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          BBB Tip: Sweepstakes, lottery, and prize scams

          (Getty Images)

          The isolation of the coronavirus quarantine and the overall persuasive tactics of scammers are leading to big financial losses recently for elderly individuals. According to BBB Scam Tracker, an 83-year-old woman lost $295,000 to scammers identifying themselves as representatives with the Atlantic Sweepstakes Company, allegedly based in Rochester, New York.  Since 2019, at least three individuals reported losses of well over $100,000 from people stating they were with Publisher's Clearing House or other impostered sweepstakes related companies. A majority of them were contacted by phone, email or social media.

          How the Scam Works:

          An email or phone call allegedly from a contest organization states that you or a member of your family has won a large prize. In order to claim the winnings, taxes, shipping costs, or other fees must be paid first by wire transfer, or prepaid debit card, and sharing the number and PIN with the "contest organizer."

          In another version of this scheme, an official looking letter arrives in the mail notifiying the recipient they're the winner of a jackpot, often from a foreign lottery (it is illegal in the U.S. and Canada to enter a foreign lottery by phone or mail). The letter includes a seal or other insignia to make it look authentic. In some cases, a check is included to cover the taxes on the winnings. The instructions then specify to deposit the check into a personal bank account and wire or use a prepaid debit card to send the "taxes" to a third party. However, be warned, the check is a fake and will bounce then causing the account holder to pay for overdraft fees in addition to the amount the check.

          Tips to Spot This Scam:

          • 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. Keep track of all sweepstakes entries so it's easy to check if a legitimate contest-related company is confirming winnings. When entering, read the fine print and rules for how prizes are claimed.
          • Don't pay upfront fees to claim a prize. No legitimate sweepstakes company will ever ask to pay a fee or buy something to enter or improve the chances of winning — that includes paying "taxes," "shipping and handling charges," or “processing fees” to get a prize. 
          • Checks will bounce after the bank allows the account holder to withdraw cash from the deposit. Check processing is a confusing business, as is the terminology. Even if a bank representative tells you that a check has “cleared” you can’t be sure it won’t be detected as a fake weeks later. One thing you can be sure of is that you will be on the hook for any funds drawn against the amount. 
          • Be suspicious of irregular communication. Real sweepstakes will not notify you via text or bulk mail. They will not send a check in the mail without first confirming with you. And you won’t be notified that you are a winner and have to respond or act within 24 hours to collect your prize.

          Similar:

          • "Free gift for you" text scam: You receive a text message that says something like this: “Your bill is paid for March. Thanks, here’s a little gift for you.” This message followed by a link to an unfamiliar website. The goal is to get your personal information, which puts you at risk for identity theft. In some versions of the scam, scammers may also ask for your credit card information, claiming you need to pay a few dollars to ship the “free” gift.

          Report suspicious activities to BBB Scam Tracker and protect yourself by going to “10 Steps to Avoid Scams”.

          Stay up to date and aware of the latest scams by signing up for Scam Alerts