Help yourself and others to avoid a lottery scam: Internet Scambusters #511
The lottery scam in which people are tricked into paying money to supposedly collect non-existent prize winnings is costing Americans hundreds of millions of dollars a year.
Yet, by following one simply rule you can never be caught out by these crooks.
We give you that vital piece of information in this week's issue, along with an update on the latest tricks the scammers use to try to convince victims their win is genuine.
Now, here we go...
One Simple Rule to Avoid a Lottery Scam
It's been in our Top 10 Scams list for years and, as we reported a few weeks back in National Consumers League Targets Telemarketers and Online Scams, the lottery scam was just named number one in the complaints chart compiled by the National Consumers League.
It's remarkable that after all the publicity this crime has received -- we've featured it at least 20 times in Scambusters issues and the media are full of reports of lottery fraud victims every week -- people continue to be duped.
So this week, we're making a stronger than ever plea to pass on this issue -- either by forwarding it directly if you're a newsletter subscriber or via a web page link -- to the people you care about to try to spread the word, but of course, please do not spam.
Often the victims are seniors, in some cases older folk who just won't accept concerned advice from friends and relatives that it's a con trick.
In some tragic cases, people have been known to lose their entire life-savings of hundreds of thousands of dollars to the lottery scam artists.
In fact, the crime, which we'll talk about in more detail in a moment, is causing so much concern that even the money-wiring companies that play an unwilling part in transferring victims' money to the crooks, are trying to halt the cash flow.
A couple of months ago, one of these agencies actually imposed a limit of just a few hundred dollars on the amount of money that could be sent in a single transaction to part of Jamaica, which is the lottery scam capital of the world.
And in May this year, Jamaican police charged eight people with defrauding US citizens and seized $150,000 cash and a stable of luxury cars, TVs and electronics goods.
Authorities reckon Jamaican crooks are taking around $300 million a year from US victims -- 10 times the figure of just a couple years ago.
Peru has recently been identified as a new lottery scam hotspot, by the way.
The main reason the lottery scam has been so successful is down to basic human nature. Sadly most people just want to believe they won -- because they want the money.
Furthermore, though many people would like to claim otherwise, they are, in a word, gullible. And since the lottery scam crooks are good at continuously inventing new versions of the "You've won a fortune" story, they have tapped into a rich seam of potential victims.
For example, this year there has been a sudden surge in bogus winner notifications purporting to come from the perfectly legitimate Publishers Clearing House.
This is particularly effective because a) Publishers Clearing House (PCH) is a very well-known direct marketing organization that uses prize draws for promotions, and b) in the past, you didn't always need to formally enter the draw to become a prize winner.
This last point is particularly important because we and many other anti-scam organizations are always advising people that you can't win a lottery you didn't enter.
But, with PCH you could. As part of their promotions, PCH used to allocate a lottery number in a mail-out (not email), which you could return, with or without buying the item they were promoting, to see if you won.
But there's one simple way of spotting the difference between a genuine PCH winner notification and a lottery fraud: With the genuine PCH item, you never have to pay to collect your winnings, whereas asking for money upfront is the key component of a lottery scam.
In fact, that simple rule applies to all legitimate lotteries and prize draws. Pin it on your wall and you'll never get caught out.
(If tax is due on your prize, it's usually deducted from your winnings before they're handed over. If not, you pay after you've collected, not out of your own pocket.)
The scam itself works like this: You either receive a phony check (usually for an odd sum of money, like $3,997.42) and have to wire part of it back in cash to the bogus lottery organizers (before the check is declared a dud), or you have to pay some trumped-up fees for handling or taxes before you can collect your (non-existent) winnings.
Once you pay, the crooks just keep asking for more and more money, inventing all sorts of reasons why the cash prize supposedly can't be released.
You can read more about the lottery scam in two of our earlier issues:
And the Federal Trade Commission (FTC) also provides guidance.
As for Publishers Clearing House, the organization is alarmed about the way its name is being used and abused by lottery scam crooks. The company has set up an anti-scam tips page and a fraud protection video.
If you have any doubts or concerns, you can also call them at 1-800-392-4190, or email firstname.lastname@example.org.
Of course, the bogus Publishers Clearing House lottery scam is just one example of this cruel con trick.
Other recent ways the crooks try to convince victims of their authenticity include:
- Posing as FBI or local police officers, or even the FTC, in a phone call to reassure victims the win is genuine. Sometimes the call is made before the actual "notification."Action: None of these organizations ever make such calls.
- Spoofing the names and phone numbers of legitimate organizations, which show up on caller ID, fooling victims into thinking they're genuine.Action: Never take caller ID as proof of who is really calling. It's easy to fake.
- Using reassuringly serious-sounding names that include words like "Guaranty Trust," or imply they are connected with a government department.Action: Check the organization on the Internet, with the name followed by the word "scam."
- Posing as an organization that distributes unclaimed winnings. A recent example: "Golden Gateway Financial, Division of Unclaimed Funds."Action: There are no organizations in the US who distribute unclaimed winnings.
Recently, the FTC mailed refund checks totaling $183,000 to victims of a lottery scam who had been fooled into paying a fee by a company that mailed out hundreds of thousands of winner notifications, some with fictitious government agency names and seals.
Those who got their money back were the lucky few. Most lottery scam victims never see their money again. Make sure you're not one of them -- and, please, pass it on.
That's it for today -- we hope you enjoy your week!