One of the most prevalent and copycatted scams on the internet (and indeed even in postal mail) has got to be the Nigerian Money Transfer Scam. Many people have heard of this con, but few know it has been around since the 1980’s in various forms. Today it has grown exponentially with the invention of email and the internet, and has seen countless variations.

The Nigerian Scam (otherwise known as a Money Transfer Scam) has very old roots, dating back to the early 1900’s as a scam called the Spanish Prisoner. In this version, a letter was sent to a victim stating that a rich prisoner in Spain would share his vast wealth if the victim would send money to the prison to bribe the guards to free him. Obviously there was no prisoner, and any money sent was pocketed and the victim never heard from their prison-bound partner again.

Obviously this sounds bogus to us today, but witness this email I received not too long ago, and see if you can detect the similarities to our Spanish Prisoner friend. (The link will take you to a different website).

Sound kosher? It shouldn’t. Although it doesn’t ask for cash up front, the new version of this scam uses bank policies to its advantage. If you accepted the transfer of money from these ‘colleagues’ in Africa, you would indeed receive a wire in your account. However here is where things get tricky. Wires work similarly to checks. It takes a certain amount of time to make sure the wired funds are good, and if they aren’t, they bounce. The Africans request that their portion of the funds be wired back to them no later than two weeks after you get the money. It just so happens that the bank may take up to three weeks or more to validate the first wire transfer to make sure that it is good. If you wire funds back to Africa immediately, then learn later that the first wire they sent you bounced, you now have to pay back all that money you sent out. This usually is in the amount of several million dollars.

Banks are aware of this scam and many of its variations, and many take steps to monitor any suspicious activity. However banks are limited in what they can do to protect you, often it is the victim themselves who are convinced that the transaction is legitimate. The promise of quick, easy money often blinds many to the obvious signs of fraud. If you decide, despite your banks warnings, to go ahead and wire the funds, you will be responsible to re-pay all the money.

So buyer beware! We often say a fool and his money are soon parted, but often it isn’t foolish people who are scammed by this approach, but those who are in financial trouble already. Often people won’t see the suspiciousness of the situation, they will simply see how many debts can be paid off with the money they have been promised. So the lesson learned? Take everything with a grain of salt, and if something seems fishy, it probably is. If you have doubts about it, take it to your local bank, or talk to a financial advisor. Often they will have heard of something similar and will be able to tell if it is a legitimate transaction or not.

Around tax time all kinds of fraud are reported, mostly people posing as the IRS on the phone and phishing for personal information to “confirm the information disclosed on your tax filing.” The new twist this season is using the Stimulus refund to gain access to your personal information.

Because this is not the usual refund most people expect, they are more susceptible to fraud surrounding it. Scammers will make calls to people, posing as the IRS and asking them to confirm their information so they can receive their Stimulus checks. Usually they are asked for their bank account information. When people hesitate, they are told that the only way they will receive their check is to disclose their account number. People might also be asked to disclose their social security numbers, addresses, driver’s license numbers, loan information, health insurance information, and more. These scammers will then take this information and open up credit cards, clean out bank accounts, or even file fraudulent tax returns in your name.

The same precautions that will save you from other tax scams will save you here as well. The IRS never sends unsolicited e-mails or phone calls, so treat any with caution. Call the IRS at 1-800-829-1040 to confirm any correspondence you receive. E-mails from the IRS might seem unusual, but now that more and more people are filing electronically, and having their refunds directly deposited into their bank accounts, e-mails asking for confirmation of your routing number and bank account are more believable.

These emails can be more dangerous than you think. They often look very official, with IRS seals and fine print on the bottom of the message, all in an attempt to lend credibility. These messages often have a link that you click to find out more information about “special rebates.” Clicking on these links at all, even out of idle curiosity, will download malicious software that allows hackers access to your computer and any personal info you have on it. So if it seems too good to be true, don’t click on the links “just to see.”

The cousin of the refund email scam is the audit email scam. This method uses scare tactics instead of the promise of money. The victim receives an email saying that they are being audited, and they must follow a link to a “secure” site to provide information. This of course instantly downloads the same software as before, and as a bonus any information you input into their website is now theirs to do with as they please.

Taxpayers have received more than 33,000 of these scam e-mails, reflecting more than 1,500 schemes. If you receive one of these emails, forward it to phishing@irs.gov to report it.