Sweepstakes Scams: How to Identify and Avoid Fraudulent Schemes

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Dolores Bernal
Editor
September 22, 2023

YOU Won!!!”

What could be more exciting to hear? And who doesn’t want to be a winner—especially when it comes with a prize?

This could be the best news you ever hear…or a trap that ruins your life. 

If you play the lottery, enter contests, or participate in sweepstakes of any kind, you could be a target for scammers. 

But here’s the truth: Even if you never test your luck, you might still fall victim to a sweepstakes scam. And the more you think you’re immune, the higher the risk becomes. 

You lower your risk of these scams with good information and common sense safety measures. Find both below. By the end of this article, scammers will wish they’d never tried to mess with YOU.

person holding white printer paper

Photo by Erik Mclean

What are Sweepstakes Scams?

Sweepstakes scams take many different forms, but they all start similarly.

You receive a message by phone, email, text, or direct message saying you’ve won something. It could be a lottery jackpot or a sweepstakes prize. It might be a sum of money, a new car, or a free vacation

The scammers promise the prize is yours…provided you do something first. 

Some will claim you need to pay a fee before you can collect your bonanza. They will ask for electronic payment by something like Paypal, Venmo, CashApp or a similar service. Or they will have you send a wire transfer through Western Union (link to article).

You pay the fee. And then the prize never arrives.

It doesn’t matter how much you pay, how much you pay, or how many times you pay: the prize was never real, and the upfront fee was a fake charge to steal your money. The whole thing was a scam.

Sometimes these scams will target your identity. Instead of asking for money, scammers will ask for account details, banking information, and even passwords

Once scammers have this information, they can impersonate you online. And once they can do that, scammers can start to drain your accounts, make purchases in your name, and use your reputation and resources to commit other crimes

Sweepstakes scams range from bad to worse. The consequences can be catastrophic for those victims hit the hardest. And, as you will discover in the next section, these scams are A LOT more common than you would ever imagine. 

How Common Are Sweepstakes Scams?

The Federal Trade Commission (FTC) investigates reports of scams happening across the country. In 2021, the agency received 148,000 reports of sweepstakes scams. 

That’s a lot. And it’s just the tip of the iceberg.

The people that fell for these scams lost $255 million collectively. That’s more than one-quarter of a billion dollars. Worse, few if any ever recovered the money they lost…or even saw their scammers caught and brought to justice. 

The number of sweepstakes scams that year was 27 percent higher than the year before—an especially large increase, but part of a longer trend where each year sees more sweepstakes scams. 

Perhaps most alarming of all: these numbers could all be too short by significant margins.

Why? Because many (if not most) of the people who fall for scams feel embarrassed and prefer to keep the incident private. They never report it to the authorities or admit how much they lost. 

So the number of sweepstakes scams we know about is just part, maybe even a small part, of the real total. Let that sink in. Then see how bad things can get.

time lapse photography of several burning US dollar banknotes

Photo by Jp Valery

A Real Example of Sweepstakes Scams

A man living in Jamaica was sentenced to 71 months in prison for running a multi-year lottery scam that stole over $1.8 million

Only one victim accounts for the vast majority of that amount. He was an elderly man in Connecticut who one day, out of the blue, received a phone call congratulating him on winning the lottery. 

All he needed to do to collect the winnings was pay a small fee. One payment led to more

Scammers convinced him to send checks, money orders, and even precious metals by claiming they would cover handling, taxes, and insurance. The scammers used multiple aliases and accomplices in several countries. They were so convincing and relentless that they got the victim to pay a massive sum.

He lost $1.2 million before it was over.

This remarkable case highlights how bad sweepstakes scams can get. It also reveals how persistent they can be, extracting as much as possible from victims until the well runs dry

It’s an especially cruel form of fraud. In this as in so many other instances, though, it’s a highly effective form of fraud too. 

The next section reveals who has the biggest target on their back. 

Biggest Target for Sweepstakes Scams

Remember what we said earlier, about how anyone can be a target or a victim of a sweepstakes scam?

Well, it’s true, but one population is at MUCH higher risk.

Who? Senior citizens

Scammers target older people more than anyone else. And, as a result, it’s people over 55 who most often have their money or identity stolen in one of these scams. 

