Sweepstakes and Lottery Scams

More than 400 New Yorkers have fallen victim to sweepstakes and lottery scams in the past seven months with losses ranging from a few hundred dollars to more than $35,000, according to an analysis by the New York State Consumer Protection Board.

While elderly people lost the most money, lottery scams also tricked younger people into believing they had won a large cash prize from a foreign lottery or sweepstakes.

In each case, the victims sent money usually to Canada -- thinking they had to pay insurance or taxes before they could collect these bogus prizes.

"No legitimate contest makes you pay a fee to collect a prize," said CPB Chairperson and Executive Director Teresa A. Santiago. "For many of the elderly victims, the scam artists made multiple demands for cash, falsely claiming that more money was needed in order to pay for 'taxes' or insurance."

Sons and daughters have filed complaints after failing to convince their elderly parent that there was no prize.

"You can't win a contest that you didn't enter. But it's hard to convince someone that they are the victim of a scam, especially when the con artists have made numerous phone calls and formed a bond with the victim," Santiago said.

"Elderly victims will receive phone call after phone call or multiple letters and emails, each promising that the large cash prize will soon be delivered," said Santiago. "But there's always another delay and always a demand for another payment."

Another common scam involves the mailing of a bogus check.

The recipient is told to deposit the check in their bank and then wire a smaller amount back to the scam artists. Several days later, the bogus check bounces and the victim's money is gone.

Once someone loses money in a lottery scam, their name, address, phone numbers and other personal information are sold, leaving these consumers vulnerable to another scam.

Many people, especially senior citizens, have been victimized by more than one sweepstakes scam, according to the CPB.

"The only way you can win with these phony contests is to not respond to them," Santiago said.

The letter says the recipient has won $35,000 in an international promotion program. It indicates that a check will be mailed to the winner from a North American Payment Center upon payment of a "release fee" and applicable taxes.

A contact name and phone number is provided to assist with verification, processing and payment.

"Phone numbers often go back to people involved with the scam, and they will indicate that your winning notification is legitimate," the company said in a fraud alert posted on its Website.

Atlantic Lottery says that to win any of its cash prizes, you must have purchased a ticket from an authorized retailer in New Brunswick, Nova Scotia, Prince Edward Island or Newfoundland and Labrador, or on their PlaySphere website. The company said it is not authorized to operate lotteries or games of chance outside of Canada.

December 1, 2003
The Federal Trade Commission is urging consumers to beware of a foreign lottery scam that adopts the name of Spains largest lottery prize, El Gordo, to con consumers out of substantial sums of money.

According to the Spanish government, consumers in the United States may receive phony letters, as well as forged materials purporting to be from Spanish banks, that claim that these consumers have been the lucky winners of a large cash prize. To claim the prize, the consumer is told he or she must pay a sum that goes toward the taxes, bank costs, and processing fees necessary to deliver the prize money.

The real drawing for the El Gordo prize takes place during the holiday season. The Spanish government indicates that the fraudsters who carry out the phony drawing use the actual addresses of official Spanish organizations to make their scam appear legitimate.

If you receive a letter this holiday season claiming you have won a big prize in a foreign lottery, do not pay any money it is a scam. The FTC reminds U.S. consumers that participating in a foreign lottery is illegal.

Points to remember:

• If you play a foreign lottery through the mail or over the telephone youre violating federal law.
• There are no secret systems for winning foreign lotteries. Your chances of winning more than the cost of your tickets are slim to none.
• If you purchase one foreign lottery ticket, expect many more bogus offers for lottery or investment opportunities. Your name will be placed on sucker lists that fraudulent telemarketers buy and sell.
• Keep your credit card and bank account numbers to yourself. Scam artists often ask for them during an unsolicited sales pitch.

The FTC encourages consumers to give any suspicious lottery material from a foreign country to a local postmaster. You can also report it to the FTC at www.ftc.gov or 1-877-FTC-HELP, or contact your state Attorney General.