An advance fee scam happens when a fraudster asks you to pay money upfront before you can receive a service, prize, loan, or investment profit.
Once you pay the initial fee, the scammer invents new excuses to demand even more money—such as unexpected taxes, legal costs, custom duties, or processing fees. In the end, the fraudster takes your money and disappears without delivering what was promised.
Common Types of Advance Fee Scams
- Fake Investment Withdrawal Taxes: After showing you fake profits on a trading platform, the scammer claims you must pay a "withdrawal tax" or "service fee" before you can cash out your money.
- Loan or Credit Fees: You are offered a guaranteed loan or credit card, but you are told to pay an upfront "processing fee," "insurance deposit," or "application fee."
- Inheritance or Lottery Winnings: You receive a message claiming you won a sweepstakes or inherited money from a distant relative, but you must pay administrative or legal fees to claim the cash.
- Recovery Scams: Fraudsters contact people who previously lost money to a scam, promising to recover their stolen funds if they pay an upfront legal or hacking fee.
- Fake Job Opportunities: Scammers offer you a work-from-home job but demand you pay upfront for training materials, background checks, or home-office equipment.
Warning Signs of an Advance Fee Scam
- Unsolicited offers: Reaching out out of the blue by text, email, phone call, or messaging apps with an unexpected offer.
- Upfront payment requirements: Demanding cash, wire transfers, gift cards, or cryptocurrency before delivering a service, loan, or payout.
- High-pressure urgency: Forcing you to act immediately so you do not have time to think or ask a trusted friend for advice.
- Demands for secrecy: Pressuring you to keep the transaction confidential from family, friends, or bank tellers.
- Telling you to lie: Instructing you to lie to your bank or credit union about why you are withdrawing or wiring money.
- Guaranteed returns or approval: Claiming an investment return or loan approval is 100% guaranteed. Legitimate financial professionals never guarantee investment returns.
- Unusual payment methods: Demanding money through cryptocurrency, gift cards, wire transfers, or digital payment apps.
Are You Being Targeted by an Advance Fee Scam?
Ask yourself these key questions about your financial transaction:
- Were you contacted out of the blue about an investment, loan, job, or prize?
- Are you being asked to pay money upfront before you can access your funds, loan, or profits?
- Does the person claim you must pay "taxes," "customs fees," or "withdrawal fees" to unlock your account?
- Are you being pressured to pay quickly or keep the payment secret?
- Were you instructed to use cryptocurrency, wire transfers, or gift cards to pay the fee?
If you answered yes to any of these questions, stop communicating with the contact and do not send any money.
How to Protect Yourself
- Never pay to receive money: Real prizes, legitimate loans, and official government agencies will never ask you to pay an upfront fee to receive your money or winnings.
- Check licensing: Verify if a lender, broker, or investment firm is licensed to do business in Washington State using the DFI lookup tool at dfi.wa.gov.
- Verify taxes independently: Real government tax agencies do not demand tax payments through private trading apps, crypto transfers, or gift cards.
- Talk to a trusted advisor: Ask a friend, family member, or bank representative for their perspective before sending money to an online contact.
What to Do If You Paid an Advance Fee
- Stop all payments: Cut off communication with the scammer immediately and do not send additional money, no matter what reasons they give.
- Notify your bank or credit union: Report the fraud right away to freeze compromised accounts, stop pending wire transfers, and protect your credit.
- Beware of recovery scammers: Ignore anyone who messages you claiming they can recover your lost money for a fee. Official government agencies never charge to help recover your money.
How to Report Advance Fee Fraud
If you live in Washington State or lost money to an advance fee scheme, file reports with state and federal agencies:
- Washington State DFI: Report financial, loan, or investment scams directly to DFI online at dfi.wa.gov/file-complaint or call 1-877-746-4334.
- Washington State Attorney General: File a consumer protection complaint at atg.wa.gov or call 1-800-551-4636.
- Federal Trade Commission (FTC): Report advance fee fraud at reportfraud.ftc.gov.
- FBI Internet Crime Complaint Center (IC3): Report online advance fee and crypto scams at ic3.gov.