The numbers are shocking, really. According to the Better Business Bureau, 72 percent of the complaints they receive about sweepstakes scams come from older people. 

Do you know what’s even more alarming? Most seniors targeted by sweepstakes scams lost money as a result. The vast majority, 90 percent, sent money to the scammers. And the average loss was $978.

If you are over the age of 55, take these numbers as a wake-up call. And don’t forget that scammers can be very savvy and sophisticated. Everyone needs to be careful of the threat of sweepstakes scammers—but the people at the highest risk need to take extra caution.

How? 

Identity theft protection is one option. It makes it harder for scammers to steal your money or personal information—so most get frustrated and don’t even try. Many older people have identity theft protection for this exact reason. 

To get a sense of what’s at stake, learn what some common types of sweepstakes scams look like in the next section. 

Different Types of Sweepstakes Scams

Fraud takes many forms, and scammers will say anything to gain your trust. Some common tactics used in sweepstakes scams include:

  • Posing as the IRSScammers claim to be from the IRS (or another government agency) and insist that you pay taxes or other fees before receiving your winnings. 
  • Using Real Names – Scammers will say they are from a legitimate organization, like your state lottery, and even use real people’s names to make themselves sound legitimate, so you will drop your guard. 
  • Stealing Data – Scammers will claim you won a prize but need to provide personal, sometimes highly sensitive information before you can collect it. 
  • Sending Malware – Scammers send you a link that you must click to claim your prize, but it actually downloads malware (link to malware/spyware piece) to your computer. 
  • Fake Contests – Scammers invite you to enter a foreign lottery or new contest with fantastic prizes and odds but then steal the entry fees you send in. 
  • High Pressure – Scammers claim you must act fast or else forfeit your prize so that you won’t have enough time to exercise good judgment. 
  • Bogus Checks – Scammers send you a check for your winnings but tell you to deposit it and send part of the amount back. The check is fake, and the money you send comes from your own accounts.
person using laptop computer holding card

Photo by rupixen.com

Why are Sweepstakes Scams Common?

Sweepstakes scams are as old as scams themselves. And they are likely to be around for all time.

The reason why they’re so common throughout history is that sweepstakes scams are effective. And scammers will return to whatever works. 

Sweepstakes scams most definitely work, as some of the numbers mentioned earlier illustrate. And the reason why they work is because the desire to win is almost universal

That’s why so many people play sweepstakes in the first place. Did you know that 8 in 10 Americans (so almost everyone) play the lottery? We all dream of a payday that comes out of nowhere, costs us little to nothing, and makes our life better than before. 

Just the idea of it is fantastic. 

So when the prospect of it actually arrives—YOU WON!—we are overwhelmed with excitement and we stop thinking rationally. Something VERY desirable seems so close within reach. So, of course, we would do whatever it takes to make the winnings a reality. And when the promised winnings are millions of dollars, going to great lengths seems justified because the final payday will more than cover the upfront costs. 

Scammers know all this. They know how to push people’s buttons, catch them off-guard, get them to ignore red flags, and act recklessly without realizing it. 

Sweepstakes scams are a perfect way to manipulate people. That’s why they’re so common. And with so many ways to connect with people these days—phone, email, social media, etc—they’re more common than ever. 

That makes it essential for you to have sweepstakes scams on your radar—or take proactive measures to keep yourself safe with something like identity theft protection. 

No matter what you do, you need to know how to spot sweepstakes scams (it’s not as easy as you expect). 

We rundown what to watch out for in the next section. 

How to Spot Sweepstakes Scams

The good news about sweepstakes scams is that no matter how smooth or convincing a scammer may sound, there are a few telltale signs that reveal their true intentions. Scammers can’t hide them. And when you see them, you know a scam is afoot:

