BBB Tip: Sweepstakes, Lottery, and Prize Scams

  
     
If you've won a prize in a sweepstakes, lottery or other contest you don't remember entering, it's probably a scam!

money in a bowYou’ve won a new car or a dream vacation or cash—in a contest you never entered! This sounds too good to be true because it’s a scam. This con fools you into thinking you’ve won a prize or lottery jackpot, but you need to pay upfront fees to receive it. No matter how much you shell out, the winnings never materialize.

How the Scam Works:

You receive an email or phone call allegedly from a contest organizer informing you that you’ve won a prize. To claim your winnings, you need to first pay taxes, shipping costs, or other fees. You are urged to send the money by wire transfer, or buy a prepaid debit card and share the number and PIN with the "contest organizer."

In another version, you receive a letter informing you you’ve won a jackpot, often from a foreign lottery (it is illegal in the U.S. and Canada to enter a foreign lottery by phone or mail). The letter includes a seal or other insignia to make it look authentic. There is even a check to cover the taxes on the winnings. You are instructed to deposit the check into your bank account and wire or use a prepaid debit card to send the "taxes" to a third party. The check is a fake and you are out the money.

Tips to Spot This Scam:

  • Don't pay upfront fees to claim a prize. No legitimate sweepstakes company will ever ask you to pay a fee or buy something to enter or improve your chances of winning — that includes paying "taxes," "shipping and handling charges," or “processing fees” to get your prize. 

  • Be aware that a check can bounce even after your bank allows you to withdraw cash from the deposit. Check processing is a confusing business, as is the terminology. Even if a bank representative tells you that a check has “cleared” you can’t be sure it won’t be detected as a fake weeks later. One thing you can be sure of is that you will be on the hook for any funds drawn against the amount. 

  • You’ve got to play to win. A notification that you have won a prize in a contest you do not remember entering should be a red flag. If you do regularly enter contests or sweepstakes, make sure you keep track of your entries so you can easily check to see if you have actually entered a contest that contacts you. 

  • Be suspicious of irregular communication. Real sweepstakes will not notify you via text or bulk mail. They will not send a check in the mail without first confirming with you. And you won’t be notified that you are a winner and have to respond or act within 24 hours to collect your prize.

 

To report a scam, go to BBB Scam Tracker.

To learn how to protect yourself, go to “10 Steps to Avoid Scams”.

Last Reviewed:  March 3, 2017