Advance Fee Fraud
Americans lost $12.5 billion to fraud in 2024, according to the FTC.
Quick Answer
Advance fee fraud tricks victims into paying money upfront for a promised future benefit—like a loan, prize, or inheritance—that never materializes, with the FBI's Internet Crime Complaint Center (IC3) reporting 7,097 advance fee scheme complaints in 2024.
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How It Works
1
A scammer contacts you unexpectedly via email, text message, social media, or phone call with an enticing offer. This could be a guaranteed loan, a lottery win, an inheritance, a job offer, or a lucrative investment opportunity.
2
To receive the promised benefit, you are told you must first pay a fee. Scammers disguise this payment as a processing fee, tax, insurance cost, administrative charge, or another legitimate-sounding expense.
3
The scammer pressures you to pay the fee quickly and often requests payment through untraceable methods like wire transfers, gift cards, or cryptocurrency. After you pay, the scammer may invent new fees and demand more money.
4
Once you have paid, the promised money or service never arrives. The scammer cuts off all contact and disappears with your money, which is extremely difficult to recover.
Red Flags
- You are asked to pay an upfront fee to receive a loan, prize, or other large sum of money.
- The offer seems too good to be true, promising guaranteed high returns, easy credit, or large winnings.
- You are pressured to act immediately with claims that the offer is for a limited time.
- The sender uses a free, non-corporate email address (like Gmail or Yahoo) for official business.
- You are asked to pay using unusual methods like gift cards, wire transfers, or cryptocurrency.
- The person or company contacting you is not registered with state or federal regulators.
- You are told to keep the transaction a secret from your bank or family members.
What to Do If Targeted
- Stop all communication with the scammer immediately. Do not send any more money.
- Contact the financial institution you used to send the money (your bank, credit card company, wire transfer service, or gift card issuer). Report the fraud and ask if the transaction can be reversed.
- If you sent cash through the mail, contact the U.S. Postal Inspection Service at 877-876-2455 to try and intercept the package.
- Report the fraud to the Federal Trade Commission at reportfraud.ftc.gov.
- File a complaint with the FBI's Internet Crime Complaint Center (IC3) at ic3.gov.
- Check your credit reports and monitor your accounts for any signs of identity theft.
How to Report It
- FTC — File a fraud report with the Federal Trade Commission. Your report helps law enforcement investigate and stop scammers.
- FBI IC3 — Report internet-related crime, including advance fee schemes, to the FBI's Internet Crime Complaint Center.
- FCC — File a complaint about phone scams, robocalls, or unwanted calls with the Federal Communications Commission.
- AARP Fraud Helpline — Call 877-908-3360 for free support from trained fraud specialists. Available to anyone, not just AARP members.
Key Statistics
- In 2023, consumers reported losing over $10 billion to fraud, a 14% increase from 2022. — FTC 2024
- The FBI's Internet Crime Complaint Center (IC3) received 880,418 complaints in 2023, with reported losses exceeding $12.5 billion. — FBI IC3 2023 Internet Crime Report
- Victims over 60 years old filed 1,951 complaints about advance fee fraud in 2023, with total losses of $67,923,263. — FBI IC3 2023 Elder Fraud Report
- The FTC received over 14,000 reports of fraud involving advance payments for credit services in 2023, with victims losing more than $34 million. — Bitdefender / FTC 2024
- Imposter scams, which can use an advance fee structure, were the second-costliest fraud category in 2023, with losses of nearly $2.7 billion. — FTC 2024
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Frequently Asked Questions
An advance fee scam is a type of fraud where a scammer promises a large sum of money or a valuable item in exchange for a smaller upfront payment. Once the victim pays the fee, the scammer disappears and the promised benefit is never delivered. These scams often take the form of fake loans, lottery winnings, or inheritance notices.
No, legitimate lenders will not guarantee a loan and then ask for money before you get it. Fees for a legitimate loan are typically deducted from the loan amount itself, not paid upfront. Scammers often target people with poor credit by promising guaranteed loans after an advance fee is paid.
In 2023, the FBI's Internet Crime Complaint Center (IC3) received over 1,951 complaints of advance fee fraud from victims over age 60, resulting in losses of over $67.9 million for that age group alone. The Federal Trade Commission (FTC) reported over 14,000 cases of advance payments for credit services in 2023, with losses exceeding $34 million.
Recovering money from an advance fee scam is very difficult, especially if you paid with wire transfers, gift cards, or cryptocurrency. It is crucial to immediately contact your bank or the financial service you used to report the fraud and see if the transaction can be stopped or reversed. Reporting the crime to the FBI and FTC is also an important step.
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