Prize & Lottery Scams: Fake Winnings That Cost You
What is this scam?
Prize and lottery scams are fraudulent schemes where scammers convince victims they've won a large sum of money or an extravagant prize. However, the catch is that victims must pay a fee or provide personal information before claiming their winnings. According to the Federal Trade Commission (FTC), older Americans lose millions each year to these types of scams. The FBI's Internet Crime Complaint Center (IC3) reported over 7,000 complaints in 2021 alone, with losses exceeding $65 million. These scams can devastate a victim’s financial security and erode their trust in others.
How the scam works
Real examples
Evelyn received an email stating she won $1 million from a lottery, even though she never entered. The sender requested her bank details for tax and insurance fees before sending the winnings.
David got a phone call telling him he was selected as one of five winners to receive a luxury car valued at $50,000. To claim his prize, David needed to wire money for shipping costs.
Red flags to watch for
- Unsolicited contact claiming you've won something.
- Requests for upfront fees or taxes before receiving winnings.
- Pressure to act quickly to claim the prize.
- Requests for personal information like social security numbers or bank details.
- Promises of large sums of money from lotteries or contests not entered.
Victim recovery plan
- 🚨 Contact your bank or financial institution to report unauthorized transactions and request a fraud alert on your accounts.
- 🚨 If you sent money via gift cards, contact the company immediately (e.g., Walmart for MoneyPaks) to inform them of the fraudulent transaction; they may offer guidance on how to proceed with recovery efforts.
- 🚨 Change passwords for any online accounts that you think might have been compromised during the scam, especially financial and email accounts.
- 🚨 Notify your credit card issuer if you provided credit card information as part of the prize or lottery process.
- 📝 Report to FTC at reportfraud.ftc.gov to document the scam and possibly assist in larger investigations.
- 📝 File with FBI IC3 at ic3.gov for additional reporting, especially if there are international elements involved.
- 📝 Contact local police for a report number; this can be helpful when dealing with financial institutions or insurance claims.
- 📝 File with your state Attorney General to inform them of the scam and possibly join any ongoing investigations.
- 💳 Dispute unauthorized charges with your credit card company; provide documentation of all transactions related to the scam.
- 💳 Freeze credit at all 3 bureaus (Equifax: equifax.com/personal/credit-report-services, Experian: experian.com/freeze, TransUnion: transunion.com/credit-freeze) to prevent any further fraudulent activity.
- 💳 Consider setting up fraud alerts with your bank and financial institutions; this can help monitor for unusual activity.
- 🔒 If you shared sensitive information like Social Security number, dates of birth, or addresses during the scam, immediately contact the three major credit bureaus to place a fraud alert on your report.
- 🔒 Check for any new accounts opened in your name by requesting free credit reports from annualcreditreport.com.
- 💛 These scammers are professionals who manipulate thousands of people; you are not alone, and it is common to feel a sense of betrayal or shame.
- 💛 Talk to someone you trust about what happened; sharing your experience can be healing and help you process the emotional impact of the scam.
- 💛 Contact the AARP Fraud Watch helpline at 877-908-3360 for free support and guidance on how to recover from a lottery or prize scam.
- 📋 Monitor credit reports weekly at annualcreditreport.com for any new fraudulent activity.
- 📋 Watch for follow-up scams targeting previous victims, such as calls asking for more money to unlock a prize or additional documents required for verification.
- 📋 Continue to change passwords on a regular basis and enable two-factor authentication wherever possible.
How scammers find you
- Emails purporting to be from lotteries or prize agencies.
- Phone calls with automated messages claiming a prize has been won.
- Text messages directing recipients to fake websites for more information.
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