Prize & Lottery Scams
Americans lost $12.5 billion to fraud in 2024, according to the FTC.
Quick Answer
Prize and lottery scams trick victims into paying a fee to claim non-existent winnings, ranking as the third most-reported fraud category to the FTC in 2023.
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How It Works
1
You receive an unexpected notification via email, phone call, text message, or mail claiming you have won a large prize, such as a lottery, sweepstakes, or giveaway. The message often uses official-sounding names like the "National Sweepstakes Bureau" to appear legitimate.
2
To claim your prize, the scammer instructs you to first pay a fee. They will claim this fee is for taxes, shipping and handling charges, or processing costs.
3
The scammer pressures you to act quickly and pay the fee using methods that are difficult to trace, such as wire transfers, gift cards, or cryptocurrency. After you send the money, the prize never arrives, and the scammer disappears.
Red Flags
- You are asked to pay a fee to receive your winnings. Legitimate lotteries and sweepstakes do not require you to pay for taxes, shipping, or processing fees to claim a prize.
- You are told you won a contest or lottery you never entered. You cannot win a contest you did not participate in.
- You are pressured to act immediately. Scammers create a false sense of urgency to prevent you from thinking critically or verifying the prize's legitimacy.
- You are asked to provide personal or financial information, such as your bank account number or Social Security number, to claim the prize.
- The notification contains poor grammar, spelling errors, or uses a generic greeting like "Dear Winner."
- The scammer asks you to keep your winnings a secret until the prize is delivered.
- You are sent a check for a large amount and told to deposit it and wire back a portion for fees. The check will later turn out to be fake.
What to Do If Targeted
- Do not send any money or pay any requested fees. Never pay to receive a prize.
- Stop all contact with the scammer immediately. Do not respond to their calls, texts, or emails.
- Never provide your personal or financial information, such as your bank account, credit card, or Social Security number.
- If you received a suspicious notification, independently verify the company's contact information and reach out to them directly to confirm the prize. Do not use the contact details provided in the winning notification.
- If you have already sent money, contact your bank or the financial service you used immediately to report the fraud and attempt to stop the transaction.
- If you shared personal information, visit IdentityTheft.gov for a personalized recovery plan.
How to Report It
- FTC — File a fraud report with the Federal Trade Commission. This helps law enforcement track and stop scammers.
- FBI IC3 — Report internet-based prize and lottery scams to the FBI's Internet Crime Complaint Center (IC3).
- U.S. Postal Inspection Service — If you received the fraudulent prize notification through the U.S. Mail, report it as mail fraud.
- FCC — File a complaint about phone scams, robocalls, or unwanted calls with the Federal Communications Commission.
- AARP Fraud Helpline — Call 877-908-3360 for free support from trained fraud specialists. Available to anyone, not just AARP members.
Key Statistics
- Prizes, sweepstakes, and lotteries was the third most-reported category of fraud to the FTC in 2023. — FTC 2024
- In 2020, combined reports to the FTC and FBI IC3 showed Americans lost over $227 million to sweepstakes, prize, and lottery scams. — BBB 2021
- Victims ages 60 and over reported losing $136 million to Lottery, Sweepstakes, and Inheritance scams in 2025. — FBI IC3 2025 Elder Fraud Report
- In 2017, enforcement agencies in the U.S. and Canada received nearly 150,000 complaints about sweepstakes and lottery fraud, with reported losses totaling $117 million. — BBB 2018
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Frequently Asked Questions
Do not deposit a check from a supposed lottery or sweepstakes company that asks you to wire a portion of the money back for fees. This is a fake check scam. Even if the funds initially appear in your account, the check will eventually bounce, and the bank will require you to repay the full amount.
Yes, legitimate lottery winnings are taxable income. However, these taxes are paid directly to the IRS after you receive your winnings, often with the lottery company withholding a portion. You never have to pay fees or taxes to the lottery company upfront to claim your prize.
A real lottery or sweepstakes will never ask you to pay a fee to collect a prize. Also, you cannot win a contest you did not enter. If you are unsure, contact the lottery or company directly using a phone number or website you know is legitimate, not the contact information from the winning notification.
No, prize and lottery scams affect people of all ages. While data shows that adults over 60 suffer significant financial losses, younger adults are also frequently targeted and report losing money to these scams. Scammers cast a wide net and will target anyone they believe they can deceive.
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