The supposed winnings in a sweepstakes scam. The catch? The ‘winner’ was asked to send $1,000 in gift cards to claim their ‘prize’. (Photo credit: Facebook)

The supposed winnings in a sweepstakes scam. The catch? The ‘winner’ was asked to send $1,000 in gift cards to claim their ‘prize’. (Photo credit: Facebook)

Watch out for sweepstakes ‘win’ scam that can cost thousands

If you have to pay to claim a prize, chances are it’s a scam

An area resident recently received news that she had won a major cash prize in a well-known (and legitimate) sweepstakes, but alarm bells were raised when she was asked to send $1,000 in gift cards to claim her winnings.

It’s an example of the sweepstakes, lottery, and prize scams reported to the Better Business Bureau (BBB) each year, and the BBB says that losses to these scams increased substantially in 2020. Across Canada, BBB saw a 40 per cent increase in these reports when compared to 2019, and 2021 reports are on pace to surpass last year’s total.

The scams generally target those over the age of 55, and the BBB says that the loneliness and isolation caused by the COVID-19 pandemic probably played a role in more people falling victim to this type of scam. Some 72 per cent of the reports they received over the last three years about sweepstakes, lottery, and prize scams were from people aged 55 and older, and 91 per cent of the complainants lost money, with a median dollar loss of $1,200. Those aged 18–54 lost an average of $318.

According to BBB Scam Tracker data, sweepstakes scammers reach out through a variety of channels: phone calls, email, social media, notices in the mail, and text messages. They may impersonate well-known legitimate sweepstakes such as Publishers Clearing House, but have been known to fabricate an organization name, and will sometimes send a picture of piles of cash, telling the victim that this is their winnings. The “winner” is asked to pay taxes or fees before the prize can be awarded, using gift cards, a wire transfer, a bank deposit into a specified account, or even cash sent by mail.

There is one simple rule that will prevent you from becoming a victim: never pay money to claim a prize. If you are asked to do so — particularly in the form of gift cards — it’s almost certainly a scam. The scammers often claim that the money is for “taxes” or a “delivery fee”, but don’t be fooled.

Another tip-off is that you do not remember entering the sweepstakes, draw, or lottery in question. To win a lottery, you must buy a lottery ticket. To win a sweepstakes or prize, you must have entered first. If you can’t remember doing so, that’s a red flag. Call the sweepstakes or lottery company directly to see if you won, but research the number carefully before calling. Do not use contact information provided by the potential scammer.

If in doubt about something that seems too good to be true, talk to a trusted family member or friend. If you receive an email or social media message from someone you know claiming they won a sweepstakes or prize, speak directly with them to make sure it’s legitimate and they haven’t been hacked, particularly if the message says your name is also on the list of winners and you need to check it out.

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