Lottery fraud

Good news! You receive notice that you’ve won a random drawing based on your email address or social media account. To collect, all you have to do is pay the taxes, or the insurance, or the shipping and handling fee, or, well, it doesn’t matter what the fee is called, you have to pay it if you want the bigger prize.

It works like this

A lottery scam is a kind of advance fee fraud. It begins when you receive notification that you’ve won a lot of money or a valuable prize in a lottery you never purchased, or a contest you’ve never entered. The notification might come by mail, email, text, phone call or social media message – any method other than in person. To collect your winnings, you have to pay something first, provide some personal information or both. It may be one large payment or multiple smaller payments. The scammer will continue to stall as long as you’re willing to pay these fictitious fees or surrender your information.

The warning signs

You know that saying: You can’t win if you don’t play? The reverse is also true: If you didn’t enter, you didn’t win.

Lottery scams often use the names of actual overseas lotteries, so if you look them up they look legitimate, but don’t be fooled. The scammer will pressure you to keep your winnings a secret. They’ll insist you pay your fees by wire. Sometimes they’ll actually send you a check as partial payment of your winnings to overcome any hesitation on your part. It will bounce.

In the end, the scammer will disappear taking any money you’ve sent, or information you’ve provided. You have a better chance of actually winning the lottery than of finding the scammer and getting your money back.

Back to financial education resources