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.
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.
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:
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.
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.
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.
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.
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.
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:
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.
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.
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.
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.
Fabulous wealth and life-changing prizes aren't always what's to be expected after receiving a call from PCH—it could just be a scam to steal your information and money.
Venmo users are noticing suspicious emails hitting their inboxes with claims of a large sum of money waiting to be transferred by a PayPal user.
It may be exciting to receive a letter telling you you've won a huge sweepstakes prize, but before you celebrate, verify the letter first. More often than not, it's a scam.
If you receive a check in the mail from Publishers Clearing House from winning a sweepstake, don't celebrate just yet.
If you enter Cash App giveaways or sweepstakes, be extra cautious. Scammers will try to trick you into thinking you've won but are really just trying to steal from you.
Arm yourself with information on how this scam works and the red flags to watch out for to protect your bank account from these thieves.
Read how an actual sweepstakes scheme unfolded and scammed an elderly couple out of $800,000, as told by investigative consultant and ex-DEA Special Agent, Jason James.
Scammers are sending fake Venmo emails to Facebook Marketplace sellers in an attempt to steal login information and money.
If you've received a locked debit card text message from Citibank, it's likely a scam. Don't click on the link and delete the text message.
If you receive a text message from Chase Bank, don't click on any links or call the phone number listed—it could be a scam designed to steal your information and money.
Cash App may be a convenient way to send and receive money from friends and family, but it's also a common target for scammers who are out for your money.
With every Facebook Messenger scam, the attacker is trying to steal from you—whether they’re after money, login credentials, or other personal information.
Nike is one of the biggest brands targeted by counterfeiters and scammers - be extra careful with Nike products from non-official retailers as you could end up with a fake
Average prices from funeral homes range between $8k to $14k and consumers are meant to be protected by a 'Funeral Rule' - what are your consumer rights?
If you share your account with multiple users, archiving your past orders is a good way to keep others from seeing your orders and ruining a surprise or seeing private orders.
The CDC is warning eye drops users of a rare bacterial infection from 2 brands of eye drops. The infection is resistant to antibiotics and has resulted in the loss of vision, loss of eyeballs and the death of 3 patients.
Zelle scams have reached a serious volume. New reports suggest that banks are looking at new refund protections for customers in 2023.
Hackers have gained access to 9.8 million customer records from Optus in Australia, exposing personal information such as driver licence, medicare and passport details.
Find out what the overturning of Roe vs. Wade means for abortion rights in your state.
The number of people searching for the term "COVID vaccine 5G" on Google has just hit an all-time high, but there's one way to be sure that there are no microchips.