Lottery scams are one of the most prevalent types of scams and scammers cheat people out of millions of dollars each year by tricking people into sending money to the scammers after being told that they have won a lottery, but are required to pay some fees or taxes in order to collect their prize.  According to the Federal Trade Commission (FTC) Americans lost $351 million to lottery scams last year.  It is hard to win any lottery. It is impossible to win one that you have not even entered and yet scam artists, the only criminals we refer to as artists have found that it is extremely lucrative to scam people by convincing them that they have won various lotteries.

Most lottery scams involve the victims being told that they need to pay taxes or administrative fees directly to the lottery sponsor; however no legitimate lottery requires you to do so.  As with many effective scams, the pitch of the scammer seems legitimate. Income taxes are due on lottery winnings, but with legitimate lotteries they are either deducted from the lottery winnings before you receive your prize or you are responsible for paying the taxes directly to the IRS. No legitimate lottery collects taxes on behalf of the IRS from lottery winners.  Other times, the scammer tell the “winners” that in order to collect their prizes, they need to pay administrative fees. Often, the victims are told to send the fees back to the scammer by prepaid gift cards. Again, no legitimate lottery requires you to pay administrative fees in order to claim your prize.

Eighty-one year old Navy veteran Riley Williams who has both Parkinson’s disease and dementia received a call from a scammer seven months ago telling him that he had won a lottery he had not entered, but he needed to pay taxes and fees before he could collect his winnings.  For seven months the scammers convinced him time and time again to pay these phony fees and taxes by way of gift cards before he became aware that he had been scammed.  Ultimately he lost $100,000.

TIPS

As I have often told you, it is difficult to win a lottery you have entered.  It is impossible to win one that you have not even entered.  You should always be skeptical about being told that you have won a lottery you never entered.  It is also important to remember that it is illegal to play foreign lotteries except when you are actually present in the other country so if you are told that you have won the infamous Jamaica Lottery, it is absolutely a scam.

While it is true that income taxes are owed on lottery winnings, legitimate lotteries never collect tax money from winners.  They either deduct the taxes from the winnings or leave it up to the winners to pay their taxes directly to the IRS.  You also should never pay a fee to collect a legal lottery prize.

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