Foreign Lottery Scam Issues False Winning Notifications

CUNA Mutual has issued a fraud alert regarding a foreign lottery scam that appears whenever a large multi-state “Power Ball” jackpot hits the news.

How the scam works
The victim receives either an email or letter from a fictious lottery organization claiming that the recipient is the winner of a lottery or sweepstakes in a distant country. The notification is usually included with a cashiers or post-dated check for the total amount of the winnings with the strict instructions to not deposit the check until he/she contacts the official claims office for verification purposes.

Once the victim contacts the claims office, he/she is asked to transfer or wire either a cashier's check or money order from their account to pay for so-called taxes and handling fees. Once the money is transferred, the victim is allowed to deposit the check. Days to weeks after the victim makes the deposit, he/she is notified by his/her financial institution that the lottery payout check was counterfeit. It is at this point that the victim realizes that the financial loss is his/her own, not the bank or credit union where the bogus check was deposited.

This scam is tricky as the notification email or letter is rich in detail and the prize amount varies. It often outlines when and where the drawing was held, the winning ticket numbers, how the “winner” was included in the drawing, who will pay out the funds, the payer's phone number and website information, and how much money the alleged “winner” will receive. The victim receives repeated cautions to keep matters confidential until final payout is made as part of precautionary tool to avoid double claiming and unwarranted abuse of the program. Most often, this information is completely false, but in some cases, names of real lotteries and banks are involved, and look-alike websites are used by the scammers as proof that the scheme is legitimate. Don't be fooled - it is still a scam.

What do I do if I receive this email?
If you receive a notification of a payout from a lottery or contest you did not enter, ask yourself the following questions:

Did you buy a lottery ticket? (you can only be a winner of a lottery if you actually play)
How did they get your name and did you provide it when you purchased the lottery ticket? (Most lottery ticket sales do not require a name.)

Some scams will try to convince you that they are simply choosing citizens at random to give-away unclaimed funds, but this is only another attempt to convince you of the scams legitimacy. Legitimate lottery organizations will not request you pay handling fees before you receive a payout.

If you feel you are part of this type of scam, please contact your local police authorities immediately.

What you can do to protect yourself against this and other phishing scams
Be protective of all your personal and financial information - never provide private information or send money to unknown solicitors, websites or callers. Remember, if it sounds too good to be true, it usually is – trust your instincts. Also, if you are approached with a scam similar to the above, we suggest you avoid the following:

Never wire money to a stranger
Be wary of contests or lotteries offered to you that you did not enter
Beware of any "Advance-Fee" payment for loans, credit cards, jobs, prizes, etc.

We also suggest you sign up for our Fraud Prevention e-LERT. Our Fraud Prevention e-LERT will immediately advise you when we have added a new article or warning to the ‘Fraud Alert' section of our website.