Paypal Is Being Used In Popular Nigerian 419 Scam

A new variant of popular Nigerian 419 scam is possible via Paypal, according to report by Inquirer. The 419 scam is named after the relevant section of the Nigerian Criminal Code and the premise is always the same. Somebody offers to pay money into your account and give you a cut when you send it back. In truth the whole thing is money laundering but this latest twist – using Paypal – is significant because, on the surface, it looks like there’s no catch.
Instead of receiving the offer via email (as is normally the case), this person was approached over a Skype chat session. The perpetuator wants to transfer funds out a Paypal account and convert them back into US dollars. All the victim needed to do was check his Paypal account and when the money arrived, send a significantly lower amount back via Western Union.
Due to Paypal’s payment reversal policy, there is a loophole which enables the scam to work. As the payment would be classified as ’services’ rather than goods, there would be no proof that the the victim – who becomes the ‘vendor’ – provided any goods. So the ‘buyer’ – in this case the scammer – gets the money back. In the meantime, the vendor has sent the dollars via Western Union and then finds himself stuck with no means of recourse.
Both Western Union and Paypal can be blamed for making this scam work. Western Union makes it too easy to send and receive money anonymously while Paypal’s dispute resolution procedure system is a crude automated system.