BBB Study: Sweepstakes, Lottery, Prize Schemes Devastate Older Victims with Evolving Tactics

Anchorage, Alaska — June 5, 2018 A new report by Better Business Bureau (BBB) says sweepstakes, lottery and prize schemes are devastating victims financially and emotionally with ever-evolving methods. These frauds concentrate on seniors, targeting them by direct mail, cold calling, social media, even text messages and smartphone pop-ups. BBB warns consumers to be on guard against these serious and pervasive frauds and their perpetrators.

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 $117 million out of half a million Americans and Canadians in 2017 alone, with actual victims and losses likely numbering much higher. BBB received 2,820 sweepstakes and lottery scam reports in Scam Tracker in 2017, with a median loss of $500. Seniors are the most frequent target and suffer the largest losses by far in these scams, which the report found commonly originate in Jamaica, Costa Rica and Nigeria. In Alaska, there were 30 scams reported with an estimated $850 lost in 2017.

The report recommends stronger law enforcement efforts on three fronts — in Jamaica, which has seen an upswing in violence related to lottery fraud profits; in the U.S., where law enforcement is urged to step up extraditions and prosecutions of overseas fraudsters operating in the U.S.; and globally, as law enforcement agencies worldwide are encouraged to take steps toward holding deceptive mailing organizations accountable and stopping fraudulent mail. It also urges Facebook and other social media platforms to take steps to weed out fake, fraudulent profiles and make fraud reporting easier.

An Alaska victim lost $580 after being told they were a Publisher’s Clearing House winner. The scammer told them to transfer $580 for taxes and fees to a government account to claim the prize. 

Among the report’s key findings:

The report was written by C. Steven Baker, BBB International Investigations Specialist. Baker is the retired director of the Federal Trade Commission’s Midwest Region.

In his role with BBB, Baker analyzes and reports on some of the most pervasive fraud issues that impact American consumers. Studies on puppy scams, tech support scams, and romance scams he authored were met with worldwide media coverage.

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

Michelle Tabler, Alaska Marketplace Manager| 907-644- 5208 | michelle.tabler@thebbb.org
Veronica Craker, Content & Communications Director| 253-722-8732| veronica.craker@thebbb.org