Lotteries and Sweepstakes

It's a dream come true: you win the lottery and all your financial troubles go away! Unfortunately, unless it is the real Texas Lottery you won, you ARE dreaming. If you fall for it, it could be a real nightmare.

Consumers receive announcements every day, by email, US mail and telephone, saying that they are big winners in a lottery or sweepstakes. These announcements are an attempt to scam you.

Many of these attempts succeed. Each year, Texans lose millions of dollars to lottery scams. We urge anyone who is tempted to believe one of these solicitations to STOP. Delete the emails, throw away the letters and hang up the phone. It is a scam.

How it Works

"Winners" are asked to send money. Any number of explanations could be given. They may say it is for taxes, processing fees, or the cost of transferring funds. Regardless of what they may say, it's a scam. NO REAL LOTTERY OR SWEEPSTAKES REQUIRES MONEY UP FRONT FOR YOU TO COLLECT A PRIZE YOU HAVE WON.

Scammers know that the amount they are asking for sounds trifling compared to the amount the victim thinks he or she is about to receive when the prize is paid. The victim is thinking that it's worth paying the fee up front because prize will make up for it. But the prize is never going to appear. The victim will simply lose whatever money he or she sends in.

The amount demanded up front may sound small compared to the (imaginary) prize, but it may not be such a small sum to the victim. In fact, in many cases, people borrow or deplete their savings to come up with the money they are supposed to send up front. It is a cruel blow when they realize they have lost their money to a con artist.

• You don't have to buy anything to enter a sweepstakes. It is illegal for them to charge an entry fee.
• Buying merchandise will not help you win a sweepstakes. It is illegal for them to give better odds based on a purchase.
• You probably will not win. The odds against winning a major prize in a sweepstakes are huge.
• You did not win a lottery or sweepstakes that you didn't even enter. They made up whatever story they told you about how they got your name.
• It is illegal for you to receive proceeds of a foreign lottery. (But you are not going to receive anything anyway.)

Counterfeit Cashier's Checks

Some consumers, wise to the lottery scam, have been fooled by a new twist. They know they shouldn't send money in advance to collect a prize, but they are fooled when they receive a great big check - a cashier's check, no less.

We think of a cashier's check as being a very safe type of financial instrument, safer than a personal check because it is guaranteed by the bank. This is true if the cashier's check is real.

In recent years, however, counterfeit cashier's checks have become common, and many are such good forgeries that even bank tellers can be fooled by them.

The counterfeit checks are seen most often in connection with sales and purchases, but may be used to pursuade a victim that he or she has received a large prize.

It is a sobering fact that victims of cashier's check scams have been arrested for presenting the checks to banks as real. A victim who does so is actually passing a counterfeit check.

Throwing Good Money After Bad

Unfortunately, when a victim falls for a scam, the crooks are usually not satisfied. They keep coming back for more. Often they succeed in wheedling multiple payments out of their targets.

Sometimes the scammers just tack on additional fees, telling the victim that there is just one more payment they have to take care of before the prize is funded... and then just one more after that.

Victims, who are anxious to get the prize and have already "invested" in the scheme, may comply several times. It is a sad fact that many victims, when they begin to suspect they have been had, panic and keep sending money, in a desperate attempt to make things right.

Some victims keep paying until they have exhausted their life savings. As the situation worsens, they may go into denial. Concerned family members may have a hard time getting them to stop sending money to the crooks.

Just Hang Up!

Perpetrators of consumer frauds and scams are skilled, smooth-talking professionals. They are also heartless criminals who may become abusive in their efforts to pursuade or bully victims into sending money.

These crooks are willing to exploit any weakness, which may include the victim's good manners. On the telephone, scammers will not willingly terminate a call.

Consumers should understand that they are dealing with criminals. You are under no obligation to stay on the line with someone who is trying to scam you. JUST HANG UP!

Delete the email. Throw away the mail. And hang up the phone.