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.
Before we begin, you may want to spend a moment looking at
this week’s most popular articles from our other sites:
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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
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
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
(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
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
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
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
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!