Contest scams cost victims more during pandemic


Sweepstakes and lottery scams resulted in higher financial losses during the COVID-19 pandemic compared to the previous three years, especially for the elderly, according to new research from the Better Business Bureau. The BBB warns consumers to never pay money to claim a prize. If someone asks for money before giving out a prize, it is probably a scam.

The research is an update of the 2018 BBB in-depth investigative study, “Sweepstakes, Lottery and Prize Scams: A Better Business Bureau Study of How ‘Winners’ Lose Millions Through an Evolving Fraud.” Since the study’s publication, there has been a 16% decrease in complaints filed with the Federal Trade Commission, the FBI’s Internet Crime Complaints Center, and the Canadian Anti-Fraud Center. However, the financial losses reported to the three agencies increased significantly in 2020 with the COVID-19 pandemic, with the FTC recording a more than 35% increase in reported dollar losses. The updated research highlights how these scams work and the importance of educating consumers, especially those who might be susceptible to a specific scam.

According to Steve Baker, BBB International Investigator, “This updated research highlights how these scams work and the importance of educating the elderly and others who may be susceptible to these scams. Because these crooks are so good at what they do, anyone could be a victim.

Who is at risk?

People over 55 continue to be the primary targets of sweepstakes, lotteries and prizes scams, accounting for 72% of fraud reports for this type of scam received by the BBB Scam Tracker over the past three years. last years. Of the older consumers who were targeted, 91% said they had lost money. Adults over 55 lost an average of $ 978, while those aged 18 to 54 lost an average of $ 279, according to Scam Tracker reports.

The containment and isolation of many elderly people experienced during COVID-19 may have helped fuel the increase in casualties. Other factors that might contribute to the particular vulnerability of some older people include mental decline and relative financial stability, as noted in the 2018 BBB study.

According to Baker, the author of the 2018 study, recent BBB interviews with repeat victims of raffle scams, however, revealed that few of them were the stereotypical ‘frail confinement’ that many people envision. . Instead, Baker noted that the victims interviewed were ordinary people more interested in using the imaginary earnings to help their families or communities than spending it on themselves.

Debbie Deem, a retired FBI victim assistance specialist, explains, “They may believe the earnings will strengthen their role in the family, as well as their ability to financially support their younger parents. It can be nice to be financially useful again, especially if it was their former main role in the family.

Containment during the pandemic, along with powerful social influence tactics, are helping lottery scammers sell the scam, according to Anthony Pratkansis, professor emeritus at the University of California.

“After profiling the victim, they take on any role – friend, authority, person in need – to better work on their crimes,” Pratkansis told BBB. “Scammers often talk to victims every day, grooming them and building trusting relationships. They take careful note of the victim’s family and other aspects of their life and, like dating frauds, try to isolate victims from their traditional support structure. Scammers also employ different voices, sounding bossy at one point, speaking as a partner to others, or even acting as a supplicant asking for help to finally bring up the prize.

How the crooks reach you

According to data from BBB Scam Tracker, sweepstakes scammers contact various channels: calls, email, social media, mail notifications and SMS. They can pose as well-known raffles such as Publishers Clearing House or a state or provincial lottery. The “winner” is asked to pay taxes or fees before the prize can be awarded. The FTC notes that more and more people are being urged to buy gift cards to pay for these fees – its use is documented in more detail in BBB’s in-depth investigation of gift card fraud in 2021 – but they may also be required to pay by wire transfer or wire transfer to a specified account, or even cash sent by post.

In reality, the price does not exist, which people might not realize until they pay thousands of dollars that cannot be recovered. However, the harm suffered by victims of lottery fraud can far outweigh the loss of that money. Losses can strain family confidence, and victims have even committed suicide. Additionally, repeat victims might have difficulty terminating their involvement in a lottery scam.

Shortly after his wife’s death in 2020, an 80-year-old man was contacted by crooks who told him he had won second place in a popular competition, taking home $ 2.5 million, a brand new luxury car and gold medallions. He then started talking to the crooks on the phone daily, contacting them even after his daughter changed her phone number. He withdrew money from his retirement account and opened a separate account, sending a total of $ 72,000 in cash to an address in Mississippi before his daughter cut off contact between him and the crooks.

Lottery scammers also often use victims as “money mules” to receive money paid by other victims and then transfer the money to the crooks. This makes it more difficult to find victims’ funds and find the real crook. Some victims do this without realizing that the money is coming from other victims of fraud; others might think it is a way to recover some of the funds they have lost.

Yet others could turn into mules because of the crooks’ threats. The US Department of Justice cracked down on these money mules with a major law enforcement initiative announced in December 2019, but officials often do not pursue unintentional mules as a first line of action, warning them rather than prosecution. could result if they continue.

A woman said she lost at least $ 35,000 in three years after receiving a letter from “Mega Millions” telling her she had won $ 5.5 million and a Mercedes Benz. The woman said the scammer, who she spoke to on the phone daily for several years, initially asked for $ 9,500 in fees, but other requests for money followed. The woman paid the “fees” by wire transfer and gift cards. She also cashed a counterfeit cashier’s check sent by the crooks, leading to criminal charges against her. Later, the woman repeatedly acted as a mule of money, and victims of fraud began to contact her directly. She believed that all of these tasks were necessary for her to receive her earnings. When the woman complained to the scammer, he threatened her and her son.

As described in the 2018 BBB study, raffles and lottery fraud often originate in Jamaica, with the United States Ambassador to that country estimating in August 2020 that such fraud represents an industry of 500. to $ 1 billion over there. The United States and Jamaica have teamed up in an international law enforcement effort known as Project Jolt, which has resulted in numerous lawsuits. Reports have also implicated Costa Rican nationals and, more recently, Nigerians.

What is legitimate?

Always remember that real lotteries or raffles don’t ask for money. If anyone wants money to pay their taxes, themselves or a third party, they are probably scammers. To win the lottery, you must purchase a lottery ticket. To win a raffle or a prize, you must first register. If you don’t remember it, it’s a red flag. Keep in mind that federal law prohibits the cross-border sale or purchase of lottery tickets by phone, mail, or online.

Finally, always talk to a trusted family member or to your bank. They might be able to help. You can also call your local BBB office to help identify a scam.

Kelvin Collins is President and CEO of the Better Business Bureau serving the Fall Line Corridor, which includes the Augusta-Aiken metro area. Direct questions or complaints about a specific business or charity to (800) 763-4222 or [email protected]


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