Scam Alert: Sweepstakes and Lottery Scams

by Patty H. LePage

Have you ever gotten a call, email, or postcard saying you won a prize only to find out that it was a scam? You are not alone. According to the Federal Trade Commission (FTC), of all scams reported to the agency, sweepstakes and lottery scams are the third highest reported scam. Since 2013, $110 million has been lost by consumers to this type of fraud.

In early 2018, the FTC in conjunction with the U.S. Department of Justice, took legal action to stop two large sweepstakes scamming operations that were targeting older Americans. One operation used different types of mailers to scam their victims. Some told individuals they had won a large cash prize and only needed to pay a small processing fee in order to receive their winnings. Others prompted consumers to enter a contest by answering a math question and paying an entrance fee. No matter what scamming method these criminals used, the results where the same: people lost their money and did not win the prize.

The FTC successfully shut down this operation and is forcing the organization to forfeit $30 million in cash and assets as restitution. Money obtained from the forfeiture will be redistributed to the victims of this particular sweepstakes scam. This is the largest forfeiture of assets ever obtained by the FTC from sweepstakes scammers. Although the FTC did exemplary work in shutting down these operations, there are still many other sweepstakes and lottery scams still in full operation. 

What can you do to protect yourself and your loved ones from sweepstakes and lottery scams? The most important thing to remember here is the old saying, “if it seems to good to be true, it probably is.” Scammers count on you being willing to spend a little to gain a lot, but a true prize does not come with a request for money. So, keep your money and financial information to yourself. If someone is asking you to wire money or use gift cards to pay them, it is a sure sign of a scam.

If you are one of those people who instantly sees these scams for what they are, then share that information with friends and family, especially older adults. They may receive the same postcard or phone call and if you have prepared them, they can avoid being a victim of this type of scam. Better yet, share this monthly column with anyone you know who may be at risk for becoming a victim of a scammer.

If you or anyone you know has already been the victim of a sweepstakes or lottery scam, it is important to report these predatory criminals to the proper authorities. You should report these criminals even if you did not fall for their plot. This will help authorities to stop these scammers before they can steal someone else’s hard-earned money as well. You can report sweepstake and lottery scams to the FTC at ftc.gov/complaint.

Patty holds a Bachelor of Science from UMUC, a Master of Social Work from the University of Southern California and is pursuing her Doctorate in Business Administration at UMUC. She also holds an executive certificate in the Principles of Leading Transformational Nonprofits from the University of Notre Dame.