By Randy Hutchinson
President of the BBB
Reprinted from The Commercial Appeal
I occasionally buy Tennessee Lottery tickets and, every once in a while, win a few dollars or a free ticket. I suspect most people’s experience is like mine, so it never ceases to amaze me that people really believe they won a huge sum of money in a lottery or sweepstakes they never even entered. But they do and collectively lose hundreds of millions of dollars in the process.
A Colorado man pleaded guilty in April to defrauding thousands of consumers out of more than $15 million. He and co-conspirators mailed millions of fraudulent prize notices telling people they had won large sums of money. All they had to do to receive their winnings was pay a fee of $20 to $50. There were no large cash prizes and all the victims received was a report describing sweepstakes opportunities or a trinket of minimal value.
In June, the FTC reached a settlement with three men who operated a phony sweepstakes scam that took in over $28 million from consumers in the U.S., Austria, Canada, France and other countries. Victims were told they had won more than $2 million but would forfeit their prize if they didn’t pay $20 to $30 within ten days.
The wheels of justice sometimes grind slowly. These sweepstakes scams were shut down years ago, but people are still being victimized. Earlier this year, a 73-year-old Michigan woman got a call from a crook posing as an FTC attorney telling her she had won $3.5 million, a car, and $7,000 a week for life from Publishers Clearing House (PCH). Over a period of several months, she sent multiple cashier’s checks and deposited money into Bitcoin ATMs to claim her prize. She didn’t realize it was a scam until she told a friend about it and the friend delivered the bad news. She lost $669,500.
Many sweepstakes scams that impersonate PCH are successful because victims don’t know that you have to actually enter the PCH sweepstakes and winners are notified in person by the PCH Prize Patrol. PCH doesn’t call, email, or text winners and doesn’t send checks to be deposited and used to pay a fee or tax on winnings. After victims deposit the check and wire the money, the checks bounce and they’re out the money.
Many people also fall victim to foreign lottery scams. A Maryland man received a letter telling him he’d won $6.8 million in the Australian lottery. He contacted a “claims agent” as instructed and was told to wire $1,500 to England to pay insurance on the winnings so the money could be released. He wired the funds, but realized he’d been scammed when he was told he needed to wire another $1,500 to get his money. It’s illegal for U.S. citizens to play a foreign lottery.
The BBB offers this advice to avoid becoming the victim of a sweepstakes or lottery scam:
· Remember, you have to play to win.
· Never pay upfront fees to claim your prizes. No legitimate sweepstakes company will ask you to pay fees to receive your prizes.
· Don’t get caught up in the excitement. Crooks don’t want you to have time to evaluate what’s really happening.
· Being told that paying will increase your odds of winning is illegal.