Lottery Scams – How Do They Work?

Scammers around the world understand that the offer of large sums of money is too good for some people to pass up. That’s why lottery scams are so successful. Although the details change, the general principle is the same: a person is told they have won a large sum of money in a lottery.

In order to gain access to their winnings they are required to send a relatively small amount to cover taxes, administrative fees or customs charges. As you may guess, there is no lottery, and the scammers repeat the offer to as many people as they can in order to fleece as much as possible.

Lottery scams are conducted in bulk. Thousands of emails, phone calls and letters are sent out every day. The success rate does not have to be very high for scammers to make money. Do everything you can to protect yourself.

Scam delivery methods

Scammers try many different ways to separate people from their money. Lottery scams come in different varieties which can make them difficult to spot. They are an advanced fee scam, similar to Nigerian Prince scams.

Different tactics are used depending on the target of the scam, and the stories often change depending on the method of contact. Remember scammers are often highly skilled amateur psychologists who specialize in creating relationships and winning trust from victims.

Depending on where you are located in the world, you may receive scams claiming you have won a lottery held in various countries of origin – European, Spanish, British, Canadian, Australian and Jamaican mega lotteries or heritage raffles have all made headlines.

Mail

You receive a letter in the mail that claims you’ve won a significant amount of money in a lottery. Often the winnings are from foreign lotteries based in the UK or Europe. The letter may include a check for your supposed winnings.

Instructions will ask you to deposit the check and immediately wire transfer a relatively small fee to an administrator to pay European taxes or fees. Of course, the check is a fake, but victims may not realize this for days until it is rejected by the bank. The victim has plenty of time to send their own money to the scammers before learning the truth.

Other versions of this fraud include prizes of expensive jewelry or even cars from foreign lotteries. Victims are asked to send enough money to cover customs and import duties before the prize can be sent. Others may be asked to pay a special fee to allow a US citizen to claim winnings from a European lottery.

Email

Email lottery scams also send out congratulatory notes that announce your winnings of a lottery or sweepstakes.

Sometimes these try to mimic legitimate American national or state lotteries, and sometimes they try to look like foreign lotteries. As in the case above, victims are asked to wire money ahead of a major prize being deposited.

Email conversations with scammers have a higher risk profile than receiving letters in the mail, as the ability to build relationships online is much faster. Scammers can quickly escalate to asking for personal information like scanned images of a person’s passport or driver’s license to supposedly verify their identity as the winner. In such a case, they steal the victim’s identity as well as their money.

Phone

Scammers love to use the phone to make direct contact with potential victims. Lottery scammers have been known to target lonely or elderly people as they can be vulnerable to this type of manipulation.

The longer a scammer can stay on the line, the more likely the person is to trust them. On the phone, scammers claim to call from customs or the IRS. They describe the winnings held on the victim’s behalf, and once appropriate taxes are paid, they can release the cash prize.

Sometimes the scammers pretend to be lawyers representing the lottery company and arrange for cash to be sent as administration fees. In some cases, Americans are targeted by syndicated gangs of scammers that originate in Jamaica.

Phone lottery scams are sometimes referred to as Jamaican lottery scams because of this. Look out for Caller ID displays that begin with an 876-area code, but be aware that scammers can disguise their area code, too.

SMS – text message

Lottery scammers try every avenue, including text messages. They are often contain vague messages of congratulations, an impressive dollar amount of winnings and a link or email address to contact. Text messages are brief but can be dangerous because those active links and email addresses can make engagement (and entrapment) one click away.

The links can open pathways for malware and spyware to be loaded onto devices, too. Smaller screens on phones and devices can make fraudulent websites more difficult to spot.

In person

Perhaps the most brazen attempt at lottery scam is the in-person attempt. This style of scamming preys on the good will of people.

Vulnerable populations such as the elderly are often targeted. A scammer will pose as an illegal immigrant. They will claim to have a winning lottery ticket, but that only citizens can claim it. If the victim will hand over cash or jewelry as collateral, they are sent to claim the winnings on the scammer’s behalf in exchange for a portion of the winnings.

Sometimes scammers work in teams to provide a willing helper to convince the victim it’s a good idea. Of course, the ticket is not a winner, and the scammers quickly leave with the money or jewelry in hand.

Lottery scam escalation tactics

No matter how you are contacted, scammers have a plan to engage with you and build your trust. Watch out for the following escalation tactics. Scammers will do anything to take more money from victims, especially if they have been successful once already.

If a victim has sent money once, scammers will work hard to convince them to send more. Like other advance fee scams, the story will continue to change as unexpected fees, increased taxes and even bribes are presented as barriers to accessing the lottery winnings. Often significant amounts of money can be lost while chasing the larger amount.

