Think You’ve Won Big? How to Tell if It’s a Scam Before You Lose Money
Editorial Staff
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Learn how to spot common lottery and sweepstakes scams and keep your money safe from fraudsters.
Avoiding Lottery and Sweepstakes Scams: How to Protect Yourself from Fraudulent Winnings
The allure of winning a large lottery prize is undeniable. Many of us have dreamed about what we would do with a sudden windfall—quit our jobs, travel the world, or help others by donating to charities. But what if that dream is used against you?
Lottery and sweepstakes scams are among the most prevalent forms of fraud today. According to the Better Business Bureau (BBB), scammers are exploiting people’s hopes of financial success to steal their money. While the chances of winning a legitimate lottery may already be slim, your odds of being scammed by one are much higher. Here's how these fraudsters operate, and more importantly, how to protect yourself.
1. The “Processing Fee” Scam
In this common scam, the fraudster claims that you’ve won a large sum of money from a lottery or sweepstakes. However, before you can claim your prize, you’re told that you must pay processing fees or taxes. This is a red flag. No legitimate lottery or sweepstakes requires winners to pay fees upfront before receiving their winnings. Once you send the payment, the scammer disappears, and your money is gone.
2. Fake Check or Money Order Scam
Another scam involves the victim receiving a check or money order that’s purported to be a prize. The victim is asked to deposit the check and then send a portion of it back to cover taxes or fees. The catch here is that the check is counterfeit, and by the time it bounces, the victim has already sent money to the scammer. You’re left responsible for the funds withdrawn, which could take weeks to realize.
3. Foreign Lottery Scam
This scam involves an email or letter claiming that you’ve won a foreign lottery with better odds than a traditional lottery. Victims are asked to send money to claim their winnings, but the lottery doesn’t exist. Not only is this fraudulent, but playing a foreign lottery is also illegal.
The common thread in all of these scams is that they require you to send money upfront to claim your prize. This is never the case with legitimate lotteries or sweepstakes. As Shelley Bernhardt, director of consumer protection at Western Union, explains, “Never, ever send money to claim a prize.”
How to Protect Yourself from Lottery and Sweepstakes Scams
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Never Pay to Claim a Prize: Legitimate sweepstakes or lotteries never ask you to pay taxes or fees upfront to claim your prize. Be skeptical if you’re asked to send money to get your winnings.
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Avoid Foreign Lotteries: It’s illegal to play foreign lotteries, and they’re often used as a front for scams. Never engage with them.
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Trust Only Known Contacts: Only send money to individuals or businesses you know and trust. Be cautious of any unsolicited request for money, especially from someone you’ve never met in person.
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Protect Your Personal Information: Never share sensitive personal information, such as banking details, with anyone claiming to offer a prize. Scammers will often ask for this to steal your identity or funds.
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Wait for Checks to Clear: If you receive a check or money order, do not spend the money until the check clears, which can take several weeks. Scammers often use fake checks that can take time to be detected as fraudulent.
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Verify Suspicious Claims: If you suspect you’re dealing with a scam, do your due diligence. Research the company or person contacting you through trusted sources like law enforcement, the BBB, or the Federal Trade Commission (FTC) www.ftc.gov.
Additional Resources for Fraud Prevention
- Western Union’s Fraud Prevention Resources: Learn how to avoid common scams and protect yourself from fraud www.westernunion.com/stopfraud.
- Consumer Federation of America’s Guide to Check Fraud: Discover how to spot check fraud and prevent becoming a victim www.consumerfed.org.
- Better Business Bureau (BBB): Check the legitimacy of businesses or individuals contacting you and learn about ongoing scams www.bbb.org.
The promise of winning a big prize is enticing, but don’t let scammers take advantage of your dreams. By staying vigilant and following these protective tips, you can avoid falling victim to lottery and sweepstakes scams. Always remember: legitimate lotteries never require you to send money upfront. If something sounds too good to be true, it probably is.
