Lottery and Prize Scams: Protecting Seniors from "You've Won" Fraud

Americans lose hundreds of millions of dollars annually to lottery and sweepstakes scams, with seniors accounting for a disproportionate share of victims. The average loss is over $9,000, with some victims losing their entire life savings chasing prizes that don't exist.

These scams are devastatingly effective because they tap into hope—the dream of financial security, the excitement of unexpected good fortune. This guide will help you recognize lottery scams, protect your parent, and know what to do if they've already been victimized.

How Lottery and Prize Scams Work

Understanding the mechanics of these scams helps you recognize them and explain them to your parent.

The Initial Contact

Scammers reach victims through:

• Phone calls: Often from overseas numbers or spoofed local numbers
• Letters and mailings: Official-looking documents with impressive logos
• Emails: Claiming to be from lottery organizations or attorneys
• Text messages: "You've been selected as a winner!"
• Social media: Fake contests and prize giveaways

Common Scam Scenarios

Foreign lottery scam:

"You've won the Spanish/Canadian/Dutch/Jamaican lottery!" The letter or call claims your name was randomly selected from a database. Never mind that you never entered—and that it's illegal for U.S. residents to play foreign lotteries by mail or phone.

Sweepstakes scam:

"You've won Publishers Clearing House!" Scammers impersonate legitimate sweepstakes companies. Real PCH never requires winners to pay fees, and they'll never call asking for money or bank information.

Prize notification scam:

"You've won a car/vacation/electronics!" The victim must pay shipping, taxes, or registration fees. The prize never materializes.

Inheritance scam variation:

"A distant relative left you millions, but there are legal fees to release the funds." Similar mechanics to lottery scams but framed as an inheritance.

The Hook: Why Victims Pay

Scammers demand payment for various made-up reasons:

• "Taxes must be paid before release" (false—real lottery taxes are deducted from winnings)
• "Processing fees"
• "Insurance and handling"
• "Customs and import duties"
• "Attorney fees to release funds"
• "Currency conversion fees"

Escalation: Multiple Payments

Once a victim pays once, scammers request more payments for new "obstacles." Common escalation tactics:

• "There was a problem with the first payment, we need another"
• "Additional taxes were assessed"
• "Government officials need to be paid to release funds"
• "Your prize has increased, but so have the fees"

Some victims pay repeatedly over months or years, always believing the next payment will release their winnings.

The Fake Check Twist

A particularly cruel variation:

1. Scammer sends a check for "advance winnings" or "to cover taxes"
2. Victim deposits the check (it appears to clear initially)
3. Scammer asks victim to wire back a portion for "fees"
4. The original check bounces days or weeks later
5. Victim is responsible for the full amount they wired

Warning Signs of Lottery Scams

Teach your parent to recognize these red flags:

Absolute Deal-Breakers

• Winning something you didn't enter: Always a scam
• Paying to claim a prize: Legitimate lotteries never require upfront payment
• Foreign lotteries: Illegal to play by mail/phone in the US
• Secrecy requested: "Don't tell anyone until you receive your money"
• Urgency: "Respond within 24 hours or forfeit your prize"

Strong Warning Signs

• Payment requested via wire transfer, gift cards, or cryptocurrency
• Request for bank account or Social Security numbers
• Caller ID shows foreign or unfamiliar numbers
• Caller won't provide verifiable contact information
• Pressure to act immediately
• Prize amount is unusually large
• Poor grammar and spelling in written communications

Suspicious Contact Methods

• Unsolicited calls about prizes
• Letters from foreign countries
• Generic greetings ("Dear Winner" rather than your name)
• Email from free accounts (Gmail, Yahoo) for "official" lottery business
• Social media messages about winning

Why Seniors Are Especially Vulnerable

Understanding why seniors fall prey helps you protect your parent.

Generational Factors

• May remember legitimate sweepstakes being more common
• Raised to be polite and trusting
• May not recognize modern scam tactics
• Less likely to research online before responding

Financial Concerns

• Fixed income creates desire for financial windfall
• Worry about being a burden on family
• Hope to leave inheritance for children/grandchildren
• Medical and care costs create financial pressure

Isolation Factors

• Living alone with limited people to consult
• Scammers provide attention and social interaction
• May be embarrassed to ask family for advice
• Cognitive decline may impair judgment

The Psychology of Hope

Lottery scams exploit the dream of sudden wealth solving problems. Scammers are skilled at:

• Building excitement and anticipation
• Creating emotional investment in the "prize"
• Making victims feel special and chosen
• Providing explanations for why fees make sense

Protecting Your Parent

Have the Conversation

Discuss lottery scams directly but without condescension:

• "I've been reading about these sweepstakes scams. Can you believe people fall for them?"
• "The news had a story about an elderly man who lost his savings to a fake lottery. So sad."
• "If you ever get a call saying you won something, will you tell me before doing anything? I'd hate for you to lose money to scammers."

