Quick Answer: Lottery scams trick victims by claiming they’ve won prizes but must pay fees, taxes, or provide bank information first. According to the FTC, sweepstakes scams were the third-most common fraud type in 2017, and legitimate lotteries never require upfront payments to claim winnings.
You get a card, call, or email telling you that you won! Maybe it’s a lottery, sweepstakes, or some other prize. The person calling is excited and can’t wait for you to get your winnings.
But here’s what happens next: they tell you there’s a fee, some taxes, or customs duties to pay. They ask for your bank account information, or ask you to send money via a wire transfer or to purchase gift cards and provide the card numbers.
Any way you send it, you lose money instead of winning it. You don’t get a big prize. Instead, you get more requests for money, and more promises that you won big. Scammers can be very convincing, and who wouldn’t want to win big!
Every weekday I read the enforcement actions, filings and fine print the outlets skip, and turn them into the one or two moves that actually improve your position — a rate worth moving for, a fee you can refuse, a deadline to beat before it costs you.
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Lottery and sweepstakes scams are one of the most common consumer frauds operating today. According to the FTC, these scams were the third-most common type of fraud reported to the agency in 2017.
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Earlier this year, the FTC took action against an operation we alleged targeted older people with phony sweepstakes offers. The company sent mailers that made people think they had won $1 million (or more!), and that the recipient only needed to pay a small fee to claim it.
Help us help you and others by using the FTC’s top tips to avoid lottery and sweepstakes scams:
1. Keep your money – and your information – to yourself. Never share your financial information with someone who contacts you and claims to need it. And never wire money to or share gift card numbers with anyone who asks you to. Both payment methods are a sure sign of a scam.
2. Pass this information on to a friend. You probably throw away these kinds of bogus offers or hang up when you get these calls. But you probably know someone who could use a friendly reminder.
3. If you spot a scam, report it to the FTC at ftc.gov/complaint. Your report can help FTC investigators identify the scammers and stop them before they steal someone’s hard-earned money.
This article by the FTC was distributed by the Personal Finance Syndication Network.
The post Winners are Losers in Lottery & Sweepstakes Scams appeared first on Personal Finance Syndication Network.
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