How to Recognize & Avoid: Fake Lotteries & Scams

1. What Are Lottery Scams?
2. Red Flags of Lottery Scams
3. Most Common Lottery Scams
4. How to Beat Lottery Scams
5. Fallen Victim to a Lottery Scam?

Lottery scams result in millions of Americans getting tricked by fraudsters seeking to take advantage of unsuspecting victims with promises of large cash prizes, goods, or services.

In a 2021 Better Business Bureau report, data showed that Americans lost around $227 million to fake sweepstakes, prize, and lottery scams. Typically, older adults (over the age of 55) are the primary targets for these types of scams, but regardless of age, anyone can fall victim to this type of con.

Learn how to avoid getting duped by lottery scams, what red flags to look out for, and how to recover your money (if possible).

What Are Lottery Scams?

A lottery scam, also known as lottery fraud, involves a thief trying to trick someone into paying them money or providing sensitive account information in order to access their supposed lottery winnings.

But after the victim provides what the scammer wants, they learn there’s no prize and the scammer disappears. The ultimate goal of a scammer is to make money, either directly from you or by selling your account information to someone else.

For example, a thief may steal your credit card information, quickly use it to make a purchase, then return the item for a refund or sell it to someone else. They may also sell your credit card information on the dark web to score a quick profit while minimizing their risk of getting caught.

Red Flags of Lottery Scams

There are several red flags to keep an eye out for to prevent a scammer from taking advantage of you. These include:

Winning a Sweepstakes You Never Entered

If you get a call that you won a sweepstakes or lottery that you don’t remember entering or know you didn’t, this is likely a red flag.

A Lack of Contest Information

Oftentimes, fake sweepstakes and lotteries will omit any fine print or details about the contest. If you can't find anything about the start and end dates, methods of entry, prize descriptions, legal disclaimers, and eligibility requirements, you may be dealing with a scam.

Paying Money to Claim the Prize

If you’re ever asked to pay anything at all in order to receive your prize, it may be a scam. This may even include receiving a partial payment check and getting asked to pay a fee for the remainder of the prize.

Paying Money to Increase Your Chances

Anytime someone claims that making a payment increases the chance that you’ll win a lottery, this is lottery fraud. Authentic lotteries or sweepstakes give all players the same chance of winning based on purchasing equal numbers of tickets—or receiving them for free.

Asking For Your Banking Information

If you’re ever asked to provide financial information to claim a prize, it’s probably a scam. There’s no reason a legitimate lottery administrator needs your bank, credit card, or any financial banking information.

Most Common Lottery Scams

While there are a wide variety of lottery scams out there, but some are more common than others.

• Foreign lottery scams involve victims being told they won a foreign sweepstakes and need to pay taxes and fees on it before being able to collect their winnings.
• Government imposter scams involve con artists claiming to work for the government or a governmental agency, such as the Federal Trade Commission (FTC). They’ll say you’re entitled to a prize but need to pay a fee to claim the prize money.
• Organization imposter scams involve a scammer posing as a well-known company or organization. They’ll say you won a prize but again must pay a fee in advance to claim it. In this lottery scam, the thief attempts to exploit your trust in that organization.
• Underpayment scams involve the fraudster sending you a check for less than the amount you "won," and will ask you to pay a fee to receive the rest of the money. Even though the initial check is fake, this scam is effective because it can take the bank several days for the check to clear and be flagged as fake. By then, you’ll have given the scammer your money and they will be long gone.

How to Beat Lottery Scams

To beat lottery fraud, you should keep a few things in mind anytime someone reaches out—via phone, email, text, or regular mail—regarding money or prizes you’ve supposedly won.

Never Pay Money to Claim a Prize

A real lottery doesn’t require you to pay money to get your prize. In some cases, you may have to travel to pick up or claim the money, but you will never have to send a check, wire funds, or pay cash to get authentic lottery winnings.

Don't Deposit Partial Payment Checks

Sometimes scammers will send you a check with your partial winnings, with the promise of the full payment once you send a fee to the "contest sponsors." In most cases, this is a fake check that will bounce once it clears and you'll end up owing the bank that money. 

Beware of Lotteries that Pressure You to “Act Now”

Legitimate lottery winnings won’t require an instant response. If someone says you have to act quickly, they may be trying to fool you into making a rash, emotional decision based on a desire to get easy money. Even if there’s no money being asked for, whenever there’s pressure to provide any kind of information to claim your winnings, it’s probably lottery fraud.

Refuse to Participate in Foreign Lotteries

It’s illegal for Americans to play foreign lotteries or participate in sweepstakes hosted in another country, so you should always decline your “winnings,” if offered. The scammer may also be trying to take advantage of your unfamiliarity with the economics of a foreign country, hoping you believe people in that area have money that they can give away at will.

Don’t Respond to Emails About Lotteries

Responding to an email may seem like a relatively innocent step. But if the lottery is legitimate, there will be a real phone number, as well as information about the organization sponsoring it.

You shouldn’t respond via email—even to ask for more information—because the reply you get may have malware embedded in it. This could be in the form of a link you’re asked to click on or an attached file. The malware can then be used to spy on your device, grant access to your personal information, or provide a “backdoor” for a hacker to access your system later.

Never Give Out Your Financial/Banking Information

To prevent con artists from stealing your identity, you should never give out your personal information over the phone, via email, or text messages to anyone you don’t know or trust.

You should also double-check the validity of any website, such as a bank site, before entering any information. When sending any money online, be sure to only use sites that begin with “https://,” these are the most secure sites.

Fallen Victim to a Lottery Scam?

If you’ve fallen victim to lottery fraud, you should report it right away. The sooner you get information to the authorities, the more likely they will be able to either catch the thief or help you get your money back. Here are the steps you can take:

• For prizes and promotions that come in the mail, report them to the US Postal Inspection Service
• If you think your personal information has been compromised, report it to Identitytheft.gov 
• Report it to the International Consumer Protection Enforcement Network
• Report the incident to the FTC 
• Contact your state attorney general and local consumer protection office

Finally, let your friends and family know, because the scammer may try to target them next

How to Get Your Money Back From Lottery Scams

In some instances, you may be able to get your money back after falling for a lottery or sweepstakes scam. If you paid via:

• Credit card: You can let your credit card company know what happened and see if they are able to refund your money. You may be able to get some or all of your money back if the thief made an unauthorized transfer of funds from your bank account or an unauthorized purchase. Simply compile all your evidence, reach out to your bank, and explain the situation.
• Wired Funds: You can reach out to the wiring company, tell them it was a fraudulent transaction, and ask them to reverse the wire transfer if it’s not too late.
• Cash: If you sent cash through the mail or another courier service, contact them immediately. You’ll need to provide them with all the necessary information intercept the money before it reaches the scammer.