How to Avoid Lottery and Sweepstakes Scams: Key Tips and Warning Signs

Everyone loves the idea of a life-changing lottery win. Scammers know this, which is why they use lottery and sweepstakes scams to get money or personal banking information from people. In fact, lottery and sweepstakes scams are one of the most common forms of consumer fraud perpetrated in the United States.  

Every year, thousands of people report getting scammed by fraudsters posing as lottery or sweepstakes software operators. In this post, we will discuss all you need to know about lottery and sweepstakes scams and what to do to protect yourself against them. 

• Lottery and sweepstakes scams typically involve fraudsters contacting victims to inform them about winning a valuable prize that they haven’t really won. 
• Lottery and sweepstakes scam victims are contacted via various methods and tactics including text messages, phone calls, mail, or social media.
• Most lottery frauds follow a similar format which typically involves asking you to pay money upfront to claim your prize or send your personal banking information. 

What Are Lottery and Sweepstakes Scams?

Let’s start by exploring what are sweepstakes or lottery scams, and the warning signs to look out for. 

Lottery and sweepstakes scams can take many forms, but they typically involve fraudsters contacting victims to inform them about winning a substantial sum of money or a valuable prize that they haven’t really won. 

Victims may be contacted via text message, phone call, mail, or social media about a big lottery win. In some cases, cheques are even sent as proof that your win is on the way. Victims are then asked to provide their bank account number and personal banking information to prove their identity as the real winner and receive their prize. 

This information is then used to steal their identity or money. In other instances, victims are asked to wire money to cover bogus costs like insurance, taxes, or bank fees before they can get access to their winnings. 

Unfortunately, you will not receive a prize after payment has been made (or your bank information has been sent). That’s because there was no lottery win in the first place and it was just a scheme to scam you into sending money. In some cases, some money is sent, but it is typically far less than what was promised. 

Recognizing Sweepstakes and Lottery Frauds

A lottery or sweepstakes scam isn’t very difficult to spot. In fact, most people only get scammed because they’re ignorant about how these scams work or they are simply too eager to claim their prize money. Most lottery frauds follow a similar format and are characterized by some red flags that are relatively easy to spot. Here are some warning signs to look out for to avoid getting scammed. 

You Can’t Recall Entering a Draw or Buying a Ticket

Sweepstakes and lotteries are contests where you get to earn rewards based on chance. This means you don’t really have to play a skill-based game to win money. However, you still have to signify interest in some way. This may involve buying a lottery ticket or filling out a form to enter a sweepstakes.  

Legitimate lotteries don’t give random people money. So if you don’t recall entering a draw or buying a lottery ticket at any point, it is most likely fraudulent. In most cases, lottery agencies don’t even contact you directly to claim your winnings. 

The winning numbers are published in a newspaper, TV program, or social media and you have to verify that it matches the number on your ticket. In summary, if you receive phony win notifications that you won a contest that you never entered (sometimes from a foreign country that you have never visited), it is most likely not true. That is how sweepstakes and lottery scams work.

They Create a Sense of Urgency 

In prize scams, the fraudster will typically ask you to respond quickly to claim your prize so you don’t miss out. This is a common tactic to distract victims of many sweepstakes scams from considering the offer and investigating further to determine if it is real or fraudulent. 

Again real lotteries and sweepstakes are not super-eager to give you your money. They’ll typically wait for you to claim your prize and not the other way around. Although they do have deadlines, this will be stated in the terms and conditions of the offer which will be publicly available and verifiable. Real lotteries give people some months or even up to a year to claim a legitimate prize. 

They Demand Advanced Payment to Grant You Prize

The most common red flag in a lottery or sweepstakes scam is when the so-called lottery officials tell you to pay fees in advance to claim your winnings. They might call this fee a different name such as a tax, shopping cost, service charge, or an undefined withholding amount. Victims are often asked to pay this in advance via money transfer services like Western Union, PayPal, a Bitcoin ATM, or prepaid gift cards before awarding sweepstakes prizes. 

