Four Steps to Prevent Being a Lottery Scam Victim
Everyone with an e-mail account or Web browser has seen a "Congratulations, You're a Winner!" message or something similar promising victory in a lottery, prize, or sweepstakes. Everyone ignores these scams, right? No, not everyone, unfortunately.
The Federal Trade Commission reports that these types of scams were the third highest complaint category for 2010, behind No. 2 identity theft and No. 1 debt collection. In response to these complaints, the FTC is hosting a workshop in Chicago to bring together law enforcers, consumer protection organizations, businesses, and representatives from money transfer service providers to discuss the most effective ways to fight the problem.
How do these scams work? The scams are extremely simple, which is perhaps why they are so widespread, popular, and full of variations. The essential two elements are these:
- The scammer contacts the victim and says they are the lucky winner of a windfall (i.e., lottery, sweepstakes, or other prize). The scammer may even claim to work for the FTC.
- To collect the prize, the victim must send the scammer a so-called processing fee or tax payment
The victim uses a money transfer service, such as Western Union Money Transfer or MoneyGram, to pay the scammer. This allows the scammer to reside almost anywhere in the world, and to receive the payment in cash virtually anonymously. It is almost impossible for the victim to retrieve the cash because the scammer is almost always in a different jurisdiction from the victim. Also, the victim has a issue proving the scammer was indeed the party that collected the money. A check or credit card payment, for example, create a much clearer paper trail to the scammer.
How to Prevent Being a Scam Victim
The FTC offers these four suggestions to prevent being a scam victim:
- Do not pay to collect sweepstakes winnings. If you have to pay to collect your winnings, you have not won anything. Legitimate sweepstakes do not require you to pay "insurance," "taxes," or "shipping and handling charges" to collect your prize.
- Hold on to your money. Scammers pressure people to wire money through commercial money transfer companies like Western Union because wiring money is the same as sending cash. If you discover you have been scammed, the money is gone, and there is very little chance of recovery. Don't send a check or money order by overnight delivery or courier, either. Con artists recommend these services so they can get your money before you realize you have been cheated.
- Look-alikes are not the real thing. It is illegal for a promoter to lie about an affiliation with — or an endorsement by — a government agency or any other well-known organization. Disreputable companies sometimes use a variation of an official or nationally recognized name to try to confuse you and give you confidence in their offers. Insurance companies, including Lloyd's of London, do not insure delivery of sweepstakes winnings.
- Phone numbers can deceive. Some con artists call using Internet technology that allows them to disguise their area code. It may look like they are calling from Washington, DC, or your local area, they could be calling from anywhere in the world.
The FTC recommends that if you are the victim of a scam, file a complaint with the FTC Complaint Assistant.
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