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Identity theft and fraud protection for your finances, personal info, and devices.
Lottery Scams Unfairly Target the Vulnerable
Florida woman Diana Izurieta was pleasantly surprised to receive a text message saying that she'd won $90,000 [*]. Only after losing $11,000 to fake processing fees did she realize that she’d been swindled.
Lottery scams target low-income communities and the elderly — demographics in greatest need of financial relief. That’s why scams involving prizes, sweepstakes, and lotteries were amongst the top 10 fraud categories in 2022, according to the FTC [*].
If you’re suspicious about a potential lottery scam, read this guide before you click on any links or respond to any messages.
What Are Lottery Scams?
A lottery scam tricks people into thinking that they've won big prizes — usually in a fake lottery or sweepstakes. The scammers then solicit money or personal information from the victims to process the winnings, ultimately stealing their money or identities.
Lottery scams come in many shapes and forms:
- Last year, the U.S. government convicted four Jamaican nationals for a lottery scam that targeted seniors in South Carolina [*]. The con artists admitted to defrauding elderly victims by stealing over $300,000 in supposed taxes and miscellaneous charges for a non-existent lottery.
- An elderly woman from Knoxville lost $190,000 to a scammer who claimed that the woman had won the international Mega Millions jackpot [*]. She communicated with an imposter for over five years, convinced that she had to make payments using prepaid cards and wire transfers to claim her prize.
How Do Scammers Reach Their Victims?
- Email phishing: Scammers send unsolicited emails that announce a lottery winning — often from well-known organizations — to gather personal information or money from recipients.
- Social media messages: Direct messages on social media may inform potential victims of a prize and request personal or financial information.
- Phone calls: Fraudsters may call targets, impersonating lottery officials, and dangle alleged winnings before pressuring victims to act quickly or else forfeit their prizes.
- Text messages: SMS messages claiming that the recipient has won a lottery tend to include phishing links to fake websites or seek to elicit a reply in some form.
- Direct mailers: In some cases, scammers send physical letters featuring forged logos and signatures to add an air of legitimacy.
- Online pop-up advertisements: Pop-up ads on websites may lure victims to a phishing site or prompt them to provide personal information.
- Fake social media profiles: Fake profiles claiming to represent legitimate lottery organizations may contact potential victims directly or post false information about lottery winnings.
How To Identify a Lottery Scam: 12 Signs
1. Communication about a lottery that you never entered
Receiving communication that claims you've won the lottery is a common overture. It could be through direct mail, social media, or email.
The message uses generic titles or subject lines such as “Congratulations!” or “You’re the Winner!” — or simply the name of a legitimate lottery or sweepstakes like Mega Millions or Powerball.
Keep in mind: Just because the notice appears to be from a well-known lottery does not mean the correspondence is credible. Scammers often masquerade as legitimate contest organizations to increase the chances of recipients committing.
A lottery requires you to buy a ticket to participate. If you never entered a lottery or sweepstakes, you won't hear about it (and most certainly will not win). Whenever you get a letter or email about a lottery that you've never entered, discard it.
2. Phone calls or emails about a foreign lottery prize
Another tactic involves phone calls or emails notifying you that you’ve won a foreign lottery prize. This is a big red flag for one reason: it’s illegal [*]. Americans aren’t eligible to participate in foreign lotteries. No foreign entity may contact you about winning their lottery.
Here’s an example of a scam email that purports to be from the Mega Millions International Lottery — a fictitious organization.
3. Demands for advance fees to claim a prize
Unlike lotteries, it's illegal to charge money in order to enter or claim a prize in a sweepstakes [*]. Remember this if someone tries to coerce you into paying a fee to claim your prize. Scammers may also dub these advance fees as:
- Sweepstakes taxes
- Customs fees
- Handling or shipping fees
- Service or processing fees
- Withholding fees
- Internal Revenue Service (IRS) settlement fees
Thieves attempt to make such sweepstakes mailers look professional — complete with seals, names, or terms that imply federal government endorsement.
4. Pronouncements about lottery winnings by the federal government
Cash lotteries are operated and run by state governments. If you receive mailers about a federal lottery that is similar to the de facto national lotteries such as Mega Millions or Powerball, it’s a scam.
