Americans Lost $117 Million to Lottery Scammers in 2017

Friday June 15th 2018

Lottery and sweepstakes scams cost Americans $117 million in 2017, a recent study found. The research, conducted by the Better Business Bureau (BBB), found that almost 500,000 people have reported this kind of fraud to enforcement agencies in the US and Canada over the last three years. Last year, 2,820 individuals reported a lottery or sweepstake scam to the BBB’s Scam Tracker, with average losses of $500.

Lottery Scams Are More Prevalent Than Ever

Lottery scams are nothing new, but as technology progresses, scammers are finding more convincing ways of cheating people out of their money. A lot of people share the dream of landing a large sum of money so they can quit their job and live a life of luxury. Lottery scams are so successful because they are designed to take advantage of this desire.

The study by BBB, which can be read in its entirety here, states that lottery fraud was the third-most common type of fraud reported in the US in 2017, but the problem is probably much bigger than this. Previous reports by the Federal Trade Commission (FTC) have found that less than 10 percent of fraud victims actually report it to law enforcement or other agencies, either out of embarrassment or because they believe little can be done about it.

Older people are the most common targets for fraudsters. Last year, 67% of complaints made to the FTC about lottery and sweepstakes scams came from those over 60 years of age, while the same age group accounted for 82% of the money lost. The BBB speculate about why this is the case in their report:

“The fraudsters hope to find victims with mild cognitive impairment, dementia or Alzheimer’s disease. These people often continue sending hundreds of thousands and even millions of dollars to fraudsters. A retired college president sent tens of thousands of dollars to scammers. CNN reported that an older man suffering from Alzheimer’s sent all of his funds to scammers and then committed suicide when the prize money never came.”

A 90-year-old woman from Indianapolis hit the news recently after she lost tens of thousands of dollars to lottery scammers. The unnamed woman started receiving phone calls telling her that she had won a prize in the Mega Millions lottery, and that a payment from her was needed to unlock the funds. Mat O’Dell, a friend of the woman, said: “She's frantic to try to get this $500,000 so she can help-- she wants to help me, she wants to help her family. She wants to help the church. She's a huge-hearted person and that's what they prey on.” O’Dell reported the calls to the authorities but his friend’s phone continues to ring.

Most Calls Originate From Jamaica

A lot of these lottery scams operate out of Jamaica. Many US companies have outsourced their telemarketing to the country in the past, the BBB’s report says, so the facilities and the knowhow to operate telephone scams are already in place. As a particular scam becomes more successful, it grows in size as more fraudsters look to take advantage of it. They are often so lucrative that their operators have enough money to corrupt public officials and avoid prosecution.

The Jamaican area code of 876 is a good giveaway of a lottery scam, although calls can be made to look like they originate from a different location. Las Vegas 702 is a common area code that Jamaican scammers use.

The high level of fraud originating in Jamaica is also having a negative impact on the country itself, as the proceeds from lottery scams are often used to buy guns and drugs. The country has seen a massive rise in violent crime as rival gangs clash, with the murder rate in Jamaica twice that of Chicago and five times higher than New York.

How to Spot a Lottery Scam

There are a few different ways that you can spot a lottery scam, and bearing these in mind will go a long way to protecting you from becoming a victim of one. See our Scams page for more information about how to protect yourself and what to look out for.

You can never win a prize in a lottery if you didn’t buy a ticket

Lottery scams don’t just target people who have played the lottery; they target as many people as possible. If you haven’t bought a ticket for a lottery, there is no way you can win a prize in it. Scammers will often tell you that your name, phone number or email address has been randomly selected as the winner of a raffle or draw associated with a particular lottery. These types of draw do not exist, and if you ever receive a message informing you of a win like this, it is a scam.

You will never be asked to pay a fee to claim a genuine lottery prize

The main goal of all lottery scams is to make money. They may do this directly, by asking for money upfront, or they may be more circumspect in their methods, asking for personal and bank details from you so they can siphon money from your account at their leisure.

If you are ever asked to pay a fee to unlock or claim your lottery winnings, you are the target of a scam. No reputable lottery in the world will ask you to pay to collect your winnings, so if you receive a message requesting that you send money, bank details or even personal details such as your name and address, it is a scam.

Scam messages often use over-technical or official language

Many lottery scams will use lots of technical or official-sounding language in their messages in an effort to appear like they are sent by a genuine lottery provider. Language like “you have won a prize with ticket number 37854-098” and needless reference numbers like “REF/EU/9420X2/2018/CWS” are meaningless, but they are used to assure the recipients of the messages that they have been sent by an official source. If details like these are provided in a message with noticeably poor spelling or grammar, then something is definitely up.

They will also usually make reference to an official that apparently works at the lottery provider, such as a “Claims Officer” or a “Prize Executive,” giving a specific name for you to contact. It is unlikely that a legitimate lottery would give you the personal details of a specific employee as a first point of contact.

The email will be from a provider not associated with the lottery

The email address that a scam message is sent from can give you a good indication of whether it is genuine or not. If it has been sent from a free email provider, such as gmail.com or hotmail.com, it is almost certainly fraudulent. Official messages will originate from an email address associated with the lottery. For example, the website of the UK National Lottery is national-lottery.co.uk, so any emails sent by the lottery will end in @national-lottery.co.uk.

Be sure to check the actual email address of the sender, though, and not just the name in the ‘From’ field. Modern email clients allow you to change your display name, so the name that appears in the ‘To’ and ‘From’ fields can be completely unrelated to the email address that sent the message. For example, a scammer might send an email from a free email account but change the display name so it appears in your inbox as ‘Official Powerball Lottery.’

Telephone scammers will pressure you to act immediately

Lottery scammers don’t want you to think about what you’re doing or what they’re telling you. They want you to act as quickly as possible so that you can’t take the time to spot that they’re trying to cheat you. As it happens, the thought of missing out on a life-changing sum of money is enough to get people to act without hesitation, and scammers will take advantage of this by telling you that a prize is due to expire very soon. They may also say that you mustn’t tell anyone about the win, which should be a major red flag that they are attempting to defraud you.

On a telephone call, scammers can put you under even more pressure, as they can be more insistent than an an email and they can keep calling until you give in to their wishes. The best way to deal with them is to say that you will think about it and get back in touch with them. At this point, many scammers will pile the pressure on, saying that there’s no time for that or you'll lose the money, at which point you can put the phone down. If you have the facilities to block the telephone number from calling you, do it.

All legitimate lottery providers have websites and customer service teams. If you’re still wondering whether you have actually won some money, do a quick web search to find the lottery’s official site and contact its customer service team.

The Golden Rule - Be Skeptical

Treating any unsolicited communication with a touch of skepticism is an effective way of protecting yourself against fraud. Don’t click links or open attachments in emails from anonymous senders, as they may contain viruses that can steal information from your computer. If you’re unsure whether a message is genuine or not, find the official website of the organisation that supposedly contacted you and make an enquiry.

Sadly, lottery scams are not going anywhere soon and as they become more sophisticated they will employ more creative and authoritative methods of stealing people’s money. It is a well-worn cliché, but if something sounds too good to be true, it probably is.

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