We just received a wire from Nigeria to be credited to a customer's account. This particular customer in our mind would have no reason to be receiving such a wire. With all the Nigerian scams going on do we have a reason to be concerned? It seems very suspicious to us. We are a very small bank and are not used to such activity.
What should we do?

watch the account very carefully, place a hold if need be, contact the customer and they may be able to give you insight on whats "going on" and maybe you can fill them in on all the scams and the sorts

Thanks for the advice. I spoke with the customer and he was expecting the wire, I explained the Nigerian schemes going on, etc... He was thankful for the caution the bank had taken. We are still going to watch the account carefully for a while now though. Thanks again.

Wow,this has to be a first! Real money coming from Nigeria? Sorry but I would lokk at this with a real jaundiced eye!

The customer would really have to prove to me that this is a legitimate transaction!

Nanda - all of the fgraudulaent activity with Nigeria concerns money being sent to Nigeria, not coming from them. While I think it is good that you are being vigilant, it is hard to perpetrate fraud when you are the receiver of the transaction (I'm not saying it can't be done, just that it is difficult).

I agree w/ Fraudman. What about anti-money laundering issues, terrorist financing, and suspicious activity reporting requirements? I don't think it matters which way the money flows.

About the customer: Make sure he or she is the one who "initiated" the transaction and that they were not prompted into accepting the funds as part of a larger scheme.

I too agree with Fraudman. I understand that Nigeria is a crossroad for the drug trade. On the other hand, I note the original poster did not say how much money was wired nor how much money the customer has. If this is a Nigerian scam, it could be that the scammers feel they have a big enough fish on the hook to warrant casting out another shiny lure (a few thousand or so) to get the big fish firmly hooked.

Happy, tell me the last time you saw or heard of anything legitimate involving Nigeria.

This is the most corrupt country in the world when it comes to anything financial.

I would run away from this!

Fraudman - we see several incoming wires a month from Nigeria, a hotbed of oil exploration and drilling, and all are legitimate. We also see many outgoing, for the same industry. These are used for the funding and purchase of equipment and material used in the oil industry.

While caution is needed, to blatantly state that any activity involving Nigeria is fraudulent is doing your customer a dis-service. Additionally, I have yet to see anyone tell me how an incoming wire could be fraud.

Happy, check the US state Department website and read all the cautions they have. No company does any business in that country without first paying off someone. It starts there and continues.

Happy, the incoming wire, in and of itself, may not be a fraud risk. But, there is a strong possiblity that the recipient has been instructed to move the money to another country via Western Union, etc. The fact is that, as red flags go, the word "Nigeria" is a legitimate cause to raise the biggest red flag you've got. It may be unfair, but if you save your customer from a loss or from a money laundering investigation, they'll understand. Caution must be exercised when dealing with these transactions, period.

But there would still be no loss to your customer, hence no fraud. If your customer receives a $10,000 wire, and is instructed to wire anything under $10,000 somewhere else, I fail to see the risk to your customer; he still has not wired out more than he has received. A wire can't be rescinded or returned once your customer has been given credit unless your customer gives permission to do so.

Again, I fail to see the risk and this appears to be a case of "the sky is falling." Just my opinion.

While I agree that you can't condem an entire country, anything dealing with Nigeria certainly needs to be looked at with caution.

One thing that I have thought of is that possibly the person receiving the wire may be part of one of their scams, either knowingly or not. Some of the recent fraud we have seen with the US Postal Service money orders has suggested that they may have help within the US or Canada, even if it is just forwarding mail and so forth.

I think that anything connected with Nigeria at least justifies some questions to the customer and as long as you let them know that you are trying to protect them they should not be offended.

