Arlington, VA, September 7, 2005 – The Better Business Bureau system today issued an alert cautioning consumers and businesses about a surge in fraudulent cross-border lottery notifications that involve fraudulent counterfeit checks.
Consumers across the country are contacting Better Business Bureaus in the U.S. and Canada to ask about the legitimacy of notices they received by mail and spam e-mail announcing that they have won substantial sums of money in a Canadian or other foreign lottery. Consumers were given a telephone number to call and then instructed to cash certified checks in amounts ranging from $2,000 to $9,000 in order to collect their "entire award package." They were then instructed to wire the money or send their own check back to the lottery company to cover fees or taxes. The names and bank account numbers of reputable and valid U.S. businesses appear on the certified checks. The companies have advised the BBB that they are victims of identity theft and that their names and account numbers are being used fraudulently in the lottery promotions.
The BBB in Huntsville, Alabama recently issued an alert regarding DE-LOTTO TRUST GROUP, INC. of Toronto, Canada for the DE-LOTTO AUSTRALIAN SWEEPSTAKES. The Bureau received inquires from consumers in Alabama, Arizona, California, Georgia and Ohio regarding this "sweepstakes." The notification letters state that the recipient is one of the declared winners of a drawing. A check, in varying amounts ranging from $3,500 to $8,950 and made payable to the recipient from an account for Apel Machine and Supply of Cullman, Alabama, was enclosed with the notification letter. Consumers who contacted the BBB reported that they were instructed by DE-LOTTO Trust Group, Inc. representatives to cash the check and wire funds back to DE-LOTTO in order to pay the government taxes for the winnings. The Bureau reported that some consumers did cash the check, but were notified later by their bank that the check was counterfeit and they were liable for the funds they withdrew. The Bureau has confirmed that Apel Machine and Supply, a distributor of mill and plumbing supplies, had no connection to DE-LOTTO TRUST GROUP, INC. or any lottery-related company.
The BBB in Boise, Idaho has received inquiries from consumers regarding Camden Marketing, Inc. out of Cooksville, Ontario, Canada. The company is telling consumers that they are the winner of a lottery worth thousands of dollars. The check enclosed with their notification letter displays the address of a major corporation located in Boise and appeared to be a legitimate check, according to the Bureau.
The BBB in Dallas, Texas reports receiving inquiries from consumers in Florida and Georgia regarding International Lottery Incorporated, located in Brampton, Ontario and a Golden Investment Trust out of Concord, Ontario. The Bureau received two checks from the supposed "lottery winners." The name of Michael Stores, an arts and craft store chain based in Dallas, was misused on the counterfeit checks. Both of these consumers recognized the scam and did not deposit the checks.
The name of a video production company in Dallas was used on a letter and check sent to a New Hampshire woman, who reported the scam to the BBB in Dallas. "This is to inform you of the release of the final quarter of the Carnival Gaming Lottery, Inc.," the letter said. "...we have enclosed a cheque for the amount of $3,850 to help you cover the legal fees in your winnings..." The Dallas company reports having received numerous inquiries from across the country about the letters and phony checks.
The BBB in Spokane, Washington has received a high volume of inquiries from consumers concerning a company located in Manitoba, Canada. The names of two companies located in Texas and Minnesota were used on the counterfeit checks. The Bureau contacted the companies to inform them that their names were being used in a fraudulent foreign lottery scam. The companies stated that they had no idea how their information was compromised.
The BBB of Vancouver Island, Canada reported receiving numerous calls from U.S. citizens checking on the legitimacy of a company called Hartland Payment Systems, located at 525 Simcoe Street, Victoria, BC. Consumers are telling the BBB that they received a check for $3,960. Hartland asked them to cash the check and return to the company $3,700 for the processing fees towards their grand prize. Hartland said they would then forward to the "lottery winner" their grand prize of $49,380. The BBB investigated the company’s location and found a mailbox service. The BBB has forwarded the information to PhoneBusters.
"While most of these lottery notification letters deservedly end up in the trash, there appears to be an increase in the number of people who are taking them seriously, said Ken Hunter, president and CEO of the Council of Better Business Bureaus. "People need to realize the danger in responding to unofficial lottery-related solicitations. If they cash the counterfeit checks, they can end up liable for any funds they spend while waiting for the funds to clear. Even if no money is transferred to these organizations, simply providing an ID or bank account details to an unknown party makes consumers vulnerable to identity theft and fraudulent use of their bank account," he added.
The BBB cautions consumers not to allow enticing dollar signs to obstruct common sense. If you are being directed to wire money, send a check, provide access to your bank account or credit card numbers or forward personal financial information in order to claim your winnings, contact your BBB. This is an attempt to steal your money or identity, by a person masquerading as a lottery official.
If you have won a legitimate, legal lottery, you do not have to pay taxes, custom fees, shipping or handling or any other fee before receiving your winnings. In addition, it is illegal to participate in a foreign lottery through U.S. mail.
"Businesses – large and small – should take every precaution to make sure their company data is protected," said Hunter. "Identity theft can be committed by a dishonest employee, through careless disposal of vital information or unprotected computers."
"Lottery winners" and businesses who believe their banking account data is being misused in a cross-border lottery scheme should report the incident to PhoneBusters at 1.888.495.8501 or send information to: PhoneBusters, Box 686, North Bay, Ontario P1B 8J8. PhoneBusters, run by Royal Canadian Mounted Police and Ontario Provincial Police, provides a central complaint database for law enforcement. They also liaise with the U.S. Postal Service, the FBI, U.S. Customs, Federal Trade Commission and state attorneys general offices.