Luck is fickle. While there are many legitimate lotteries and sweepstakes, there are many others that are actually scammers’ way of stealing from you.
In fact, according to AARP, the Federal Trade Commission (FTC) received more than 148,000 reports of fraud involving prizes, sweepstakes and lotteries in 2021, up 27 percent from 2020. Scammers stole $255 million using these methods.
That’s why it’s important to be alert and stay aware. Sometimes the wins are too good to be true. Here are some of the ways scammers steal your money in false lotteries and sweepstakes.
In many cases, you’ll receive an email, call or social media message saying you won a big contest. Then, they’ll say you need to pay fees or taxes on your prize.
Some fraudsters will even send a check that bounces and collect fake fees and taxes in the meantime.
The big question when you receive a notification saying you won is to verify the contest’s legitimacy. Did you enter that contest? Did you purchase a lottery ticket? Have you heard of the contest? If not, then you should ignore anything saying you’ve won. You’d have to participate in the lottery or enter a sweepstakes to win.
Even if the contest sounds familiar, you should verify who is contacting you. Look at the email. The “from” line will look familiar, but the actual email address will contain other random letters, names and numbers showing it’s not actually from that legitimate place. Scammers also often call from spoof numbers, so the area code appears to be from your home county rather than its true location.
In real sweepstakes, you would not have to pay an upfront fee to collect your prize. Be wary of anyone reaching out to collect your payment information, even if they promise to pay you or give you a prize. This is especially true with anyone asking for a gift card payment or money wire.
When entering contests, read the fine print. Ensure it has the proper legal disclaimers such as start and end date, prize descriptions, entry methods and prize notification. Furthermore, no legitimate contest would require a fee or purchase to improve the chances of winning. Legal contests are drawn at random and state that in a variety of legal language.
If in doubt, ask a trusted family member or friend for advice before divulging any personal information. You should never feel pressured to make a payment or do something immediately.
Remember, the team of state government officials at the Iowa Insurance Division are here to help you. You can report scams here.