Scammers may invent organizations such as the “National Sweepstakes Bureau” or pretend to be from a real entity such as the Federal Trade Commission (FTC). The government will never contact you to collect payments for a lottery win.
This is especially true if the correspondence beseeches wire transfers, transfers using Zelle, cryptocurrency, or gift cards.
5. Demands to move money around to receive a large payout
This type of request is similar to a money mule scam. Money mules are people who transfer unlawfully acquired money on behalf of others.
Often criminals task unknowing victims to do this. In some cases, victims may be duped into sending prepaid cards to other victims and perpetuating the fraud.
In 2022, Brad Simpson learned that his father, Paul, was being used as a money mule in an ongoing lottery scam [*]. Despite losing almost all of his life savings, Paul claims to be an optimist and still believes that he'll receive his big prize one day.
Zoom out: Never move money for someone you don't know, even if there's a promised payout at the end. This type of request is often (if not always) part of a lottery scam.
6. Fake checks and overpayments
Scammers sometimes post checks as part of their fake lottery scams. The gist is that they’re sending you a check for the prize money, but you have to send some of it back — for supposed expenses such as fees, insurance, and taxes.
Here’s how these fake check scams work:
- You go to the bank to deposit the phony check.
- The bank may not initially realize that the check is fraudulent and will make the funds available.
- You pay the scammers back the required amount.
- The bank discovers that the check is fake and charges your account.
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7. Claims that upfront payments will increase any odds of winning
Another sign of a sweepstakes scam is when the fraudster claims that paying or buying something will increase your chances of winning. It’s illegal for someone to ask you to pay to increase your odds of winning, according to the FTC.
8. Pressure to respond immediately and in confidence
Scammers want your money. This means that they are going to pressure you to respond quickly and encourage you to keep the win a secret. You'll see verbiage similar to "Act now!" so as not to lose out on the prize, or phrasing that insists it's a limited opportunity.
Thieves use this messaging because they don't want you to pause and consider these requests — their goal is to elicit impulsive responses from victims eager to obtain prizes.
9. The scammer contacts you on social media
Thieves may also reach out through Instagram and Facebook, posing to be from the lottery. If you receive a notification through direct messages (DMs), it’s a scam. No lottery notifies winners via social media.
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10. Mangled grammar in their correspondences
Be wary if grammatical errors are rife in any written correspondence that claims to be from a lottery. Legitimate communications regarding lotteries and sweepstakes are vetted by multiple officials and should appear well-written and professional.
11. Requests for your financial information
Never give your bank account information to someone that you don’t know or to a website that you haven’t verified.
Scammers hope to excise your bank information and other sensitive data from your replies so that they can either steal your identity or your money. Since you can claim your winnings by cash, check, or direct deposits, there’s no need to share any credit card information — ever.
12. Claims that you are the only winner
Lottery thieves tend to also broadcast to others the same message that has been sent to you.
- If you receive such a message via mail, examine the postmark on the envelope or postcard. A bulk rate mailing indicates that several others have also received the same notice.
- Conduct an online search about the lottery (and its language) to determine if others have reported receiving identical messages.
What To Know About Real Contests and Lotteries
The most popular lotteries in the United States are drawn twice a week and feature low odds for winning. No context organizer can pressure you into participating or make it seem like you have no choice in the matter.
As such, keep the following guidelines in mind if you suspect that a scammer has contacted you.
Real sweepstakes contests are free
You'll never have to pay to enter a legitimate sweepstakes contest — and anyone imploring you otherwise is doing so illegally or is part of a scam.
Real sweepstakes are 100% free to enter and win. There's also no way that you can ever pay to increase your odds of winning; any claims that someone can help improve your chances indicate that you are more than likely dealing with a scammer.
You do have to buy a lottery ticket to participate in a local, state, or national lottery; but entering any sweepstakes-style contest is required by law to be free.
You may receive telemarketing calls
One tiresome outcome of participating in contests of this sort is that they may sell your contact information — phone number and email address — to telemarketers. As a result, you might see an influx of spam calls and emails after entering a sweepstakes or lottery.
