Do you feel lucky? Think Twice About Lottery, Prize and Sweepstakes Scams!

With St. Patrick’s Day just around the corner, many of us hope to have the “Luck of the Irish” this time of year. Unfortunately, there are plenty of scammers who are ready to turn your (mis)fortune into a financial windfall for themselves.

In 2024 alone, Americans lost nearly $340 million to lottery scams alone according to the Iowa Attorney General’s office. Many of these scams follow the same playbook, using various techniques to trick victims into sharing personal or financial information.

How the Scam Starts

It often begins with a phone call or message that saying, “You’ve won a prize!” While this might sound exciting, it’s what happens next that sets the stage for the scam. The scammer will typically try to establish a relationship with you. They may call multiple times a day, check in on how you’re feeling and attempt to build your trust. The goal is to get you comfortable, making it easier to manipulate you into acting without question when the scam takes its next step.

The Next Step: The “Prize” Fees

Once trust is established, the scammer will tell you that, in order to claim your prize, you must pay a processing fee or other associated charge. They may even ask you not to tell anyone, claiming that they don’t want you to get harassed when your winnings arrive. The fees they request are usually in the form of gift cards or cryptocurrency transactions, which are nearly impossible to trace. Unfortunately, once the money is sent, it’s unlikely you’ll ever see it again. In some cases, scammers may escalate the request and ask victims to send cash in the mail to cover various fees. This is a particularly dangerous tactic, as once the cash is sent, it’s nearly impossible to trace.

A Common Twist: “The Goods Are On Their Way”

Another common part of the scam involves the scammer claiming that they are already on their way to deliver the prize. They’ll tell you that the goods or prize are almost in your hands, but to finalize the delivery, they need just a little more money to “seal the deal.” This final push often involves a request for more gift cards, cash, or even a bank transfer, and the scammer will insist that this is the last step before you receive your prize.

Three Signs of a Prize Scam:

• You have to pay to claim your prize. Real prizes don’t require any upfront payments to claim.

• You’re asked to pay to increase your chances of winning. Legitimate sweepstakes are free and winning is by chance. It’s illegal for someone to ask you to pay to better your odds.

• You must provide personal or financial information. There’s never any reason to EVER give your banking information to claim a prize.

How to Avoid the Scam Entirely:

• If you receive a call from a stranger claiming you’ve won a contest you never entered, hang up immediately.

• Do not respond to unsolicited text messages, voicemails, emails or any other communication requesting you take action to claim your prize.

• Never send cash in the mail to anyone asking for payment to claim a prize. This is a major red flag.

What to do if You Suspect a Scam:

• If you think you’ve been targeted by a scam like this, talk with someone you trust. Keeping the information to yourself may leave others vulnerable to the same tactics. If you have made payments or shared your personal information, it’s crucial to act quickly. Contact your local law enforcement if you’ve been scammed.

Fraud Watch is a collaborative effort between Advantage Credit Union and the Newton Police Department, dedicated to keeping our community informed about the latest scams and fraud prevention tips. If you have any questions or concerns about fraud or identity theft, please contact your local financial institution.

Disclaimer: This article provides general information and should not be considered financial or legal advice.