  • Upfront Payments – NO lottery will ever ask you to pay money upfront before collecting your winnings, and very few, if any, contests or sweepstakes work this way either. Any request for upfront payment, for any reason, should prompt you to stop contacting the scammer immediately. Ignore all their future contacts, even if they claim you will lose your winnings. 
  • Unexpected Winnings – You cannot win a lottery you did not buy a ticket for, and sweepstakes only select winners from the people who signed up. Basically, you can’t win a contest you didn’t enter, so if you get notified you have, it’s probably a scam. Likewise, the lottery will never contact you to say you’ve won—you always need to contact the lottery first and file a claim form. 
  • Spam Messages – Even though most sweepstakes scams claim you’re the one and only winner,   you’re actually one of hundreds or thousands of people getting the same message. Spam messages will not use any identifying details, like your actual name, and they will arrive as bulk mail or as part of mass emails. 
  • Typos – Spelling errors, bad grammar, and confusing word choices are a dead giveaway of a sweepstakes scam. Any organization giving out a substantial prize would take the time to edit its communications. Don’t point out the mistakes or have any further contact with the scammers—delete the message and any others that arrive later. 
  • Suspicious Area Codes – Many sweepstakes scams originate from countries in the Caribbean, specifically Jamaica, the Dominican Republic, and the British Virgin Islands. Calls from these countries, especially call about prize winnings, are HIGHLY suspicious. If you see calls from the area codes 876, 809, or 284 and don’t know anyone in those countries, it’s best not to answer the phone at all.
a man in a hoodie using a laptop computer

Photo by Bermix Studio

How to Avoid Sweepstakes Scams

You avoid sweepstakes scams by having as little contact as possible with scammers. 

That starts by taking the warning signs outlined above seriously. When you recognize any red flags, cut off contact immediately, even if you have doubts about losing a legitimate prize. 

This is a sound strategy, but it has two weaknesses. First, tomorrow’s scams will only be more convincing. You might not be able to spot any warning signs or tell real winnings from fakes. So what do you do about the scams you can’t see?

Second, sweepstakes scams are designed to catch you in a moment of weakness. That moment can come suddenly, unexpectedly, at the worst time possible. Even if you’ve seen the warning signs in the past doesn’t guarantee you will see them next time. So how do you avoid what you can’t ignore

The people at the lowest risk of sweepstakes scams—or any other scam, for that matter—are the ones that don’t rely entirely on themselves for protection. They enlist professionals. 

Identity theft protection makes you more immune to scammers by giving you tools to see scams in progress, stop the scams that impact you, and scale down the damage of anything bad that happens. 

But what about those people—far too many, unfortunately—who get hit with sweepstakes scams before they have identity theft protection in place? What can they do to recover?

We cover that next.

silhouette of person

Photo by Miguel Bruna

What Should Victims of Sweepstakes Scams Do?

First and foremost, stop all contact with the scammer, ignore all future messages, and send no additional money for any reason. Also, ignore any calls, texts, or messages that come from new senders but reference the old scam—it’s probably the same people. 

You may want to send a final message with some harsh words or threats, but ignore that instinct too. The sooner you’re done with the scam, the better. 

We mentioned earlier how common it is for victims of sweepstakes scams to keep what happened privately. But in order for the people who did this to be caught and to keep this from happening to other people, you need to alert the authorities. 

Get in touch with your local law enforcement; contact the local or state consumer protection office; alert the state attorney general; and file a report with the Federal Trade Commission. Investigators may want to see evidence of the scam, so save any texts, emails, or direct messages, but do not click any links or download any attachments. 

The final thing you should do is contact your bank, credit union, or wire transfer provider. If you do this ASAP after sending the money, they may be able to cancel the transaction so you lose nothing. They can also help you prevent future fraud and provide authorities with evidence about scammers. Get your payment provider involved immediately. 

Anyone who’s been a victim of sweepstakes scams needs to know another alarming fact: past victims are more likely to be future victims—by a wide margin

It’s not because they’re gullible. It’s because scammers return to the same targets over and over again. They also sell or share your personal details with other scammers. You get targeted by more scams, more often, and more aggressively once you’ve been a victim of one.

With that fact in mind, many victims of sweepstakes scams, whether recently or far in the past, get identity theft protection. They may choose a service like Aura which does all the monitoring and alerts them if malicious activity occurs. Having this protection can give anyone some peace of mind.

Conclusion

Sweepstakes scams use human nature against us, exploiting our feelings of excitement over winning something to scam and steal from us instead. 

These scams happen often, take many forms, and target everyone (but especially the elderly). And for those who fall victim, the losses can be significant

Scams like these are a fact of life, unfortunately. But your risk is already lower now that you’ve made it to the end of this piece. Keep your eyes peeled for the warning signs and add identity theft protection to the mix – and you know what? Scammers don’t stand a chance.

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