After a time, more elaborate scams will move to a second phase. This often happens when victims begin to resist sending more money. They may receive a call from someone claiming to be from the IRS, the police, or a private investigator. They will announce to the victim that they have been scammed, but the authorities are now on the case. The caller will offer to recover the stolen funds for the victim, if they would just pay a finder’s fee upfront. It’s incredible, but it works.

Some scammers are ambitious and aren’t happy to limit their crimes to cash fraud. They will ask the victim to send through copies of their passport, driver’s license, social security number and other personal details in order to verify their identity as the winner of the lottery. These requests may be presented along with official looking forms to complete. Such information is used for identity theft.

Be aware that some scammers compile databases of scammed individuals. If a person has been defrauded once, other scammers may try to target them with a different story. If you or someone you know has been scammed recently, be very alert to any new offers or contacts.

How to avoid being duped by lottery scams

Scammers like to make their scams cost efficient, and they also make mistakes. These two facts help everyone to identify lottery scam attempts. Here are clues to look out for and questions to ask yourself if you are contacted by someone claiming to have your prize winnings.

  • Did you enter any international lotteries? It’s impossible to enter without purchasing a ticket in person, in the country of the lottery.
  • Are there spelling errors or strange phrases in the letter? Some scams originate in countries where English isn’t a native language.
  • Does your letter have a bulk rate marking on the envelope? Scammers bulk post to save money, but there are never bulk lottery winners.
  • Is the letter or email addressed to you specifically? If there’s no name on it, it’s probably mass-produced.
  • Does the phone call incoming number start with 876? It’s likely a Jamaican lottery scammer.
  • Do they ask you not to tell anyone about the winnings, or to lie about funds being sent?
  • Do they ask you to pay by wire transfer or with iTunes gift cards? These transfer methods are insecure, unofficial and untraceable. No honest organization would use them to charge fees.

No matter how good the story sounds, or how large the sum of money is, do not send money. Do not give your personal information to anyone claiming to be from a lottery commission.

Here’s one last bit of advice: Have you ever bought a real lottery ticket? Did the cashier ever ask for your name or contact details? Most lottery tickets are purchased anonymously. If you did win, how could the lottery administrators contact you? They can’t. That’s why you see news reports about unclaimed lottery prizes. If you are ever contacted about winning a lottery, think very carefully about this point.

Legitimate lotteries exist

Of course, legitimate lotteries do exist. In the USA, official lotteries are conducted in 45 US states along with Puerto Rico, the District of Columbia and the US Virgin Islands. They are managed by each state or jurisdiction.

Some states combine their lotteries to enlarge the purchasing footprint and the potential prize pool. The largest of these function almost as national lotteries, although there are no official lotteries conducted or administered federally. It is illegal to enter a lottery in a foreign country unless you are physically present to purchase the ticket. They may not be bought online.

What to do if you receive a lottery scam attempt

If you get a lottery scam contact, delete or destroy it straight away. Scammers cannot steal from you if they can’t engage with you. Use the appropriate contact details below to report attempted scams.

Have you been scammed?

If you think you or someone you know is a victim of a lottery scam, there are ways you can report it to authorities. It is very unlikely that you will be able to recover any funds sent. Stop sending money as soon as you realize you are being scammed.

Report the crime to https://www.usa.gov/stop-scams-frauds. This website offers specific advice on where to report scam lottery attempts. The reporting mechanism varies depending on which method the scammers used.

Mail fraud: US Postal Inspection Service

Telephone fraud: FCC Consumer Complaints Center

Email fraud: Internet Crime Complaint Center (IC3)

If you think the scam originated outside the United States, report it to the appropriate agency above and also to: ecommerce.gov.

Canada

There are many news reports of Canadians being scammed out of thousands of dollars through lottery scams. If you think you have received a lottery scam attempt, contact the Office of Consumer Affairs. If you have sent money in order to claim lottery winnings, you have been scammed and need to report the crime to your local RCMP detachment. Keep all documentation and communications as evidence to help them locate the scammers or help others avoid the same happening to them.

UK

UK citizens are not immune to lottery scams. If you think you have been scammed, report any financial losses to police immediately. You can also lodge a report with Action Fraud and the National Trading Standards eCrime team.

Australia

If you are in Australia and you have lost money to lottery scams, report the crime to your local police station or call 131 444. Scamwatch is a government organization that offers comprehensive advice for Australian victims of fraud including lottery scams. The information on the Scamwatch page will direct you to reporting resources and how to protect your identity if personal documents were handed over during the scam.

Author: Richard Patterson

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