Legitimate sweepstakes and lotteries do charge taxes and other fees, but they don’t ask you to send the money in advance. The taxes are deducted directly from your winnings and the balance is sent to you after the deductions. 

You’re Asked to Keep Your Winnings Confidential

Legitimate sweepstakes and lottery contests are always public. They’re announced beforehand, with all the terms and conditions clearly stipulated. They can also be verified easily as they’re run by legitimate sweepstakes sponsors fully licensed by the National Sweepstakes Bureau, Federal Trade Commission, and other relevant agencies. Sweepstakes scam artists often instruct their victims to keep their winnings confidential for one reason or the other.

They may use high-pressure tactics like loss of the prize or threats of legal action if you tell anyone about your winnings. This is counterintuitive since sweepstakes are often for promotional purposes and they want all the publicity that they can get. The high-pressure tactics are simply to manipulate you into complying with their demands without investigating. 

They Use Generic Information 

To enter a sweepstakes, you’re typically asked to provide your contact details including your full name, mailing address, and phone number. In communications with a legitimate agency, they will typically address you with the full name you have provided and not by generic terms like “sir” or “madam”. Also, lotteries and sweepstakes are run by legitimate companies and government agencies. They will not contact you with random free e-mail accounts like Google or Yahoo Mail. The domain email and name of the agency will be used, which can be easily verified if you do some digging. 

You Are Asked to Send Money Back

A common tactic used by fraudsters is to send their victims dubious checks in the mail for a large sum of money and ask them to send back a portion as processing fees. They may also claim the victim has been overpaid and will need to send some part of the money back. 

Although some legitimate lotteries pay via check, it typically follows some official interactions with the agency. Also, legitimate agencies won’t overpay you or ask you to send money to a third party after depositing it. This is a common tactic used by scammers for cashing fraudulent checks or receiving illicit funds.

Note that your banks can still clear a check and make funds available to you even though it is fake. It typically takes up to 10 to 14 days for a check to clear. This means the check could still bounce after you have received the money, meaning you’ll be owing the amount you sent to the scammers. 

Distinguishing Legitimate Sweepstakes from Scams

The key to distinguishing between a legitimate sweepstakes sponsor and a scam is to learn as much as you can about real sweepstakes. Investigating concepts like sweepstakes vs contests and sweepstakes vs raffles will help you understand how legitimate sweepstakes are run so you don’t fall for fake ones. The following tips will help you distinguish between legitimate contests with real prizes from scams: 

• Real sweepstakes and lotteries require you to enter to win: Lotteries and sweepstakes don’t pay out money randomly to people. To win any money, you have to have entered the contest in some way either by completing a task, filling out a form, or purchasing a ticket. 
• Real contests are not secret: In fact, federal law mandates contest promoters to be transparent. This means they have to disclose all the terms of the contest, the odds of winning, how to redeem your prizes, and any other important details. 
• You don’t have to pay to participate in sweepstakes: One of the main qualities of sweepstakes is that you don’t have to pay any money to participate. While lotteries do require ticket purchases or donations, this is a small token paid to enter the contest. You don’t have to pay any money after winning except the tax, which is deducted from your prize winnings and not paid by you.
• Legitimate sweepstakes and lotteries don’t guarantee wins: Lotteries and sweepstakes are luck-based contests. This means there’s no guarantee that you’ll win prizes. Any contest that guarantees that you’ll win a prize once you send your private information or complete a task is most likely not legit. 

