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What can be more tempting than the idea of free money? “You are the winner!” “You have money just waiting to be collected!” Scam artists know that free money (or really, anything for free) is often so attractive that we forget to practice caution. That is why lottery scams are so powerful – the idea of an unexpected windfall makes us forget just how dangerous and expensive scams can be.
What Are Lottery Scams?
A lottery scam, at its essence, is a trick to make you spend money thinking that you have won free money. The scam artist alerts you in some way that you have won the prize, but to collect it you must take a number of steps. While most lottery scams attempt to steal money from you, others can use the same tricks to steal personal or banking information that can be used for fraud or identity theft. If you have any doubts or suspicions about the lottery, it’s better to do at least a small research: to check FTC, to make Google search, and read other consumers’ feedback on review websites, e.g. PissedConsumer.com, BBB, etc.
10 Most Common Lottery Scams
While there is no limit to the imagination of scammers, there are some common lottery scams that pop up again and again. The most common lottery scams should be the easiest to avoid, but the scam artists work hard at making them sound convincing.
1. “Follow Simple Procedures”
The most basic lottery scam can be dressed up in many ways. A scam artist notifies a victim through the mail, by phone, or by email that he or she has won funds in the lottery. In order to claim the money, the victim needs to follow some simple instructions.
This might be to give the scam artist bank information over the phone or it may require the victim to fill out a form with all relevant personal information and banking numbers. When the form is sent back or the phone call is completed, the scammer has what he needs for identity theft and the victim has nothing.
2. Fake Celebrity Lottery
In this scam, you are alerted that you have won money by entering a lottery drawing hosted by a particular celebrity or attached to a celebrity’s name. Recently there has been a fake Princess Diana Lottery and an Oprah Winfrey lottery as well. The famous person’s name makes it appear more legitimate and the “winners” are more likely to fall for the ruse.
3. Simple Transaction Fees
The victims of this lottery scam are notified that they have won a large sum of money. In order to process the funds, the victim is required to submit his/her banking details and to pay a small processing fee. The fee, however, may be thousands of dollars, but compared to the large sum they have just won, the amount seems reasonable.
The victim sends the funds via wire transfer and never sees his/her money again. Nor does the person see the promised winnings. In Canada, an elderly woman almost lost $15,000 in a scam much like this one. She was notified over the phone about her large prize and was asked to deposit the $15,000 as a part of the transaction. The almost-victim set up a wire transfer for the full amount, but the transaction was canceled by an alert family member before the scam artists could collect money.
4. Lottery Tax Collector
When you win big money you have to pay taxes on it. Some scammers use this to their advantage by calling or emailing victims and telling them that they have won a large amount of money but must pay the taxes before the funds are released. These scam artists will request a bank account for a deposit and an “authorization” to remove taxes before depositing the funds. The scammers get all of your information including your banking details and you get no prize.
5. “Company Blackmail”
This lottery scam targets a victim in a less direct manner. The scammer calls a company employee to alert the person that the entity he or she works for has won a lottery. But the funds can’t be delivered to the firm for some reason. The scammer asks the victim if he or she can receive the funds on the company’s behalf and then transfer the money later.
If the employee agrees, the scammer will request a bank account and perhaps a processing or advance payment fee. If the worker balks at releasing information or funds, the scammer threatens the employee with telling the company that he/she was planning to steal the firm’s winnings.
6. “You Win a Big Hassle”
A common lottery scam is to simply win something real along with a tremendous hassle. This isn’t actually illegal, but it is a ridiculously challenging sales technique to extricate yourself from once you fall for it. The victim is notified that he has won a cruise or a free trip or another prize. All he has to do to claim the prize is to show up at a certain place at a certain time.
Once the person gets there, he/she is subjected to any number of high-pressure sales and conferences before getting the prize, and mostly it turns out to be far less valuable than it was described. You may even have to buy a stake in a time-share or something similar before you take possession of the prize. You may also be asked to pay a “service fee” or some other imaginary payments that wind up being more than the prize is worth. Naturally, the scammers come out ahead.
One victim found his own version of a hassle when he realized he was a winner through a gaming website. Despite collecting all pertinent documents and notifying the company, he has never been able to collect his winnings. He was told that the winning numbers were not a match despite his proof otherwise and the issue was apparently never resolved.
7. Bogus Ticket Agents
The internet has brought with many new possibilities across the country and the world. One of those possibilities is the availability of online lotteries and opportunities to participate in lotteries in different areas. This is a difficult lottery scam to spot because there are legitimate online lotteries and lottery ticket agents mixed up with the scammers.