You don’t have to share sensitive information
Lottery officials may require the last four digits of your Social Security number (SSN) to verify your identity — and you'll have to report winnings of over $600 to the IRS by using Form 1099-MISC [*].
But other than that, you'll never be required to share sensitive information (like your complete SSN) as a sweepstakes or lottery winner.
There’s no guarantee you’ll win
There is never a guarantee that you'll win a contest, sweepstakes, or lottery. Don't believe any contest rhetoric that claims you're guaranteed to win something. This is likely part of a scam, especially when offered in exchange for a payment to improve your chances.
All winnings are taxable
No matter what you've won — a cash lottery prize, a vacation, a car, etc. — it's all taxable [*]. This means that even if you won a $15,000 all-expenses-paid vacation, you will still have to claim and pay taxes on those winnings.
In many cases, you may want to see if you can redeem the cash value of the prize instead. This way, you can enjoy a portion of the prize money while also setting aside the rest for that inevitable tax bill.
Not every state sells lottery tickets online
Online lottery ticket sales are allowed only in select states — and there are five states that don’t sell lottery tickets at all or participate in multi-state games or drawings [*]:
- Alabama
- Alaska
- Hawaii
- Nevada
- Utah
Research your state's sweepstakes and lottery laws before you enter a contest. When you buy lottery tickets online, ensure that you’re using official websites and that your state allows online sales.
Multi-state games don’t contact winners by phone
Representatives from giant, multi-state jackpot games will not call up winners to have them claim their prizes. It's up to the winner to come forward and claim any winnings. If you participate in a large lottery, keep your tickets on hand, pay attention to drawings, and avoid falling for such calls.
You must know the host of any contest you enter
Ensure that you know the host, agency, or administrator of any contest or sweepstakes that you enter. This way, you'll know whether any correspondences may be from the official host.
For example, Publishers Clearing House (PCH) is a prominent sweepstakes administrator. If you've entered one of their sweepstakes, a call from a different administrator should immediately tip you off that it's a scam.
Pay attention to contest rules
Read the fine print. Always pay attention to and understand the rules and guidelines of any contest you enter. For example, it is recommended that you know how contest administrators will contact you and how to redeem your prize.
If you know exactly what to expect when winning entries are being drawn, you'll be fully aware if a scammer attempts to reach you.
Use a dedicated email address
Consider creating a dedicated email address if you regularly apply for or enter sweepstakes contests. This way, you'll know that all correspondences to that email address may be related to your entries (or administrators selling your data), and any emails to your primary email address are likely part of a scam.
Don’t Fall for the Promise of a Windfall
Have you encountered a lottery, sweepstakes, or fake prize scam? Cease communication with the scammer and report the incident to local law enforcement with any evidence that you have — emails, phone numbers, receipts, or mailers.
Here’s how to report various types of lottery scams:
- Call Publishers Clearing House (PCH) at 1-800-392-4190. An official PCH employee can confirm whether you’ve received real or fraudulent communications. In case of a scam, use this form to file a report. PCH will then forward the report to the FTC.
- Report fake checks to the U.S. Postal Inspection Service (USPIS). Fill out this form or call 1-877-876-2455 to file a report.
- Send details of the scam to ReportFraud.ftc.gov if you’ve sent money to a scammer. The FTC can help you recover your money and identity, as well as alert other potential victims.
- File an official report at IdentityTheft.gov if you shared sensitive data with the scammer. This will help you dispute future fraudulent transactions and repair your credit in case of identity theft.
- Report the lottery scam to econsumer.gov to help consumer protection agencies spot trends, prevent future scams, and help people shop online safely.
- If you cashed a fake check, report it to your bank. In some states, depositing a fake check with the intent to defraud can result in a misdemeanor or even a felony charge [*]. If you’re the victim of a scam, you’re unlikely to face jail time or fines, but you may need to obtain legal advice.
If you unwittingly shared your SSN, credit card, or banking information with a thief, consider signing up for Identity Guard.
An Identity Guard case manager will guide you through the fraud remediation process and help you recover lost assets. In addition, your case manager can help you process forms and make phone calls on your behalf.