Establish Clear Rules

Help your parent remember:

• "You can't win if you didn't enter." Simple and true.
• "Never pay to claim a prize." Real prizes don't require upfront payment.
• "Call me before sending money to anyone." A verification call can prevent disaster.
• "There's no rush for real prizes." Legitimate organizations don't pressure winners.

Reduce Exposure

• Register their number on the National Do Not Call Registry (donotcall.gov)
• Set up call blocking services through their phone carrier
• Help them unsubscribe from suspicious mailing lists
• Mark suspicious emails as spam
• Review and reduce magazine subscription lists (sometimes sold to scammers)

Monitor for Warning Signs

Watch for signs your parent may be involved in a scam:

• Secretive about phone calls or mail
• Unusual purchases of gift cards
• Unexpected wire transfers or withdrawals
• Excitement about "winning" something
• Talking about needing to pay fees for a prize
• Receiving lots of mail from foreign countries
• Defensive when you ask about their finances

If Your Parent Is Already Involved

Stay Calm and Non-Judgmental

Your reaction matters. If you shame or criticize your parent, they may:

• Hide future scam attempts
• Feel too embarrassed to ask for help
• Continue the scam secretly

Instead, express concern without blame:

• "I'm worried this might be a scam. Let's look into it together."
• "These scammers are very convincing. They fool thousands of smart people."
• "I'm not upset with you. I just want to make sure you don't lose any money."

Stop All Contact

1. Stop answering calls from the scammers
2. Don't send any more money
3. Don't cash any checks they've sent
4. Block their phone numbers
5. Mark their emails as spam

If They've Sent Money

Act quickly to limit damage:

Wire transfers:

• Contact the wire transfer company immediately (Western Union, MoneyGram)
• Request a recall—possible if done very quickly
• File a fraud complaint with the company

Gift cards:

• Contact the gift card company (Apple, Google, Amazon, etc.)
• Report the cards as used in fraud
• Provide card numbers if you have them
• Recovery is unlikely but sometimes possible

Checks/bank transfers:

• Contact the bank immediately
• Report the fraud
• Ask about stopping payments or recovering funds

Credit cards:

• Dispute the charges as fraud
• Credit card payments offer the best chance of recovery

Report the Scam

Reporting helps authorities track and stop scammers:

• FTC: ReportFraud.ftc.gov
• FBI IC3: ic3.gov (Internet Crime Complaint Center)
• USPS: postalinspectors.uspis.gov (for mail fraud)
• State Attorney General: Consumer protection division
• Local police: File a report for your records

Beware of Recovery Scams

Scammers often target previous victims again with "recovery scams":

• "We're a government agency that can recover your lost money"
• "For a fee, we'll get your money back from the scammers"
• "We caught the scammers and are returning victim funds"

These are also scams. No legitimate recovery service charges upfront fees. Government agencies don't contact victims to offer recovery help.

Legitimate Sweepstakes vs. Scams

Some sweepstakes are real. Here's how to tell the difference:

Legitimate Sweepstakes

• You entered deliberately (submitted a form, mailed an entry)
• No purchase or payment required to enter or claim
• Sponsored by recognizable companies
• Terms and conditions are clear and verifiable
• Winners receive winnings without paying anything first
• Contact information is verifiable
• Never demands secrecy

Scam "Sweepstakes"

• You don't remember entering
• Payment required to claim prize
• Foreign lottery claims
• Urgency and pressure to act fast
• Requests for personal/financial information
• Contact from free email accounts
• Secrecy requested

If Your Parent Legitimately Enters Sweepstakes

Some seniors enjoy entering legitimate sweepstakes as a hobby. If your parent does this:

• Help them stick to legitimate, well-known sweepstakes
• Remind them legitimate wins don't require payment
• Suggest they keep a log of what they enter
• Encourage them to verify any "win" notifications
• Establish a rule: always check with you before claiming prizes

Talking Points for Your Parent

Simple phrases to remember:

Resources

Report Scams

• FTC: ReportFraud.ftc.gov
• FBI IC3: ic3.gov
• USPS Postal Inspectors: 1-877-876-2455

Get Help

• AARP Fraud Watch Network: aarp.org/fraud | 877-908-3360
• National Elder Fraud Hotline: 833-FRAUD-11 (833-372-8311)

Prevention

• Do Not Call Registry: donotcall.gov
• Opt out of prescreened credit offers: optoutprescreen.com