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Lottery Fraud: If You Have To Pay, You Didn’t Win
July 16, 2012 Posted by

The following post appears courtesy of the Consumer Protection Branch of the Civil Division.

The pitch is simple.  You receive a call from a foreign lottery announcing that you have won money, a car and other prizes.  The caller tells you that you entered a contest: a form you submitted in the mail, or on the Internet, or while shopping.  You have won, but you must pay taxes, insurance and other up-front fees in order to get your prize into the United States.  Despite several payments totaling thousands of dollars, you never receive the prizes promised to you.

According to the U.S. Postal Inspection Service, Americans have lost $42 million to fraudulent foreign lotteries and sweepstakes.  The majority of victims are elderly.  In addition to losing their life savings, victims are duped into giving fraudsters their Social Security numbers and financial accounts.  Fraudsters convince victims to send money quickly, and they warn victims not to discuss their winnings with family, friends or professional advisors.

The Department of Justice Consumer Protection Branch is working with its investigative partners to prosecute lottery fraudsters.  This effort has identified common signs of lottery fraud that you can use to protect yourself and loved ones.

  • You should not have to pay fees or taxes in advance to receive lottery or sweepstakes winnings.  Beware of checks or wire transfers sent to you by the lottery.  The fraudsters will tell you to cash these payments and forward the money, but after you have sent this money, the payment you originally received will bounce.
  • Lottery fraudsters use technology to mask their telephone number.  Your caller-ID may identify a call as coming from the United States that is actually coming from a foreign country.
  • Lottery fraudsters impersonate officials from federal agencies in order to convince victims that the scam is legitimate.  The United States government does not participate in the distribution of prize money from lotteries and sweepstakes. 
  • You should never give your Social Security number, bank account number or any other personal identifying information to these callers.  Fraudsters promise to use this information to pay the “fees” for your prize, or they offer to pay off your debts.  In reality, they use this information to steal your identity and your money.
  • Lottery fraudsters are particularly successful with victims who live alone or suffer cognitive impairment.  Fraudsters befriend victims to create trust and to convince victims to hide the payments from family members.    

Additional information on this scam is provided by the U.S. Postal Inspection service at www.deliveringtrust.com, and by the Federal Trade Commission at www.ftc.gov/bcp/edu/microsites/phonefraud/sweepstakes.shtml.

POSTED IN: Civil Division  |  PERMALINK
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