The thought of winning a lottery or sweepstakes is pretty exciting. Who couldn’t use a influx of cash in these tough times? Unfortunately, there are a lot of con artists who try to separate you from your hard-earned money with the promise of a big prize.
Case in point: Georgia resident Dominic Smith, 26, recently pleaded guilty to conspiracy to commit wire fraud for his role in a lottery scam based in Jamaica. He was just one fish in a big sea full of crooked fishes.
There’s always a chance you will get a phone call from someone claiming you’ve just won a lot of money–someone who actually wants to trick you into paying them a lot of money for nothing.
BBB serving Central, Coastal, Southwest Texas and the Permian Basin gets numerous calls from people asking about fraudulent lottery offers. Some are too late–they already wired advance payments and got ripped off. Here are five red flags of a lottery scam, so that doesn’t happen to you:
- You’re told you’ve won a contest you didn’t enter. You need to buy a ticket or complete an application to participate in a contest or lottery. Whether it’s by phone or mail, scammers seek out their targets. Verify that it is a legitimate business by doing research on the company.
- You are offered ‘too-good-to-be-true’ prizes. It is almost always a large sum of money, but there is always a catch. Scammers attempt to make it sound easy to claim your prize. The reality is it is very unlikely that someone will give away large sums of money with no strings attached.
- You have to give personal information. Anytime someone tries to get your bank account number, Social Security Number or other sensitive information, that should be an automatic red flag. There is also no need to access financial information, like a credit card number in response to a sweepstakes promotion.
- You have to pay to win. Don’t be blinded by the promise of a large sum of money in the future. If they are asking you to give them money first, that’s a red flag. According to the Federal Trade Commission, It’s illegal to ask you to pay or buy something to enter or increase your odds of winning. Legitimate prizes do not come with processing fees, and taxes are paid directly to the Internal Revenue Service after winnings are collected.
- You have to wire money or use prepaid debit cards. If you are asked to use these transfer methods in order to get a prize or any other large sum of money, that is a major red flag. It’s difficult to track these types of transactions, so you will have little to no way of getting your money back.
Below is a video reenactment of a typical sweepstakes scam scenario, courtesy of BBB Serving Nebraska, South Dakota, The Kansas Plains & SW Iowa: