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BBB Study: Sweepstakes, Lottery, Prize Schemes Devastate Older Victims

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It’s one of the oldest scams in the book, but sweepstakes, lottery and prize schemes continue to devastate victims financially and emotionally with ever-evolving methods. A new study by Better Business Bureau says these frauds concentrate on seniors, targeting them by direct mail, media, cold calling, social media, text messages and smartphone pop-ups.

The report, “Sweepstakes, Lottery and Prize Scams: A Better Business Bureau Study of How ‘Winners’ Lose Millions Through an Evolving Fraud,” notes these scams bilked at least $117 million out of half a million Americans and Canadians in 2017 alone. Seniors are the most frequent target and suffer the largest losses from these scams. The report found the scams commonly originate in Jamaica, Costa Rica and Nigeria.

Jamaica is a major source of “cold calls” to victims who are told they have won money. The scam has had a major impact in that country, where the amount of money generated by lottery fraud has resulted in gang wars between rival fraud groups. This has also led to a dramatic spike in violence. More than 95 percent of reported fraud in Jamaica involves lottery or sweepstakes scams.

Among the report’s other key findings:

  • The majority of lottery or sweepstakes scam victims are between 65 and 74 years old. Among that age group, people who recently experienced a serious negative life event, and expect their income to remain steady or decline, are even more likely to be victimized.
  • Senior citizens are even being targeted on social media. The FBI’s Internet Crime Complaint Center (IC3) found that of the social media sweepstakes fraud victims who provided their age, 60 percent were 60 years old or older.
  • The fraudsters can set up a cloned profile of a Facebook user, including their profile picture, and will reach out to the user’s friends with the cloned profile. Facebook says it is stepping up efforts to remove fake profiles, even reportedly removing 500,000 of them over a one-month period.
  • In 2017, 2,820 individuals reported sweepstakes and lottery scams to BBB Scam Tracker. These reports show a median loss of $500, with wire transfer as the most common method of payment.

BBB offers the following tips for consumers to avoid lottery or sweepstakes fraud:

  • True lotteries or sweepstakes don’t ask for money. If they want money for taxes, themselves, or a third party, it is most likely a scam.
  • Call the lottery or sweepstakes company directly to see if you won. Publishers Clearing House (PCH) does have a sweepstakes but does not call people in advance to tell them they’ve won. Report PCH imposters to its hotline at 800-392-4190.
  • Talk to a trusted family member or your bank. They may be able to help you stay in control of your money in the face pressure from a fraudster.
  • Use your good judgement. If a social media message says you have won something that sounds too good to be true, it probably is.

The full study can be found at www.BBB.org. To report a sweepstakes scam, or any other type of scam, go to www.bbb.org/scamtracker.

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