Scam of the day – December 29, 2013 – Phony lottery scam

Phony lotteries continue to be one of the most common scams and with good reason.  Each year Americans lose more than 120 million dollars to phony lotteries.  The appeal of lotteries are obvious.  For a small price you get a chance to win a huge amount of money.  With phony lotteries the initial appeal is even greater because when you are notified by phone, email or snail mail that you have won a phony lottery, you haven’t even had to pay for a lottery ticket.  What could be better than that?  Of course, with phony lotteries, you do end up paying large amounts of money to claim your “winnings,” however ultimately, you end up with nothing.  Actually, you end up with less than nothing because you lose your own money in your attempt to claim your prize.  Generally, the scams start with the initial notification that you have won a lottery that you never entered.  When you go to claim your prize, you are then told that you need to pay taxes or processing fees before you can get your prize money.  Of course after you have made these payments, you never get anything except a lesson in life.

Some of the emails that you receive informing you of your lottery winnings are written quite well and appear to be quite official and convincing.  Recently, however, I received a notification in my email that was so poorly written that it was an insult to true scam “artists.”  The notification I received merely stated, “You won the lottery. Contact me for details.”  There was no description of what lottery this referred to nor was there even a signature of anyone.  It is hard to imagine anyone falling for this scam, but unfortunately, some people will indeed end up becoming a victim of this.

TIPS

Whether it is the Jamaican Lottery which is a scam that has been stealing millions of dollars from Americans in recent years or any other phony lottery, it is important to remember that you do not win a lottery that you have not entered.  It is also important to remember that although lottery winnings are subject to income taxes, you will never be asked to pay your income taxes to the lottery sponsor.  Either the lottery sponsor will deduct the taxes from your winnings, as is done with state sponsored lottery winnings or you are responsible for paying income taxes on the winnings directly to the IRS and your state department of revenue.  Never will a legitimate lottery collect taxes from winners.  Neither will they charge you administrative fees that you must pay before you can collect your winnings.  Don’t get blinded by greed.