Five Red Flags to Help You Spot a Lottery or Sweepstakes Scam

July 07, 2014

Whether it is 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. Better Business Bureau 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 sum of money to pay for processing fees or taxes. Following these instructions, victims wire the money or use a prepaid money card, but never get their "winnings."

“BBB receives calls every week from consumers who believe they have won the lottery or a sweepstakes. Unfortunately, these scams leave many people losing their hard earned money rather than hitting the jackpot.”

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.
  2. You are offered ‘too-good-to-be-true’ prizes. It is almost always a large sum of money, and sometimes even a brand new car added on 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.
  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. 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 purchase Green Dot Money Cards or wire transfer funds.  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.