Posts Tagged: ‘phony lotteries’

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

December 29, 2013 Posted by Steven Weisman, Esq.

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.

Scam of the day – August 28, 2013 – San Diego lottery scam

August 28, 2013 Posted by Steven Weisman, Esq.

Lottery scams are one of the most effective scams.  Forgetting that it is hard enough to win a lottery that you have entered and impossible to win one that you have not entered, many people are victimized each year by phony lotteries.  The basis for the scam is pretty much the same although the specifics may differ from case to case.  You are told that you just won a lottery, but that you have to pay fees or taxes in order to claim your prize.  The victims pay the fees and taxes demanded and then never see any winnings.  One of the new variations of the lottery scam has been turning up in San Diego where recently a retired couple received a phone call telling them that they had won a multimillion dollar lottery, They then received  a fax that appeared to carry the official seal of San Diego County that informed them as to the taxes they would need to pay in order to claim their prize.  Trusting the official looking document, they not only wired $20,000 to the scammers, they also provided their Social Security numbers and bank account information which the identity thieves used to steal the rest of their bank account.  This scam happened in San Diego, but similar scams are being done in other parts of the country.

TIPS

Don’t let greed blind you.  You don’t win lotteries that you have not entered and no legitimate lottery requires you to pay fees or taxes to them in order to claim their prize.  Income taxes are owed for lottery winnings, however either the lottery sponsor deducts the taxes before you receive your prize or they give you the entire prize and you are responsible for paying the taxes.  They never collect taxes on behalf of the IRS.  With today’s technology it is easy to copy and counterfeit any seal or logo so if you receive a document that appears to be from an official source, you cannot rely on it.  If it asks for personal information, do not provide it unless you have independently confirmed that the communication is legitimate.

Scam of the day – January 2, 2013 – Phony sweepstakes and contests

January 2, 2013 Posted by Steven Weisman, Esq.

January is a big month for phony sweepstakes and contests although, quite frankly, every month is a big month for such scams, however, January leads the way because many legitimate sweepstakes and contests declare their winners in January.  Often the scam starts when you receive an email or a regular mail communication congratulating you on having won a contest or sweepstakes that you never even entered.  You may next be told that you are required to provide some personal information, such as your Social Security number in order to claim your prize, or you are told that you have to pay the sweepstakes sponsor income taxes on your winnings or you are required to pay some administrative fees in order to claim your prize or perhaps, you even receive a bank check that is the first installment of your winnings; you are then told to deposit the check and pay taxes or administrative fees back to the sweepstakes sponsor from the first check.  In all of these scenarios, you are in serious jeopardy of identity theft or being scammed out of your own money.

TIPS

The first thing to remember is that you never win a contest you did not enter.  That, right away, should be enough for you to recognize that the contest is a scam.  Many of these phony lotteries appear to be foreign.  Participating in foreign lotteries is a violation of federal law and, again, the chances are pretty substantial that you are hearing from a domestic or foreign scam artist, not from a legitimate foreign contest sponsor.  If you provide your personal information, such as your Social Security number to the scammer, you will end up a victim of identity theft.  It is true that lottery winnings are subject to income tax, but the sponsor of a legitimate contest either deducts the taxes from your winning directly  before you receive your money or,  most commonly, they give you your winnings and it is your responsibility to pay the income taxes.  They don’t collect income tax payments from you on behalf of the IRS.   As for that legitimate looking bank check that you might receive, it is a forgery.  Federal law requires banks to give provisional credit to cashier’s checks or other forms of bank checks by the next business day after the check has been deposited.  However, this credit to the depositor’s account is merely provisional and when the check eventually bounces, which may take weeks, the victim loses the credit for the money he thought he was depositing into his account as well as the money that he paid from his own bank account to the scammers.  Most people don’t know what provisional credit is so when it appears to them that the deposited check has “cleared” they think they are safe when they most assuredly are not.  If you want to investigate a check’s legitimacy, contact the bank that it appears to be written from and inquire as to whether it is legitimate.  You will find that it is not.

Scam of the day – July 26, 2012 – Olympic scams part 2

July 26, 2012 Posted by Steven Weisman, Esq.

Phony lotteries have long been a staple of scammers and the Olympics have already given scammers an opportunity to scam people through emails that appear to come from legitimate companies, such as Coca Cola that are also advertisers at the Olympics.  The phony emails look very real.  Unfortunately it takes little forgery talent to make an email communication look like it is a legitimate communication from a legitimate company.  The phony emails are telling unsuspecting victims that they have won lotteries tied to the Olympic games as promotions by the companies.  Then comes the hook.  The scammer posing as the legitimate company asks you to wire them processing fees, transfer charges or tax payments for a prize you will never receive.

TIPS

You can’t win a contest that you never enter.  Legitimate companies do not require processing fees or transfer charges and income taxes are either deducted from your prize or you pay them directly to the IRS.  If you have the slightest thought that the contest might be real, contact the real company at a telephone number that you know is accurate to inquire.