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Lottery and competition scams

What lottery and competition scams look like and how they work.

The Set-Up

You’re contacted out of the blue. You’ve won some money! You just need to send in an administration fee and the prize is yours.

The Hook

You're soon planning what you'll do with the money. You don’t remember entering a competition, but what the heck! You send off the fee to claim your prize.

The Sting

There is no prize, you’re left disappointed... and worse off than before.

How lottery and competition scams work

Lottery and competition scams come in many forms. You may get an email, a text message, be contacted through social media. You might even get a letter through the post.

There are many lottery and competition scams, each with a slight twist. Be wary if:

  • It is a lottery or competition that you didn’t enter.
  • You’re asked for money to claim your prize – to cover administration or bank fees, government taxes, insurance or courier charges.
  • You’re pressured into claiming your prize quickly, or risk missing out.
  • You’re asked to keep your win private and confidential – to protect you from gossip or to prevent somebody else from claiming your prize. (The real reason, of course, is to stop you from seeking advice and realising that their approach is a scam.)
  • It’s an overseas lottery. It is illegal to run an overseas lottery in New Zealand.

Types of lottery and competition scam

Overseas lotteries

You’re approached by an overseas lottery or sweepstakes company. Apparently you’ve won a lot of money.  The company name may be a real overseas lottery, like Euro Millions or UK Millionaires Raffle. You look it up and think: “This all seems fair enough”.

The name of the lottery may be real, but your win is not. There are no lotteries that give out winnings to people who do not buy tickets. It just doesn't happen.

You’ll be asked to send a fee to unlock your winnings – probably through a money wiring service such as Western Union. Don’t.

Pay-to-play

You’re told that you’ve been chosen to play in a competition. You may be tempted by a big-cash-prize.
You’ll be asked to send a small fee – for example $25 – and asked to answer a qualifying question to start playing the game.

If you send money the scammers will keep coming up with new fees until you run out of money or say 'enough'.

Psychic/lottery scams

You get a message from a psychic. They tell you not to worry about your bad finances − good fortune is coming your way.

Imagine your joy when you get an email saying that you’ve won a lottery. It’s a special lottery that you didn't even have to enter. All you need to do is send an upfront fee to get your money. The psychic was right!

Both are scams from the same scammer. The psychic scam makes the lottery all the more believable, and vice versa.

Fake Prize Scams

You’re told that you’re eligible for a prize. It may be a real prize, but the costs of claiming it far outweighs its value. For example, you may be required to order an item from a catalogue, or call an expensive premium (0900) phone line. Equally, the prize may not be what you expected. Or you may never receive it at all.

Text-back competitions

You get a text inviting you to sign up to enter a competition. You think, ‘why not?’ and text back for the chance to win.

Your next phone bill is twice what you expected, or you run out of credit when you’ve only just topped up. Little do you know you’ve just texted a premium rate number – you’re charged through the nose for sending the text, or even for messages you receive in return.

It may have been a real competition, but the prize involved will be worthless compared with what it costs you to take part.

Competitions Advertised on social media

You see an ad on a social media site, inviting you to enter a competition. It asks you to fill in your mobile and email details and to repost it on your page. There is no competition. Scammers are simply harvesting data that they can use to target with scams.

‘You’ve won a holiday’

Read more about this scam in our holiday and travel scams section.

Protect yourself from lottery and competition scams

  • Never send any money following an unexpected ‘prize’ or ‘lottery win’, especially via a money wiring service such as Western Union.
  • Be cautious about giving out your personal details, bank details, mobile phone numbers or email address.
  • Don't open junk emails, or click on their contents. Just delete them. Don’t even click to unsubscribe − malicious links can launch spyware onto your computer.
  • Ignore unsolicited texts or missed calls from unknown sources.
  • Don’t call any numbers given in emails to check if a lottery or competition is genuine. Scammers often set up 0900 or overseas, premium rate phone numbers that are expensive to call.
  • Be wary of unsolicited approaches from psychics, especially if you’re told you’ve come into some money soon after. Take their ‘foresight’ with a large pinch of salt. Many people have money and other worries − they do not know anything about your life.

Help protect others from lottery and competition scams

If you’ve been affected by a lottery or competition scam, please help us to warn others by reporting your story to Scamwatch. Your personal details will be treated in the strictest confidence.

Report your scam here.

 

Last updated 19 November 2012