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I'm a South African and was listed as beneficiary of a fund from an American citizen. I've received correspondence that the account which the fund was paid into has been inactive for a very long time and it must be reactivated with a fee of US$200 before the fund can get transferred.

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    If it's your account why can't you ask your bank? – user253751 Jan 30 at 18:17
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    Was this correspondence via email or letter? – Steve Smith Jan 31 at 15:22
  • Do you know an American citizen that might have listed you as a beneficiary? – chepner Feb 2 at 19:04
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This has all the hallmarks of a scam. If they really needed to charge a fee they could deduct it from the account balance. And if this fund has existed for a long time why didn't you already know about it and do something about it before?

If you have reason to think it is legitimate, e.g. you actually knew the "American citizen" the money came from and have reason to believe they left/gave you money, then you should get it sorted out by contacting them or their executors, or the bank where the money is directly

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  • Thank you I will try and get to the bottom of this. Your response is highly appreciated – Nathan Jan 30 at 9:24
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    @Nathan, don't "try and get to the bottom of it" - it's a scam. Delete the messages, block the sender and move on. – Vicky Jan 30 at 11:48
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    Another point is that if the account had a significant amount of money in it, as would almost certainly be the case if it's a trust fund (and if the amount isn't significant, why are they bothering?), then the bank would almost certainly be perfectly happy to let the account stay open, collecting interest. – jamesqf Jan 31 at 3:22
  • @Vicky: There are instances where people have been left legacies (or distant relatives inherit if the person dies intestate), and "heir hunters" locate them, so something of this sort COULD be legitimate. – jamesqf Feb 2 at 3:03
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    @jamesqf the risk of false negative here is tiny given the background numbers. This probably happens legitimately (and without the $200 fee required) like once per 100,000 people a year. On the other hand attempted scams like this happen more like 1,000,000 times per 100,000 people per year (I certainly get at least one such email per month). So that’s million to one odds. – Vicky Feb 2 at 8:16
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If it isn't a scam, then all of the following need to be true.

The lawyer who contacts you will give their name, practise name, address and phone number.

Googling that practice name will come up with a website with the same address, and ideally the same phone number. If it is not the same phone number, calling the number on the website (not the phone number they gave you) and asking to be put through to your contact will reach them.

The lawyer will send you a physical copy of the will in the mail.

The lawyer will tell you which bank it is, which branch it is, and what the account number is.

Calling the bank's customer services department via the number on their website (not a phone number they gave you) will get through to someone who can tell you whether this is correct, and why the money needs to be paid by you instead of being deducted from the closing balance.

If any of these does not happen, it's a scam.

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    Also, the lawyer will be listed at the relevant bar association, and the bank will be listed by the bank supervisor. Use independent sources of verification. – MSalters Jan 31 at 0:38
  • @MSalters Yes, I tried to lean on the "verify independently" angle there. Certainly don't trust anything! – Graham Jan 31 at 10:28
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    I haven't seen one personally, but I image some inventive scammers have their own website that will pass the "googling" step above. Better to verify independently with other sources like the bar association. – studog Jan 31 at 23:34
  • @studog Some have done imitation websites, yes. But Google doesn't list them, or at least they're not going to come high in the search rankings. So googling for the bank is pretty reliable. Unless the bank itself is entirely fake, of course. – Graham Feb 1 at 1:13
  • "practice", not "practise". – Acccumulation Feb 1 at 18:16
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In my experience, there can be "slap on the wrist" fees charged by banks for this sort of thing, so the premise is not entirely implausible. That being said:

  • $200 is absurdly high for an account reactivation fee - keep in mind, the bank usually wants to keep your business.
  • Typically, dormant account fees are automatic. In other words, you don't have to agree to pay the bank anything - they will just automatically debit your account, say, $5 a month until the funds are considered abandoned and surrendered to the state (or the account balance reaches $0). From the banks point of view, they're trying to extract a bit of income from customers who are not coming back. Requiring approval from the customer to assess the fee would make it very difficult to get any income on truly inactive accounts.
  • Most banks will happily waive or even refund some/all these fees for you if you ask politely. The fees are designed to generate income from balances that would otherwise be surrendered to the state - typically, you will be worth much more to the bank in the long term as an active and happy customer. Think about it from the bank's perspective: if you stand to inherit a bunch of money, the bank would love to do you as many favors as possible to increase the chance you leave the money in an account with them when all is said and done.

Listen - I can't promise with 100% certainty that this is a scam, but I'd happily give you 50-1 odds on it. It's got all the trappings of a scam (unexpected, small initial request, different country). I don't presume to know anything your circumstances, but for a South African friend of mine, $200 is close to a week's income. Don't go giving it to some sketchy stranger on the near-zero chance this is legit - you earned that money, keep it for yourself.

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Scam. Scam. Super scam.

It has all the red flags of a scam pitch.

Out of the blue, you get contacted. Didn't expect it, no advance phone calls, and you don't know the person.

... Always through some media that is extmely low cost to send out. (as opposed to how a real executor would operate, first class mail ($1.20) or certified ($10ish). Because they sent out a million of these, because that's how many they need to send to find a few suckers, and they'd go broke sending them certified mail.

... Because a real executor of an estate has access and authority to spend the assets of the estate itself, to pay for the costs of managing the estate, including hiring a detective to find you if need be.

You are in a fortunate situation, dear sir! A bunch of money will be coming to you Real Soon Now.

... From someone you've never heard of. Yeah, right. (or possibly from someone you have heard of; if you're active and public with genealogy, scammers can scrape that data and look for distant relations who have recently died.)

However, you need to put forward a little money to unlock it.

