International Lottery Scams: "Big Winners" are Losing Big

And look out, once you respond to one such phony solicitation, your name goes on a mailing list used by fraudulent marketers, and soon your mailbox will be flooded with similar bogus lottery and sweepstakes offers. 

Millions of foreign lottery solicitations are sent out each year, despite the fact that it is a violation of federal law to sell or purchase foreign lottery tickets. 

Here’s how a typical international lottery scam works.  You receive a letter or email notifying you that you have won X millions of dollars.  All you have to do to claim your money is wire a fee to the company to cover processing or taxes.  You don’t mind paying a few hundred or even thousand dollars when you’ve just won $4 million.  (In fact, you’re so ecstatic over your good fortune that you don’t even question the fact that you can’t recall ever having played the Spanish lottery.)  So you go ahead and wire the fee, but you never receive your winnings. 

Often the notification letter contains a check for four or five thousand dollars.  You are directed to deposit the check in your account and then call a given telephone number to receive further instructions once the check has cleared.  When you call the number you are told to wire funds – usually in an amount equal or close to that of the deposited check – to an account overseas.  Once these “fees” have been received by the company, you will be sent your winnings.  Or so you are told.  Unfortunately, not only does the money never come, but your bank notifies you that the check you deposited is counterfeit.  What’s more, most banks will hold you liable for any transactions you made against that money and any overdraft fees you might have incurred as a result.  (You may have thought you were covered when the bank said the check had cleared, and scammers count on this common misapprehension.  The truth is that when a bank tells you a check has cleared it simply means the bank’s standard hold period (usually 3-7 days) has been satisfied; it is not a guarantee that the funds have been received.  It can actually take several weeks for a fraudulent check to be returned to the customer’s bank.)

In other lottery scams you may be asked to provide your personal bank account information so the company can deposit your winnings directly into your account.  Instead, the scammer may use that information to withdraw money from your account. 

Sometimes scammers will send solicitations for the purchase of foreign lottery tickets prior to the eventual letter notifying you that you have won.  However, the money sent for the ticket purchase either goes straight into the scammer’s pockets or the scammer keeps any winnings for himself. 

To protect yourself against international lottery scams:

• Remember that legitimate lotteries, sweepstakes and promotions will never require that you pay a fee in order to receive your prize; any fees will automatically be deducted from your winnings.
  
  
• Never give out your personal financial information. 
  
  
• Ask your bank what service options (e.g. collection item for final payment) are available for the handling of exception items.  These services may carry a fee, but will help ensure that the check is legitimate and that there are sufficient funds in the account before the check is cleared.
  
  
• If you question the validity of a check, contact your bank’s fraud department.   They are in a much better position to advise you than regular bank staff or customer service staff.  Key questions to ask are:
  • Do the name, address and account number listed on the check match the name, address and account number on the actual account?
  • Are there any stop payments or warning notices on your system about this check?
  • Is the check number within range of other items on the account?
  • Are there adequate collected funds on deposit to cover this item?
    
    
• Since it is a violation of federal law to participate in an international lottery, why risk responding to the solicitation in the first place?  

If you receive a foreign lottery solicitation in the mail, send it to your local postal inspector. 

If you have been a victim of an international lottery scam, contact one of the following authorities:

• National Fraud Information Center at 1-800-876-7060
• Phonebusters (for scams originating in Canada) at 1-888-495-8501
• Your local postal inspector

For additional information, contact the Governor's Office of Consumer Affairs.