The principal of this scam is to sell you lottery tickets through the internet. Since you can’t buy them directly, you will have to buy them through a lottery agent. Some agents are legitimate, and others are simply collecting your ticket money and giving you nothing in return. Often you will be required to enter your credit card information which adds a risk of identity theft as well.
If you do get taken in, it isn’t worth much knowing how to report lottery scams. The government does not oversee online lotteries, especially the ones that originate from abroad. To avoid this particular scam, it would be the easiest simply not to buy lottery tickets online.
8. “Reduced Payouts”
In some cases, you actually do win the lottery or at least win a nice sum from a scratch-off ticket. Pleased, you go to the gas station or office to collect your winnings only to be told that there were additional fees and taxes and you wind up with a miniscule payout from your much larger winning ticket.
In cases like this, it is worthwhile knowing how to report lottery scams to the state lottery officials because you’re dealing with a thief in the store. The gas station attendant can simply pocket the “additional fee and taxes” from your prize money. In short, the individual is stealing your winnings.
9. The Google Lottery Scam
What name could be safer than Google? Many victims recently received notifications that they had won a lottery hosted or sponsored by the internet giant. The Google lottery scam followed the same formula as many others – in order to claim their winnings, the victims were asked to pay a small fee by wire transfer to ensure the funds would be distributed correctly to their bank accounts.
The Google lottery scam was almost immediately identified by the tech company and Google has warned potential victims that the tech company does not have or support any type of lottery or sweepstake and asked to delete any emails that state otherwise.
The scammers worked hard to make the notification about the Google lottery seem particular authentic as demonstrated by Google’s own example below:
10. Facebook Lottery Scam
The Facebook lottery scam is similar to the Google one in that criminals are using the name of an established company to add credibility to their claims. The Facebook lottery scam usually involves a notification over Facebook Messenger. The victim has a new friend request and when it is accepted, a conversation develops notifying the victim that he or she has won a large prize in the Facebook lottery.
In order to process the winnings, the victim must wire a small fee and give up some key banking details. The Facebook lottery scam doesn’t just rely on the familiarity of the Facebook name, but also the relationship that can develop between the scammer and the victim through the chat messages. This scam has a very personal feel in that occasionally the victim can feel as though the scammer is a true friend who is trying to help them.
Simple Guidelines on How to Avoid Lottery Scams
Lottery scams work because we are susceptible to good news and truly want to believe that we might win an unexpected windfall. Avoiding these schemes and knowing how to report lottery scams is not only a matter of personal security, but a means to preserve your current income as well. Consider the following ways to stay safe when it comes to spotting lotto scams.
1. Be Skeptical
If something or someone seems too good to be true, practice a healthy skepticism. Scam artists count on their victims being too excited to be cautious, so your first line of defense is always to assume you are being scammed.
2. Never Pay to Get Funds
If you have won something, you won’t have to pay money to get it. Don’t wire any money to collect the prize and don’t fall for a similar scam where a supposed winner needs to “borrow” some of your money but will pay you back once the big winnings are in their account.
3. Buy Lottery Tickets in Legitimate Places
If you need an agent to buy tickets on your behalf, don’t buy those tickets. Buy your tickets in a legal state or federal lottery outlet.
4. Skip Overseas Lotteries
Online and overseas lotteries are not monitored and they are an excellent place for criminals to hide. Your best bet is to skip them all together.
5. Confirm with the Official Lottery
If you are told you are a winner or you have matching numbers, contact the official lottery department by phone or through the website. If you can’t find any online evidence of the program you’ve supposedly won, it’s a scam.
6. Check for Known Scams
There are many websites like PissedConsumer.com available where consumers can share their experiences and warn off others from falling for scams or buying bum products. Social media sites and communities are a great place to start your search for insight and information. Consumer advocacy bureaus monitor and report on known scams and the attorney general’s office in your state or even the Better Business Bureau may offer additional information about potential offers.
7. Report Lottery Scams
Most lotteries are held at the state level. If you suspect fraud or you are a victim (or almost a victim) of a lottery scam, it is important to know how to report lottery scams. Concerns over state lottery can be reported to the Attorney General of each state or the state lottery commission. Larger programs like Sweepstakes can be reported to the Federal Trade Commission. On FTC website you may also read about common federal scams to help you determine if what you’re seeing is a known risk.
Winning money is exciting – especially if it is unexpected. But how often does money really appear out of nowhere? Thieves know that unexpected windfalls of cash are thrilling – perhaps so thrilling that you leave common sense behind. Don’t fall for it. Having a bit of extra cash in your pocket might sound pretty tempting, but the thought of losing the money you do have to a criminal ought to be warning enough to avoid any lottery scams and schemes.