If you receive a call or message claiming that you hit the jackpot or scored big in a sweepstakes, proceed with extreme caution. Fraudsters whip up excitement and hope with the announcement of a windfall, then convince people that they have to pay (right away!), click a link, or share personal information to get their prize. Luckily, lottery, sweepstakes, and prize scams are easy to avoid if you know what to watch out for, such as any request for upfront payment.
How would your life change if you won a million dollars, a luxury car, or even a brand-new iPad? The lure of lotteries and sweepstakes is powerful, enticing us with hope and fantasies for a better future.
Unfortunately, that lure is one that fraudsters are all-too-willing to take advantage of. Last year alone, Americans lost $348 million to prize, lottery, and sweepstakes scams, according to the Federal Trade Commision (FTC).
On average, individuals were robbed of about $1,000 each, but some forked over much larger amounts, strung along for years by scammers who claimed they needed to pay more and more to get their prize.
The prize scam playbook
Fraudsters may reach out with a phone call, text message, or letter announcing exciting (but completely false) news: You’ve struck it rich in the lottery, won a vacation in a sweepstakes, or scored a discount code to a local store.
They’ll make themselves seem trustworthy—by presenting an official-sounding name like National Sweepstakes Bureau or claiming to represent a well-known company or a government-supervised lottery.
Then they’ll inform you that to get the prize, you have to pay money, provide your financial account information, or click on a link. Regardless of how perfectly you follow their instructions, no prize will ever actually materialize.
That’s because you’re far from lucky: These fraudsters are just after your money or personal information that they can use to commit identity theft or financial fraud.
Often, they’ll go to great lengths: If you get suspicious and hang up the phone, for example, they may call you back repeatedly. And when they do convince you to send them money to claim your prize, they’ll keep the communication going, asking for larger amounts. Sometimes, prize scammers even turn victims into money mules.
Older adults are disproportionately targeted by prize scams
Older adults are especially vulnerable to prize, lottery, and sweepstakes scams. The Better Business Bureau reported that 72 percent of the prize, lottery, and sweepstakes scams submitted to their Scam Tracker from 2019 to 2022 came from people over the age of 55. Living a more isolated lifestyle and being relatively financially stable may make this population more vulnerable, while cognitive decline can also factor in.
Warning signs of a prize, lottery, or sweepstakes scam
If you see one of these red flags, cut off communication immediately until you’ve had a chance to do further research.
You “won” without entering. If you didn’t fill out a form to join in a sweepstakes (usually offered by companies for promotional purposes) or pay to enter a lottery (only legal when run by states or some charitable organizations), then you couldn’t have been selected for a prize. If you do enter sweepstakes regularly, keep a list of them and make sure you understand their rules.
You’re invited to play a foreign lottery. It’s illegal for United States residents to enter foreign lotteries, so if you’re asked to play one, it’s most likely a scam.
Someone requests personal information. No real lottery or sweepstakes organization will ask for your financial account details outright, or for sensitive personally identifiable information (PII), such as your Social Security number.
You have to pay to claim your prize. Scammers may say that, in order to get your winnings, you need to pay for something like “shipping and handling,” “taxes,” “processing fees,” or “customs duties.” Alternatively, they may mail you a check and ask you to send some of the money back to them. Their check will bounce, and your bank will expect you to repay the funds.
You’re able to buy better odds. It’s illegal for companies to require people to pay or purchase an item to participate.
There’s a big rush to “act now.” Scammers will try to rev you up about your big win and rush you to send them money or provide personal information right away. They don’t want to give you time to calm down and think more logically.
It’s a secret. Crooks encourage you not to tell anyone about the prize. If you share the news with friends and family, someone might help you realize it’s all a hoax.
Staying safe from prize scams
Share these tips with loved ones—especially the older people in your life.
Don’t click on web links. Scammers may instruct you to click on a link that will either download malware to your device or ask you for personal information that can be used to perpetrate identity theft. Simply delete the message without responding.
Find out if you really won. If you’re notified of a lottery win, call the North American Association of State and Provincial Lotteries at 440-361-7962. If a sweepstakes is in question, look up a phone number for the company that contacted you (if it really exists), and reach out to them. The frequently impersonated Publishers Clearing House can be reached at 800-392-4190.
Research the claim. Do a general web search and check the BBB Scam Tracker for reports of other people receiving similar messages. Type in the company, contact person’s name, or phone number, perhaps adding terms like “scam” or “complaint.” If you received snail mail, check the postmark for the words “bulk rate,” as that would mean the same letter went to a large number of people.
Don’t send money. Scammers often ask victims to pay them via wire transfer or to use gift cards, payment apps, or cryptocurrency. All these methods make it difficult to determine who received the funds.
Never share personal or financial information. If someone requests these types of details, they’re likely looking to steal money from your accounts or commit identity theft.
How to report prize scams
First of all, if you’re an Allstate Identity Protection member and you suspect that your personal information has been compromised or used by fraudsters, contact us right away. Our specialists can look into the matter and help you get it resolved. Plus, one and all can access our guide explaining what to do if you gave your information to a scammer.
Also consider taking the following steps, which can protect others from being targeted with the same hoax:
Contact your local law enforcement.
Notify the Federal Trade Commission at 1-877-FTC-Help or ReportFraud.ftc.gov.
Report the crime to your area Better Business Bureau (BBB), or the BBB Scam Tracker.
Reach out to companies or agencies that the scammer used to pull off the scheme. For example, if you received notice of your “win” by mail, contact the U.S. Postal Inspection Service at 1-877-876-2455 or uspis.gov.
