Advance-fee scams: pay now, get nothing later
An advance-fee scam promises a large future payout — a lottery win, inheritance from a stranger, business partnership, escrow release — but requires you to pay 'fees,' 'taxes,' or 'transfer costs' upfront. Each fee is followed by another. The promised payout never arrives. The famous 'Nigerian prince' scam is the longest-running version, but the pattern appears in dozens of forms.
The FBI's IC3 reported $2.7 billion lost to advance-fee scams in 2023, with average loss of $4,500–$25,000 per victim. The FTC notes lottery and sweepstakes variants alone affected over 60,000 victims that year.
How it works
Initial contact via email, social media, phone, or postal mail. Story includes a large pending payout the victim is uniquely positioned to receive.
First fee is small — under $200 — framed as a 'processing fee,' 'release tax,' or 'background check.'
After payment, a complication appears: 'unexpected tax,' 'wire transfer requires deposit,' 'lawyer fees,' 'compliance review.'
Each fee is larger than the last. Victims who have paid feel sunk-cost pressure to continue.
If a victim refuses, the scammer escalates: threats of legal action, mention of 'lost opportunity for someone else.'
Eventually the victim either runs out of money, contacts authorities, or accepts the loss. Promised payout never arrives.
Red flags
- You've won a lottery, sweepstakes, or contest you don't remember entering.
- A stranger or distant relative claims to leave you an inheritance via email or international wire.
- Any request to pay fees, taxes, or shipping costs upfront to receive a much larger amount.
- Payment requested via wire transfer, gift cards, cryptocurrency, or money transfer services to individual names.
- Pressure to keep the transaction confidential — 'don't tell your bank,' 'don't tell family.'
- Documents provided contain official-looking logos but with subtle errors, generic addresses, or VOIP phone numbers.
- Sense of urgency — 'must complete within 48 hours or the funds revert.'
Real cases
Nigerian 'prince' / 419 fraud (1980s–present)
Named for Section 419 of Nigeria's criminal code. Originally postal-mail letters, now overwhelmingly email. The story varies — government official, oil executive, deceased dictator's widow — but always requires upfront fees to release a fortune. The IC3 still receives thousands of variant reports yearly. Total US losses since the 1990s estimated in the billions.
Publishers Clearing House sweepstakes scam (ongoing)
Scammers impersonate Publishers Clearing House calling 'winners' to claim a $10 million prize after paying $500–$5,000 in 'taxes.' The real PCH never asks for fees. The FTC documents thousands of victims yearly, predominantly seniors. PCH publishes warnings on its own website but the impersonation continues.
Romance scam advance-fee variant (2020s)
After weeks of dating-app chat, scammer claims a business emergency abroad and asks the victim to wire 'unlock fees' for a frozen account. Often combined with romance-scam grooming and pig-butchering crypto pitches. FTC reports romance-scam losses of $1.3 billion in 2022, with a major fraction involving advance fees.
If you've been targeted
- Stop paying immediately. Every additional fee feeds the scammer; none unlock the promised payout.
- Save all communications: emails, texts, transaction records, names and account numbers used.
- Report to the FTC at reportfraud.ftc.gov, FBI IC3 at ic3.gov, and your bank's fraud department.
- If gift cards were used, report to the issuer (Apple, Google, Amazon, etc.) — they sometimes can freeze unredeemed cards.
- Block all contact methods. Scammers often re-contact under different names; ignore all follow-up.
- If you're a senior or know one targeted, contact AARP's ElderWatch or your local prosecutor's victim services.