Surge in Sweepstakes Scams and Fake Foreign Lotteries Could Lead Consumers on a Losing Streak

Austin, Texas, November 19, 2008 - BBB serving Central, Coastal and Southwest Texas has been swamped with phone calls from consumers asking about the legitimacy of notices they receive by mail and spam e-mail announcing they have won substantial sums of money in a Canadian or other foreign lottery or sweepstakes. A new batch of emails bearing Microsoft's name in connection with a prize- drawing in London has been hitting inboxes most recently. Consumers are usually given a telephone number to call and then are instructed to cash certified checks in amounts ranging from $2,000 to $10,000 in order to collect their "entire award package." They are then instructed to wire the money or send their own check back to the lottery company to cover fees and taxes.

The names and bank account numbers of reputable and valid U.S. businesses sometimes appear on these certified checks. The companies have advised BBB that they are victims of identity theft and that their names and account numbers are being used fraudulently in the lottery promotions. BBB wants to warn consumers that if they cash these counterfeit checks, they can be held liable by their financial institutions for the funds they withdrew.

"While most of these lottery notification letters deservedly end up in the trash, there appears to be an increase in the number of people who are taking them seriously," says Carrie A. Hurt, President and CEO of BBB serving Central, Coastal and Southwest Texas. "People need to realize the danger in responding to unofficial lottery- related solicitations. If they cash the counterfeit checks, they can end up liable for any funds they spend while waiting for the funds to clear. Even if no money is transferred to these organizations, simply providing an ID or bank account details to an unknown party makes consumers vulnerable to identity theft and fraudulent use of their bank account."

BBB cautions consumers not to allow enticing dollar signs to obstruct common sense. If you are being directed to wire money, send a check, provide access to your bank account or credit card numbers or forward personal financial information in order to claim your winnings, contact your BBB. This is an attempt to steal your money or identity, by a person masquerading as a lottery official.

BBB wants everyone to understand foreign lotteries are illegal. Legitimate lottery or sweepstakes companies will not ask you to send money in order to collect your winnings. They will not ask you for personal information. Consumers are reminded that legitimate prizes do not come with processing fees, and taxes are paid directly to the Internal Revenue Service after winnings are collected. Additionally, in Canada, there are no Canadian taxes or any other fees to pay on lottery winnings, and winners have to collect in person, in Canada. Many claim to be from outside of North America, but consumers are directed to contact a Canadian phone number for instructions in how to claim a prize.

The only lotteries that are legal in the United States are official state-run lotteries. Foreign lotteries violate U.S. Postal Service statues, though they may not violate the statutes of the country from which they originate. Foreign lottery solicitations should be brought to the attention of the U.S. Postal Service. For more information visit www.postalinspectors.uspis.gov.

Foreign lottery scams steal millions of dollars from unsuspecting people every year. If you receive any form of notification that you are a prize winner in a foreign lottery or sweepstakes, visit www.bbb.org and check it out before you become the next victim in this type scheme.