80% of Money Lost in Prize Scams Comes from Seniors

Sweepstakes, lottery and prize scams have not lessened their financial and emotional harm, despite concerted law enforcement efforts, according to data from Better Business Bureau (BBB), the Federal Trade Commission (FTC) and the Internet Crime Complaint Center (IC3).

This fraud is especially devastating to older adults in the United States and Canada. BBB cautions seniors to be particularly vigilant about recognizing and avoiding tactics used by scammers to prey on people during the COVID-19 crisis.

Adults age 65 and older remain overwhelmingly the largest group victimized by these scams. Of the 4,417 sweepstakes and lottery scams reported to BBB Scam Tracker since 2018, nearly half, or 1,980, came from victims over 65. This age group lost $2.52 million of the $3.1 million in losses reported to Scam Tracker, representing more than 80% of money lost by Americans and Canadians to this fraud.

Combined FTC and IC3 complaints reflect losses of $112 million in 2017, $182.6 million in 2018, and $170.4 million in 2019.

"The law requires you to purchase a ticket to play the lottery, but a legitimate lottery or sweepstakes will never ask its winners to wire money or buy gift cards to claim the prize," said Blair Looney, president and CEO of the BBB office serving Central California and the Inland Empire.

Scammers have updated their sales pitches to potential victims to include COVID-19 twists. According to Scam Tracker reports, scammers are discussing supposed COVID-19 safety precautions for prize delivery, and attributing delays in awarding prizes to the pandemic.

One impostor scam, fraudulently using the Publishers Clearing House name with a bogus COVID-19 Census Grant, allows targeted victims to choose their winnings by the amount of fees they are willing to pay.

Using social media, scammers publish a list of supposed winners and invite people whose names are not on the list to provide personal information and choose their award level.

Many sweepstakes and lottery scams continue to originate from Jamaica. This is particularly true of cold calls over the phone. However, scammers may reach out by email, U.S Postal Service or even social media. Postal inspectors say now many victims are being instructed to mail cash to scammers. Besides offering fake cash prizes, scammers may lure victims by also claiming victims will receive luxury cars, laptops or other high-end merchandise.

Tips for Avoiding Sweepstakes, Lottery or Prize Scams

• You've got to play to win. 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 actually entered a contest that contacts you.

• True lotteries or sweepstakes don't ask for money. If they want money for taxes, themselves or a third party, it most likely is a scam.

• Call the lottery or sweepstakes company directly to see if you won. According to Publishers Clearing House (PCH), it does conduct sweepstakes but does not call or email people in advance to tell them they've won a major prize, nor ask for money. Report PCH imposters on their hotline at 800-392-4190.

• Check to see if you won a lottery. Call the North American Association of State and Provincial Lotteries at 440-361-7962 or your local state lottery agency.

• Do an internet search of the company, name, or phone number of the person who contacted you.

• Law enforcement officials do not call and award prizes. If you think you have been contacted by law enforcement, verify the identity of the caller and do not send money.

• Talk to a trusted family member or your bank. They may be able to help.

Where to Report a Sweepstakes, Lottery or Prize Scam

• Better Business Bureau: BBB Scam Tracker at bbb.org/scamtracker.

• Federal Trade Commission (FTC): ftc.gov/complaint or 877-FTC-Help.