Staying Safe With: Unexpected Money Or Winnings

1. What Are Unexpected Money or Winnings Scams?
2. Red Flags of Unexpected Money or Winnings Scams
3. Common Types of Unexpected Money or Winnings Scams
4. How to Beat Unexpected Money or Winnings Scam
5. How to Recover from Unexpected Money or Winnings Scams

Everyone likes receiving unexpected money. And while getting a notification that you won money could be good news, it can also put your finances in danger if you’re not careful.

Sweepstakes and unexpected money scams are not new. In fact, in 2020, the Federal Trade Commission (FTC) received more than 116,000 reports of fraud involving these types of scams. Last year, the average loss for scams involving fake prizes, sweepstakes and lotteries was around $1,000 per person and totaled around $166 million collectively.

Know what to look for next time you get a notification of unexpected money or winnings.

What Are Unexpected Money or Winnings Scams?

In an unexpected money or winnings scam, scammers will contact an individual by text, email, phone, or by mail to let them know that they have won a prize and are due money. The scammer may claim you have inherited money, won a lottery or sweepstakes, or are getting a refund from the government.

The catch, though, is that they will require you to pay a deposit, taxes, or customs duties upfront in order to claim your winnings. Most likely, they will ask for this payment in the form of a wire transfer, gift card, prepaid debit card, bitcoin, or cryptocurrency. Once they receive payment, the scammer will disappear and you’ll be out the money you paid them.

Red Flags of Unexpected Money or Winnings Scams

Scammers will use many ways to convince you that your winnings are legitimate, but if you look for these red flags, you can protect yourself from falling for an unexpected money scam:

• You are notified about winning a sweepstakes that you never entered
• You are told you have to pay a fee to collect your winnings
• The sweepstakes rules are missing one or more of these items: a start and end date, methods of entry, the prize descriptions, and various disclaimers
• There are grammar and spelling errors in the messages you received
• You are told you must act immediately, or you will lose the money
• You are told you must pay with a wire transfer, gift card, prepaid debit card, or cryptocurrency
• You are asked to share your banking information

Common Types of Unexpected Money or Winnings Scams

While all unexpected money or winnings scams follow similar patterns, there are a few specific varieties of this scam that you may run into. Here are some of the most common ones.

The Nigerian Prince Scam

You may already have heard about the Nigerian prince scam over the years. It works by someone contacting you, claiming to be a prince from Nigeria or another country experiencing political unrest. Because of this, the prince (the scammer) will claim that they cannot access their money, but with some financial help from you, the money will be released. He’ll also offer his thanks by promising to send you a generous reward for helping. Of course, none of this is true, and your money will disappear with the fake prince if it is sent.

Inheritance Scams

In this scam, the person who contacts you claims to be a lawyer or banker and has some great news. You have just inherited money. The bad news is that the money is tied up in red tape, and you have to pay an expert in order to free it up. Once you pay the bill, the scammer will have your money and it will be gone for good, along with the fake inheritance.

Sweepstakes and Lottery Scams

There are many variations to this type of scam. The scammer will claim that you have just won a lottery or sweepstakes. They may use the name of a made-up company, or they could use the name of a well-known sweepstakes like Publisher's Clearing House. As with the other unexpected money scams, you will be asked to pay a fee to get your winnings which don't exist, and once you do, the scammer will take off with your money.

Tax Refund Scams

In this scam, the scammer will claim that they are representing the IRS and that you have a tax refund waiting for you. To get your refund, though, you will have to pay an administration fee. But there is no refund, and this is just a way for the scammer to steal your money.

How to Beat Unexpected Money or Winnings Scam

If you think you have been contacted by a scammer claiming that you are due money or winnings, the following tips will help prevent you from becoming a victim:

• Don't click any links in the email or text: These links could lead to phishing sites that will steal your data.
• Don't pay the fee: You shouldn't have to pay a fee to get any money you are owed.
• Don't give out your financial or sensitive data: Never give a scammer access to your data by offering up your login credentials, banking account numbers or any other sensitive information.
• Do hang up on calls from any company claiming you won money: No legitimate company will call to say you won a prize for a contest you never entered.
• Don't deposit supposed winnings: Sometimes scammers will try to convince you that it is a legitimate winning by giving you a fake check. This partial-payment check will never clear and may end up costing you fees when it bounces.
• Don’t reply to the suspicious messages, chats, or emails: Often, these messages are sent in bulk, and while responding to them won't result in loss of money, it could make you the target of future scams because it will tell the scammer that they reached a real person.
• Do block the sender of suspicious emails or calls: It’s best to immediately block a number or email that seems fishy and contact the business directly (if they are posing as a reputable company) and ask if you won anything.
• Do sign up with the "Do Not Call" registry: You can add your phone number to the Do Not Call list at gov to potentially thwart calls from scammers.
• Do report the scam: Report the scam to the FTC and the FBI. If you received the message through an app or social media, report the scam to the online company.

How to Recover from Unexpected Money or Winnings Scams

If you have fallen for an unexpected winnings scam, you do have a few options. The best thing you can do is let people know so that authorities can get to work catching the scammer or alerting the public so that others don’t fall victim to the scam.

Contact Your Financial Institutions

If you paid with a gift card, prepaid debit card, or cryptocurrency, you won't have the option to stop payment. But, if you paid with a credit card, debit card, or check, you may have the option of stopping the payment from going through to the scammers. By doing so, your financial institution will help you make the right steps to save yourself from getting scammed. If you made the payment by wire transfer, call the wire transfer company and tell them it was a fraudulent transfer. You may be able to stop the transfer.

Contact the Authorities

You'll want to report the scam to the authorities as soon as you can. Go to ReportFraud.ftc.gov and report it to the FTC or contact your state attorney general and your local consumer protection office. If you received the notice in the mail, contact the U.S. Postal Inspection Service. And, finally, if you gave any personal information to the scammer, report it at IdentityTheft.gov.

Contact Any Internet Platforms Involved

If the scammer contacted you through a social media platform or a chat app, contact the business that owns the platform and give them details about the scam. They may educate other users about the scam or create safeguards to prevent anyone else from falling victim to it.