BBB study: Sweepstakes, lottery and prize schemes devastate thousands with evolving tactics

It’s one of the oldest scams in the book, but sweepstakes, lottery and prize schemes continue to devastate victims financially and emotionally with ever-evolving methods. A new study by Better Business Bureau says these frauds concentrate on seniors, targeting them by direct mail, media, cold calling, social media, text messages and smartphone pop-ups.

The study notes these scams bilked $117 million out nearly 500,000 people in 2017 alone, with actual victims and losses likely numbering much higher. Seniors are the most frequent target and suffer the largest losses by far in these scams, which the report found commonly originate in Jamaica and Costa Rica.

Among the report’s key findings:

  • The majority of lottery or sweepstakes scam victims are between 65 and 74 years old. Among that age group, people who recently experienced a serious negative life event, and who expect their income to remain steady or decline, are even more likely to be victimized.
  • Sweepstakes/lottery fraud can strike through many channels — phone calls, text messages, pop-ups on a smartphone’s Internet browser, social media and mailings.
  • Jamaica is a major source of “cold calls” where the amount of money generated by lottery fraud has resulted in gang wars between rival fraud groups, leading to a dramatic spike in violence. More than 95 percent of reported fraud in Jamaica involves lottery or sweepstakes scams.

BBB offers the following tips for consumers to avoid being caught in lottery or sweepstakes fraud:

  • True lotteries or sweepstakes don’t ask for money. If they want money for taxes, themselves, or a third party, it is most likely a scam.
  • Call the lottery or sweepstakes company directly to see if you won. Publishers Clearing House (PCH) does have a sweepstakes but does not call people in advance to tell them they’ve won. Report PCH imposters to their hotline at 800-392-4190.
  • Talk to a trusted family member or your bank. They may be able to help you stay in control of your money in the face of fraudster pressure.