Better Business Bureau (BBB) has warned consumers of too-good-to-be-true sweepstakes and lottery scams for decades; however, consumers continue to fall for false claims of riches and end up losing thousands of dollars in the process. Recently, a woman in Mesa, Arizona received a letter claiming she was the winner of a $3 million foreign lottery from the UK, urging her to cash the enclosed $3,835 check and wire it back to pay government taxes in order to expedite processing of her winnings. While in need, tempted, excited, and hopeful, the woman avoided the lottery scam by calling BBB.
According to the United States Postal Inspection Service (USPIS), “sending lottery material through mail is prohibited by federal law.” In addition, the Federal Trade Commission (FTC) states that “if you play a foreign lottery - through mail or over the telephone - you are violating federal law.” Considering the legalities of foreign lotteries, why do so many people continue to fall for foreign lottery scams?
BBB shares four reasons why foreign lottery scams are so successful, as outlined by the Maryland Attorney General’s Office:
Promises of big prizes are hard to resist. It’s hard not to be curious and excited when someone says you’ve won a very large sum of money. Even though you might not remember entering such lottery, you think that perhaps you did and forgot about it, or perhaps the letter says your name was entered in the lottery as part of a “promotion.”
Notifications look very official. The award notifications often look very impressive and include fancy letterhead and specific details about the date of the lottery, the number of the winning lottery ticket, the name of the “claim agent,” and special identification numbers to make your claim. The notifications also include information about taxes, insurance and other things that sound like important legal information that must be told to a million-dollar lottery winner.
Checks are included to pay for taxes. Along with the notification letter, a check or money order is usually enclosed to pay for taxes. You are instructed to deposit the check and then write a personal check from your account - or purchase a money order - to pay for the taxes. After paying the taxes, the winnings will be sent to you. Unfortunately, the check or money order enclosed turns out to be fake and bounces after you’ve sent your personal check to the con artists.
Winners keep the winnings a secret. As part of the lottery’s “security protocol,” you are instructed to keep the notification a secret. Scammers use this tactic to ensure you don’t talk to other people and find out it is all a scam. A deadline is usually included in the notification, urging you to act fast and avoid researching the scam.
About BBB of Central, Northern & Western Arizona
BBB is an unbiased organization that sets and upholds high standards for fair and honest business behavior. In 2013, people turned to BBB more than 132 million times for BBB Business Reviews® on more than 4.5 million businesses and BBB Wise Giving ReportsTM on 11,000 charities, all available free at bbb.org. Incorporated locally in 1938, today your BBB serves communities in central, northern and western Arizona, supported by over 10,900 BBB Accredited Businesses. Businesses that earn BBB Accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. BBB provides objective advice, free business reviews and charity reports, and educational information on topics affecting marketplace trust.