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The Better Business Bureau (BBB) is issuing a warning after an elderly San Jose, California man lost $45,000 to a lottery scam. BBB found out about the scam when it was originally submitted by mail as a complaint to the Better Business Bureau of Upstate New York.
After investigating a bit further, the scam took a sinister twist when the victim said the two men he spoke to were “BBB employees” claiming he won a prize from the “Mega Lottery.”
According to BBB ScamTracker, the victim sent the letter to BBB of Upstate New York, thinking he was still contacting the “BBB employees” to get his sweepstakes winnings.
BBB investigators believe the scammer(s) never expected the victim would write to the real BBB, which put an end to the scam. To date, the scammers are still contacting the victim, brazenly requesting another $28,000 and informing him that they have spoken with BBB employees. BBB has confirmed with the victim that BBB of Upstate New York is not trying to collect money from him.
The victim mailed $16,000 in $100 bills via FedEx to the scammers. He was contacted in February to pay more for the so-called “winning check” for validation from a Bank of America branch in Rochester, New York. Fortunately, the victim did not respond to the request and instead reported it to BBB.
Fraudsters involved in this type of scam will use email or a phone call to convince people they’ve won a large amount of money from a sweepstakes, lottery, or some other game of chance. They often count on the person not remembering that they entered the contest, so they can then convince them to pay taxes, shipping costs or provide some personal information to claim the winnings.
When the scammer does mention payment, it is often an alternate form, such as wire transfer, prepaid card, gift card, or in some cases, cash tucked into a magazine sent directly through the postal service. All of this was carried out many times without family or friends knowing.
Another version of this scam includes victims getting a letter informing them they’ve won a jackpot, often from a foreign lottery (it is illegal in the U.S. and Canada to enter a foreign lottery by phone or mail). The letter includes a seal or other insignia to make it look authentic. There is even a check to cover the taxes on the winnings. The recipient is instructed to deposit the check into a personal bank account and then wire or use a prepaid debit card to send the "taxes" to a third party. The check is fake, and the account holder is out the money.
How to spot this scam:
- Don't pay upfront fees to claim a prize. A legitimate sweepstakes company will not ask to pay a fee or buy something to enter or improve the chances of winning — that includes paying "taxes," "shipping and handling charges," or “processing fees” to get a prize.
- A check will bounce even after the bank allows the account holder to withdraw cash from the deposit. Check processing is a confusing business, as is the terminology. Even if a bank representative says that a check has “cleared,” it won’t be detected as a fake until weeks later. Unfortunately, the account holder who signed the check will be on the hook for any funds drawn against the amount, plus fees.
- Think about it: You can’t win if you don’t enter. A notification that you have won a prize in a contest you do not remember entering should be a red flag. If you do regularly enter contests or sweepstakes, make sure you keep track of your entries so you can easily check to see if you have entered a contest that contacts you. Read the fine print on all entries. It should indicate how and when winners are notified. Also, remember, when you buy a lottery ticket, you don’t give your name, phone number, or address to the cashier!
- Be suspicious of irregular communication. Real sweepstakes events will not be notified via text message or bulk mail. They will not send a check in the mail without first confirming with the winner. You will not be notified that you are a winner and must respond or act within 24 hours to collect your prize.
Learn more about Elder Abuse scams.
Read more about Sweepstakes, Lottery, and Prize Scams and download our BBB Investigations Report.
To report a scam, go to BBB Scam Tracker.
Read about more recent scams at BBB.org/news.