Americans Lose $120 Million a Year to Lottery Scams

Wednesday September 3rd 2014

The US Postal Inspection Service estimates that American consumers lose up to $120 million in foreign lottery scams every year. Perpetrators of these scams use phones, email, text messages or direct mail to contact victims, luring them into their trap with enticing stories of huge lottery wins in Europe or Australia.

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The unsuspecting target is informed that they have won a huge prize in a jackpot but and that they need to pay various processing fees prior to the funds being released. The sums requested will initially be quite small and, if paid, the fraudster will keep going back to demand bigger and bigger fees or taxes before ‘releasing the prize’. Victims who fall into the scammers trap will often hand over personal information, bank account details and a copies of ID - everything required to steal someone’s identity - as well as the cash demanded. Of course, there is no prize and, not only is the victim worse off financially, but they may have put their finances in further jeopardy by providing the scammer with so much information.

One victim of such a hustle was 69-year-old Florida woman Joan Anderson, who was informed that she had won a lottery jackpot worth $2.5 million but was asked to wire amounts totalling $73,000 before she could collect her prize. She sent 13 payments to Sri Lanka, which were requested by a man who claimed to be a federal agent, but no prize ever appeared. Another person taken for a ride by lottery scammers was Atlanta resident Karen Hendricks, who was encouraged to sell jewelry or even take out a loan to cover the taxes from her $5 million “win”.

The Federal Trade Commission (FTC) has issued advice for the thousands of Americans every year who fall victim to these scams. They remind consumers that if they receive what looks like a foreign lottery solicitation, they should hand it back to their local postmaster immediately. Potential targets are warned that by responding in any way to these scammers, they are opening themselves up to receiving countless more similar solicitations. The FTC also insist that under no circumstances should bank account or credit card details be shared during an unsolicited pitch. would like to remind readers that the only way to win a lottery prize is to a buy a lottery ticket. You will never have to pay “fees” to an official lottery and any tax due will only be after you have received your winnings and will only ever be paid to the IRS. To avoid becoming a victim, immediately discard any ‘notification’ that you receive about winning a prize for a lottery you haven’t entered and do not, under any circumstances, make contact with the scammers. For more information about the different types of scams in operation, visit our Lottery Scams page.

If you think you may have fallen victim to one of these scams, you should file a complaint with the FTC.

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