The recent 1.6 billion dollar Megamillions lottery prize focused the attention of the country on winning this huge lottery, which finally was won by one person last week. 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. 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 or Green Dot MoneyPak cards. Prepaid cards are a favorite of scammers because they are the equivalent of sending cash. They are impossible to stop or trace. Again, no legitimate lottery requires you to pay administrative fees in order to claim your prize.I have been reporting to you for years about the infamous Jamaican lottery scam by which many Americans, mostly elderly, have been scammed out of money after being told that they have won the Jamaican lottery.  The scam begins when the victims receive a telephone call informing them that they have won this non-existent lottery that they never entered and are then pressured to pay “fees” and “taxes” before their winnings can be sent to them. This scam has been going on since the 1990s. The Better Business Bureau (BBB) recently issued a new report entitled “Sweepstakes, Lottery and Prize Scams: A Better Business Bureau Study of How ‘Winners’ Lose Millions Through an Evolving Fraud.” In its report, the BBB indicated that a half a million people in the United States and Canada lost $117 million dollars to these scams. As startling as these figures are, they are probably understated as many victims of the scam fail to report that they have become victims. While many people are familiar with the Jamaican phony lottery scam, increasingly the scam is originating in Costa Rica as well, but the story is still the same. The victim is notified of having won a lottery they have not entered and then pressured to pay continual fees and costs in order to claim their prize which never comes.
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.
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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