Whether it’s mail, phone or in person, con artists are using the promise of prizes and large cash winnings to steal from honest people. Victims often get an unsolicited phone call, email or letter from someone notifying them that they've won a lot of money or a prize. BBB wants you to be able to recognize red flags of a lottery or sweepstakes scam.
Many times the contest letter or caller will explain that in order to collect the winnings you have to send a small sum of money to pay for processing fees or taxes. Following these instructions, victims wire the money or use a prepaid card, but never get their "winnings."
To avoid falling victim to a lottery or sweepstakes scam, beware of these five red flags:
1. You can't win a contest you didn't enter. You need to buy a ticket or complete an application to participate in a contest or lottery. Whether it’s by phone or mail, scammers seek out their targets. Verify that it is a legitimate business by doing research on the company.
2. You are offered ‘too-good-to-be-true’ prizes. It is almost always a large sum of money, but there is always a catch. Scammers attempt to make it sound easy to claim your prize. The reality is it is very unlikely that someone will give away large sums of money with no strings attached.
3. You have to give personal information. Anytime someone tries to get your bank account number, Social Security Number or other sensitive information, that should be an automatic red flag. There is also no need to access financial information, like a credit card number in response to a sweepstakes promotion.
4. You have to pay to win. Don't be blinded by the promise of a large sum of money in the future. If they are asking you to give them money first, that’s a red flag. According to Federal Trade Commission, It’s illegal to ask you to pay or buy something to enter or increase your odds of winning. Legitimate prizes do not come with processing fees, and taxes are paid directly to the Internal Revenue Service after winnings are collected.
5. You have to wire money or use prepaid debit cards. If you are asked to use these transfer methods in order to get a prize or any other large sum of money, that is a major red flag. It’s difficult to track these types of transactions, so you will have little to no way of getting your money back
For 100 years, the Better Business Bureau has been helping consumers find businesses, brands and charities they can trust. In 2012, consumers turned to BBB more than 100 million times for Business Reviews on more than 4 million companies and Charity Reports on 11,000 charities, all available for free at www.bbb.org. The Council of Better Business Bureaus is the umbrella organization for 114 local, independent BBB's across the United States and Canada, as well as home to its national programs on dispute resolution and industry self-regulation.
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