I’ve always pictured my parents as invincible—two superheroes who not only gave me sound advice growing up, but were always there to pick me up when I fell. They also taught me to make smart decisions and be skeptical of too-good-to-be-true offers. So you can imagine my surprise when I received a call last week about their major life-changing event. Apparently, my Mom was the “lucky” recipient of a $500,000 sweepstakes prize! All she needed to do was pay $2,000 to cover the administrative fees.
Luckily, they called me first and never wired money or disclosed any personal information. But that one phone call really got me thinking: What if my parents had caved-in and wired money? What if they had given the caller personal information? What could have happened if the bad guys accessed my family’s bank accounts?
Unfortunately, this kind of thing happens every day to unsuspecting and trusting people. Sweepstakes and lottery scams are real. The scams prey on emotions and people are quick to buy into the idea of instant wealth. In fact, according to the Federal Trade Commission, Americans spend more than $100 million a year on foreign lottery sweepstakes.
At this point, it’s unclear how my parent’s contact information got into the hands of the con artists; they followed the proper procedures—always researching businesses with Better Business Bureau, reading the fine print, ignoring phishing emails and telemarketers, et cetera. The worst part is that we may never know how this caller obtained the phone number. But, learning the red flags of these types of scams can reduce the likelihood of falling victim.
I reminded my parents to exercise caution and anyone who receives similar phone calls or letters should listen closely as well:
- Never pay for a prize. It is illegal for any company to require a purchase or fee to play a sweepstakes; just ask the Washington State Attorney General. Also, processing fees or taxes will be deducted from prizes and will never need to be paid out-of-pocket.
- Do not wire money. Wire transfers are a great way to transfer money when you need to quickly get cash to your sister in Iowa or your nephew in Florida; they are a terrible way to get money to people you don’t know and have never met in person, especially if they are “out of the country.” Once funds are transferred, it is nearly impossible to reclaim them. In this case, the scammer specifically requested a wire transfer from my Mom, but she recognized the red flag and didn’t do it.
- Spot the fakes. Bad guys will oftentimes hijack the names of government agencies and the logos of well-known organizations in attempts to confuse and fool victims. Reputable organizations will not call or email winners; notifications will be delivered by certified mail and never by bulk-rate mail. When in doubt, call BBB or visit bbb.org to see if companies and notifications are legitimate.
- Never cash checks. Even if checks look real, don’t cash them! Scammers often blast out extremely convincing bogus checks in hopes that even just one person will make a deposit and wire some of the money back—this is called an overpayment scam.
As awesome as it would be to win a ton of money out of the blue, it’s a pretty unlikely event. Nationally, complaints about prizes, sweepstakes and lotteries ranked #6 in 2013 with the Federal Trade Commission. Victims of mail fraud should contact their local postmasters or the U.S. Postal Inspection Service by phone, toll-free at 1-800-372-8347, or online at postalinspectors.uspis.gov.
And while my blood is still boiling over the fact that someone targeted my parents, keeping a cool head is key. Whatever you do, avoid the gimmicks and hard sells and learn how to spot the red flags; this will turn you into the invincible superhero that helps others with sound advice.