Methods Used by Sweepstakes Scammers

Scammers use different tactics to contact their victims. While email used to be the norm, they have now evolved into using non-traditional methods like social media messaging and website pop-ups to send a win notification. Some of the common methods they use include: 

• Email phishing: Scammers may send you an unsolicited email announcing your win. These emails typically impersonate government agencies or well-known companies. However, it could also be from a made-up name. Note that lottery emails from a free mail service like Google Mail or Yahoo Mail are likely fake. Receiving bulk emails from a lottery agency is also not a good sign. Sweepstakes scams send thousands of people the same email with the hope of getting some of them. For a legit lottery prize, you should receive direct mail sent to you directly.
• Direct mailings: Scammers may mail physical letters or checks directly to your home. These sweepstakes scam letters typically include forged logos and signatures so they appear legit. Legitimate sweepstakes mailings often use first-class postage.
• Social media messages: Scammers target people on popular social media platforms like Facebook, Instagram, X, and TikTok where they can send win notifications directly through these channels. A common trend in recent times is to impersonate celebrities or popular creators to inform you about winning a giveaway before demanding money or your financial information. 
• Phone calls: This remains one of the most common ways that scammers send their victims win notices. You may receive automated robocalls or even real calls from an actual person claiming to be an agent of a lottery or sweepstakes company. The common tactic is to keep you on the phone while you withdraw money and wire to them or send Bitcoin to an account. This is meant to distract you from speaking to anyone or verifying their claims. 
• SMS or WhatsApp messages: You may receive mobile messages from scammers with instructions on how to claim your lottery win. These messages often include links that redirect you to a website where they can steal your personal information. 
• Website pop-up ads: Sometimes while browsing on a website, you may see ad popups prompting you to spin a wheel to win or simply announcing you have won a prize. Sweepstakes and lotteries don’t work this way. 

Protecting Yourself from Sweepstakes Scams and Lottery Fraud

Anyone can be the target of a sweepstakes or lottery scam. While fraudsters often profile and target vulnerable people such as the elderly or out-of-job folks desperate for a big break, they can target pretty much anyone, which is why you should be careful not to fall for it. Here are some tips to protect yourself: 

• Always verify legitimacy: Although lotteries and sweepstakes are real, always be skeptical of unsolicited messages claiming you have won, especially when you didn’t enter a lottery to begin with. Contact the official lottery or sweepstakes organizers directly instead of relying on information provided by the supposed lottery agency that contacted you. Don’t believe their claims not to tell anyone about your win.
• Never pay upfront (or pay at all): Legitimate lotteries and sweepstakes don’t ask you to pay an upfront fee to claim your winnings. Even if you have been sent a check, do not send money to a third party for a lottery win. 
• Avoid sharing your personal information or banking details: Do not send your personal information or banking details to unknown individuals or organizations. Scammers may use this information to steal your identity or commit fraud. 
• Trust your instincts: Most victims get a feeling that the so-called lottery or sweepstakes win is too good to be true. If you did not enter a contest, there’s no way you’ll win money from it.
• Educate yourself: Fraudsters prey on ignorance. Learn as much as you can about how sweepstakes work and how to protect yourself against sweepstakes and lottery scams. 

Actions to Take if Scammed

Scammers typically ask you to pay in ways that make it almost impossible to recover your money. However, you may still be able to get your money back if you act quickly. Some of the actions you can take are highlighted below: 

• If you paid with a credit or debit card, you can contact the card issuer to report the fraudulent transaction and request a reversal. 
• If the scammer made an unauthorized transfer from your account using your private information, you can contact your financial institution to report the transaction.
• If you send a gift card, you can contact the company that issued it to inform them it was used in a scam. They may be able to refund your money if you act fast enough. Just make sure you keep the receipt and the card itself.
• If you sent a wire transfer through your bank, contact the wire transfer company or your bank to request a possible reversal.

The most important action to take when you have been scammed is to report it to the appropriate authorities such as the Federal Trade Commission, the National Sweepstakes Board, and your local consumer protection agency. Even if they’re unable to reverse your payment, they might take action to shut down the sweepstakes scam and protect others from falling victim to these scams.

Conclusion

Scammers use a wide range of deceptive methods to dupe unsuspecting victims. To protect yourself and your family members, you try as much as possible to educate yourself. It helps when you know about how sweepstakes work and can identify the best sweepstakes examples to get involved with. The most important thing is to avoid sharing your personal information or wiring money to claim a lottery win or any other gift.