Lottery and Sweepstakes Scams: If You Must Pay, It's Fake

“Congratulations, you’ve won!” It’s an exciting thing to hear, and that excitement is exactly what sweepstakes scams rely on. The FTC says you can spot these scams by what comes next: the “winner” is asked to pay money or give account information to get the prize. If you pay, the money is gone and the prize never existed.

Prize scams usually arrive by phone. For other common calls, see our guide to phone scams.

How do prize and lottery scams work?

You get a call, email, text or letter saying you won a sweepstakes, lottery or prize: cash, a new car or an iPad. The FTC describes the tactics scammers use to make the win feel real:

• They pretend to be official. They make up names like a “National Sweepstakes Bureau,” or claim to be from a real agency like the FTC. The government won’t call you demanding money to collect a prize.
• They use famous names. They pose as well-known companies that run real sweepstakes.
• They make you feel special. In reality, the same call or letter went to many people.
• They rush you. “Limited time.” “Act now.” They don’t want you to stop and think.
• They tell you how to pay. Wire transfers, payment apps, cash, gift cards or cryptocurrency, because those payments are hard to trace and reverse.

EXAMPLE — SCAM

Today 1:15 PM●●● ▮

Incoming call (876) 555-0121

Caller: Good afternoon! This is Robert Lane with the National Sweepstakes Prize Center. You’ve been selected as our second-place winner — $350,000 and a new car!

Caller: Before we can release the prize, federal law requires you to prepay the taxes of $1,950. You can take care of it today with prepaid cards from any pharmacy. Don’t share this with anyone until the prize is delivered — we have to protect the winner’s identity.

Is it a scam if you have to pay to claim a prize?

Yes, every time. The FTC lists three signs of a prize scam:

1. You have to pay to get your prize. Real prizes are free. Fees for “taxes,” “shipping and handling,” “processing” or “customs duties” mean you’re dealing with a scammer.
2. You have to pay to increase your odds of winning. Real sweepstakes are free, and winning is by chance. It’s illegal to ask you to pay to improve your odds.
3. You have to give financial or personal information. There’s no reason to give your bank account, credit card or Social Security number to claim a prize.

And remember: you can’t win a contest you never entered.

What about calls claiming to be from well-known sweepstakes?

Scammers love famous names because they sound trustworthy. The FTC says no real sweepstakes company will contact you asking for money to claim a prize. If you’re unsure, look up the company’s real contact information yourself and contact it directly. Don’t expect the caller to give you the real number.

Foreign lotteries are a related trap. The FTC says messages about a foreign lottery are almost certainly from a scammer, and it’s illegal for U.S. citizens to play a foreign lottery. Buying a ticket only leads to more fake offers.

Prize checks are another trick. A “winner” receives a check and is told to send back money for taxes or fees. It can take the bank weeks to discover the check is fake, and then you owe the money back. Read about fake check scams.

Why do scammers keep calling back?

Once you respond, or pay even once, your name becomes more valuable to scammers. You may get calls for “additional taxes,” “insurance” or “release fees,” each with a new excuse. Later, you might hear from someone offering to recover your losses for a fee, which is another scam. See recovery scams.

To cut down on these calls:

• Hang up and don’t press any buttons.
• Use call blocking. The FTC recommends call-blocking tools from your phone carrier or a call-blocking app.
• Don’t engage. Every answered call tells scammers your number works.

If you’re asked to pay with gift cards, that alone proves it’s a scam. See gift card scams.

Where do you report a prize scam?

Report it to the FTC at ReportFraud.ftc.gov. If you already sent money, contact the company you used to pay right away. Our first-hour checklist after a scam covers each payment method, and our guide to reporting a scam call lists other places to report.