email designed to identify the most gullible targets was said to be from former UN Secretary Ban Ki Moon. It was especially audacious because it was directed at people who had previously been scammed by these types of emails saying “the UN has agreed to compensate them with $800,000.”
The email repels everyone except the people so gullible that they have already been duped by this type of email scam before and are still willing to respond to email requests from strangers. And just to make sure that anyone with a single skeptical bone is his or her body gets the clue not to respond, people who still believe this email is legitimate are encouraged to contact the representative in charge of handling the payments, located in, of all countries, Nigeria.
So the next time you see a ridiculous-sounding Nigerian email, realize that there may actually be a very calculated strategy behind it.