Lottery scams are fraudulent schemes where unsuspecting victims are contacted by an organization claiming they have won a lottery or competition they never entered. The scammers then ask the victim to pay an administrative fee so that the funds can be released. Sadly, the prize money never appears, and the victim ends up paying an ever-increasing amount of "fees" and "taxes" with little hope of ever seeing their winnings. The victim becomes emotionally invested in the process and is tempted to continue sending money in hopes of receiving the prize.
How to Identify a Lottery Scam
There are several tell-tale signs of a lottery scam to look out for:
- The letter is addressed to a "reader" or "winner" and does not use your real name.
- The letter contains multiple spelling and grammar mistakes.
- The message has been printed on low-quality paper and uses poorly copied versions of lottery logos. The lottery mentioned may not even exist, and there may be no return address on the letter or envelope.
- The message stresses an "urgent" need to claim the prize and pay a "processing fee" to receive the funds. The victim is then asked to agree to a confidentiality requirement to prevent them from seeking advice from others who may be able to spot the deception.
- Some correspondence may even include a check or a money order. The victim must wire a portion of this check back to the scammer to cover "taxes" or "processing fees." In some instances, the victim only realizes that the check is counterfeit once they have withdrawn the money from their own accounts to cover the "fees."
- Fake lottery notices may look polished and professional, and scammers may use official letterheads without the consent or knowledge of the genuine lottery they are imitating.
Types of Lottery Scams
Lottery scammers have become more innovative and are using technology to defraud victims:
- Social media scams: Scammers message Facebook or other social media users with news that their account has been selected to win a lottery or raffle prize. The victim is directed to a link that encourages them to pay a fee to release the prize. Some scammers message their victims via a chat messaging service to convince them to act quickly and hand over their money to claim their winnings.
- Direct phone scams: Scammers call victims to inform them of a "lottery win" or "massive jackpot prize" offered by a non-existent lottery. The scammer is hoping that the victim will be so overcome with emotion that they will immediately hand over their personal and financial information. Checking the Caller ID can help identify scams, as certain area codes are popular with lottery scammers, such as 876 (Jamaica), 473 (Grenada), and 268 (Antigua), as they resemble U.S. telephone numbers.
- Cell phone scams: A text message is sent to a potential victim informing them that their number has been selected to win a massive jackpot. The message may appear as if it is coming from a popular company, such as Coca-Cola or Verizon. The person is then asked to get in touch with the "lottery" involved to receive their winnings. If the victim responds to the scammer, they will be asked to provide their financial and personal information to receive their "prize." Victims can face hefty fees for calling the scammer's number and can even leave themselves susceptible to phone hacking.
- Email scams: Much like a direct mail scam, a message is sent that tells the victim that they have been selected to win a lottery prize. Unlike direct mail, email scams often look genuine and trustworthy. The email itself may link back to a clone of an official website, which can trick the victim into thinking that the "lottery" is genuine. Some email scammers trap their victims by claiming that they have been selected to win a prize based on a lottery run by the victim's email provider. As usual, the so-called "lottery" doesn't exist, and the victim is tricked into handing over their money.
- Second chance scams: Scammers who use this tactic will trick victims into thinking that they have won a rollover drawing or raffle. They are often based on rollover drawings where no player has won a valid jackpot. The scammer tells the victim that they have been selected to win a "second chance" drawing for a well-known lottery, such as Powerball or Mega Millions. The scammer is hoping that the victim has indeed bought a ticket for a recent drawing and will be swayed by the opportunity to pick up a big prize. In reality, Mega Millions will return any unclaimed jackpot prizes to each state that participates in the game and lets them decide how to use the funds. Powerball has a similar system - if winning numbers are drawn for a jackpot prize and no one steps forward to make a claim, the money simply goes back to the participating states.