Bunk. There's no such thing as bank reopening fees. If there were, the bank would simply take the fee out of the account itself, directly: the $40,000 account would reopen with $39,800. Or in the unlikely possibility the executor of the estate had to front that money, the executor would simply do so from other estate assets. Or go to court to get a judge to resolve the situation.

What will really happen is more roadblocks, more fees.

Scammers know what they're doing. The $200 is a carefully calculated number based on the experience that it's an amount that many people will spend for the chance. But here's what happens next. The scammer tells you that it worked. And you are thus assured the deal is legitimate, and you are relieved of that worry. Your money will be along soon.

However, there's another issue, perfectly normal in this case. Another fee is needed; it's $500 but of course this is a pittance compared to the amount you're due to receive. Can you go ahead and send that along please.

Now what has happened? You've already sunk the $200. But this thing has been proven to be legitimate, because it's working. I'm getting contacts from other people, a thing in actual mail just showed up for me to sign (funded by your $200)... it's the real deal. Besides, why would I start believing it's a scam? I've already sunk $200. If I back out now, the $200 will be wasted. This last bit is called "The fallacy of sunk costs".

So yeah, this logic will prevail someone to go deeper and deeper into the scam. And believe me, the scammer will be badgering you with all their strength to continue, and using cohorts to also try to convince you this is real.

Scammers know precisely how to game the "fallacy of sunk costs". The most effective (profitable) point is around 2.5 times the last payment. So it won't be an accident that the next payment will be around $500, and the next around $1300 give or take. They'll keep doubling this and-then-some until you simply run out of money and credit line.

Oh, but I'm hellbound and determined to fall for this. It's free money!

OK, then you get a lawyer in the US to find this money for you. Here's how you get a US attorney. First, search mainstream media news reports for something lawyer related - get the name (from the CNN news report) of an attorney firm. Then call them up and describe your problem coarsely. They say "We don't handle that kind of case" (this is good!) You then ask "If it was you, who would you hire for that type of job?" You will get a candid reference to the best lawyer in town.

Now, you have a bona-fide US attorney. Tell them what the scammer has told you about this money you're supposedly owed and who has it.

Understand the very important difference between someone who seeks you out, and someone you seek out. The person who seeks you out, unbeknownst to you, has sent this same come-on to millions. But when you call a lawyer's office who you have identified as bona-fide, and get a reference from them, you're not going to happen to get a scam lawyer, because scam lawyers don't get references from other lawyers.**

The lawyer you picked is going to do all the legwork on this opportunity. Now, there are two ways to pay for this.

  • You can pay them for time and materials out of your own pocket. I note that you were seriously considering sending up-front money to some scammer, so clearly, you don't have a problem with this "up-front" payment strategy. Upside, you keep ALL the winnings. Downside, you're out the cash if it's a bogus deal, but you're already comfortable with that.
  • You can pay them on contingency, or typically 33% of the winnings. However, once they hear your story, no lawyer will agree to do that, because they will recognize it as a scam, and will know there is no winning at all, and 33% of nothing is nothing.
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  • first class mail ($1.20) Where? – RonJohn Jan 31 at 16:41
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    @RonJohn international. The scammer is not in ZA and probably not in the US either. – Harper - Reinstate Monica Jan 31 at 16:45
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It's a scam!

At least, that's my initial gut feeling. Here is a key reason why I'm inclined to think that:

the fund was paid into has been inactive for a very long time

If this were legitimate, the money is likely not in the account any more.

I recall a scene from a television series called Highlander where a person who no longer ages, and who is now hundreds of years old, withdrawals money that has been gaining interest for centuries based on a very old deposit. Well, it's an interesting theory, but with today's financial laws used in America, the ability to do such a thing might be even less likely than an un-aging person who is a few hundred years old.

Case in point: I had some money sitting in a checking account. This was not my primary account, and so I just ignored the money for a while. After about 3 years and 8 months, the bank closed out my account and gave it to the state I live in. Now, if I wish to retrieve that money, I need to contact the state.

From my brief research into doing that, I suspect the specific details vary from state to state. In the state where I live, financial institutions are supposed to do that after 3 years of inactivity. In my case, this happened before the 4th year.

If the letter doesn't even tell you which state laws this account is in, that would indicate that this "bank" is being vague on the details, which would be another flag of this being legitimate.

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    Sending old money to The State is at least 35 years old, not a consequence of "today's financial laws". – RonJohn Jan 30 at 21:29
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    I meant in contrast to laws from hundreds of years ago. I didn't mean to suggest any specific change that happened within some of our lifetimes. – TOOGAM Jan 30 at 21:48
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    @RonJohn The fact that the term for this is "escheat" (Law French) provides a guideline for how old it is! – chrylis -on strike- Jan 31 at 4:35
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    @WoJ to be clear, when an account goes through escheatment in the US, the bank does not literally give the money to the state in the sense of the state taking ownership. The state simply becomes the custodian of the account (the bank no longer maintains it), the original owner retains permanent title to the account. In effect it's very similar to the process you've described, and most US states have websites that operate similarly to your example, where you can verify your identity and receive your property, no matter how old it is. – dwizum Jan 31 at 16:40
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    @dwizum: ah ok, thanks for the explanation. yes indeed, this looks very much like the French service Ciclade (ciclade.caissedesdepots.fr) – WoJ Jan 31 at 16:44
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A perfectly legal, but (IMO) sleazy variant of this scam:

In my state, California, "abandoned" bank accounts are turned over to the state after three years of inactivity, and other unclaimed monies (i.e. funds from an uncashed paycheck) can also get turned over to the state.

If the balance is high enough, it will draw the attention of lawyers who will offer to retrieve the money for a finders' fee. Or, you can just go to the California unclaimed property database and fill out the claim form yourself for free.

Other states probably have similar setups and similar people who offer to fill out free online claims forms for a fee.

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