I'm not saying we don't need to exercise caution, but responses such as "customer would really have to prove to me that this is a legitimate transaction" or "place a hold if need be" and "I would run away from this" tell me that we are automatically assuming that it is fraud, without doing any research at all. And it is an incoming wire, not outgoing. Prudent steps should be taken, but let's not inconvenience our customer when we don't have the facts. (I'd love to know how you can place a hold on a wire tranfer, I'm sure your deposit contract says 1 day funds. Like to see that one defended in court)

When I contacted the customer they explained that they make special industrial waterproof cameras and that the wire was for payment for one of these cameras. After reviewing the customer's account there is nothing overtly suspicious going on within the account, just regular business trancactions.

I intially had such a strong reaction to a Nigerian wire, because the day before we had just received counterfit postal money orders that were part of a Nigerian email scam.

ok maybe hold was the wrong word, maybe a block on the account until further investigation, who knows... just being paranoid

and that is my point, you are being paranoid without doing any type of investigation. Do your investigation, then make a decision about what you need/don't need to do. But when assumptions are made, that is when your liability comes in to play.

Here is a statement from the U.S. Department of Commerce:
If a proposal looks legitimate, and a U.S. company is interested in pursuing it, the company is strongly urged to check the bona fides of the Nigerian company before proceeding. However, the legitimacy of a firm is not necessarily a sufficient indication that all soliciations using the firm's name are legitimate. The transaction itself must be verified, because many scams use legitimate company names or names of Nigerian Government agencies in fraudulent solicitations. Until the specific proposal is verified, the US company should not send out letterhead, invoices, bank account information, or product samples.

and where in here does it say to place a hold or reject an incoming wire? Or the make your customer prove that it is legitimate before you will allow them to accept it?

Remember, you are getting in a wire, not sending one out. Again, show me how an incoming wire can be fraudulent.

Happy, the only thing that is suggested is to acknowledge a red flag when one slaps you in the face. Not every red flag is fraud, but ever red flag should be investigated as a potential for fraud. If the funds are released without so much as an interview of the customer, you don't know that they are not withdrawing the money and moving it through Western Union to Russia. 2 years may pass before a Grand Jury investigation, but it's a distinct possibility. It is irresponsible for the people at the bank to not check this out. Nanda is comfortable with the situation, but not before checking it out. That's all we're asking.

Wow! Nigeria is becoming the equivalent of shouting "Fire!" in a crowded theater. Be careful, I don't think it is right to brand the whole country as corrupt. Although it is very much so, I am betting that at least a few legitmate, forthright individuals and businesses exist inside the country. Also, don't watch out too closely for your customers, calling with concerns was a nice service to them, but to place holds and get too involved is not right either. In lending you have to be careful not to try to run the company or tell the owners how to run the company. Be cautious not to try to tell the customer who they can and cannot do business with.

Some time ago, I had a whloesale company that received an order for 500 car stereos from a company in Nigeria. They were to be shipped by air. The deal was arranged and the company deposited a check from a company in California for about $35,000.

While this was going on these same Nigerians contacted the company about Swiss Army watches.

Oh yes, the check was counterfeit. When I called the company to ask about the check and the transaction, I was told they did business all over the world and had never had this problem.

They were very pleased we were dilligent and informed them of the counterfeit check immediately.

We had an incident yesterday with a customer who brought in a $40,000 check drawn off of a Canadian Bank. Our CSR told the customer it would have to be sent in for collection and inquired a little further about the source of the check. The customer was visiting with some Nigerian people over the internet about investments. The Nigerians sent her the check and she was supposed to send them some of the money back. Our employee contacted the Canadian bank that the check was drawn off of and of course, the check was no good. This Canadian bank stated they have had several losses over the past few months due to scams like these.

There is a lot of information out there regarding the Nigerian scams and the lottery scams. There was a huge write-up in our local newspaper about it a couple of months ago. But even with the warnings, there will always be someone vulnerable to fall for it.

If it is spam it is a scam. If it walks and quacks like a duck, it is a duck. If it is from Nigeria, it is a fraud!

Quote:

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If it is from Nigeria, it is a fraud!

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We actually send and receive several wires per month to and from Nigeria on behalf of several oil related companies. Not everything involved with Nigeria is bogus. Common sense and due diligence usually will save the day.