WEST MICHIGAN — Sweepstakes and lottery scams resulted in higher financial losses during the COVID-19 pandemic compared to the previous three years, according to research announced Thursday by the Better Business Bureau.
BBB warns consumers to never pay money to claim a prize, as it is likely a scam.
The research is an update of BBB’s 2018 in-depth investigation.
Financial losses reported to the Federal Trade Commission (FTC) and the FBI’s Internet Crime Complaint Center increased by more than 35% in 2020, according to the BBB.
The report highlights a Kalamazoo-area man in his 80s who was contacted by scammers soon after his wife died last year.
He was told he had won second place in a popular sweepstakes, winning $2.5 million, a brand-new luxury car and gold medallions.
When the man began talking to the scammers daily on the phone every day – even after his daughter changed his phone number – he withdrew money from his retirement account and opened a separate account.
He sent a total of $72,000 in cash to an address in Mississippi before his daughter cut off contact between him and the scammers.
BBB says older adults are the main target for sweepstakes scams, representing 72% of fraud reports for this type of scam over the past three years.
Of the older consumers who were targeted, 91% reported that they lost money.
Adults over 55 lost an average of $978 while those 18 to 54 lost an average of $279, according to BBB Scam Tracker reports.
“The people most affected by these scams are usually the ones who can least afford to lose the money,” said Phil Catlett, president of the Better Business Bureau Serving Western Michigan. “The promise of a life-changing amount of money can be overwhelming. Once people start realizing all the ways their life will change, it is hard for them to say no when the scammer starts asking for money.”
Sweepstakes scammers reach out through phone calls, email, social media, notices in the mail and text messages.
They may impersonate well-known sweepstakes like Publishers Clearing House or a state lottery.
The “winner” is told to pay taxes or fees before the prize can be awarded.
People increasingly are asked to buy gift cards to pay these fees, but they also may be asked to pay via wire transfer or bank deposit into a specified account, or even cash sent by mail.
In reality, the prize does not exist.
BBB’s tips for identifying fake sweepstakes and lottery offers:
- True lotteries or sweepstakes don’t ask for money. If someone wants money for taxes, themselves, or a third party, they are most likely crooks.
- You have to enter to win. To win a lottery, you must buy a lottery ticket. To win a sweepstakes or prize, you must have entered first. If you can’t remember doing so, that’s a red flag.
- Call the sweepstakes company directly to see if you won. Publishers Clearing House (PCH) does not call people in advance to tell them they’ve won. Report PCH imposters on their website . Check to see if you have actually won at 800-392-4190.
- Check to see if you won a lottery. If you are told you’ve won a lottery, call the North American Association of State and Provincial Lotteries at 440-361-7962 or your local state lottery agency to confirm it.
- Do an internet search of the company, name, or phone number of the person who contacted you. Check BBB Scam Tracker to see if other consumers have had similar experiences.
- Law enforcement officials do not call and award prizes. Verify the identity of the caller and do not send money until you do.
- Talk to a trusted family member or your bank. They may be able to help. You also can call your local BBB office for help in identifying a scam.