Tag Archives: Foreign Lottery Scams

Lottery scam originates from 876 area code (Jamaica)

It’s an old scam with a slight twist: lottery scammers based in Jamaica are using threats of physical violence to get victims to wire money.

Usually if you ignore a scam, that’s the end of it. Apparently this group takes it really personally, though; if a potential victim refuses to bite, they make threats. At that point, I suppose the whole “you won the lottery” angle is abandoned and it just becomes pure extortion.

Sometimes I make really general statements, and I’m going to do it again here: unless you personally know someone who lives in Jamaica or own/work for a company that does business in the country, don’t even answer phone calls from the 876 area code. There are exactly zero good reasons you should be getting out-of-the-blue phone calls from random people in Jamaica. The St. Louis BBB has some additional information about this scam.

How to Avoid Lottery Scams

Below is the text of my column for The Chronicle that appeared in the August 25, 2010 edition.

Q: I got a letter that said I won the lottery in the United Kingdom. It included a cashier’s check to cover taxes and fees. Is this for real?

A: Not even a little bit. Sorry.

What you have is a Lottery Scam letter. These have been circulating for years, and thousands of people have lost incredible amounts of money.

It usually works like this: you receive a letter than informs you that you have won a foreign lottery in which “no tickets were sold.” The lottery is most often based in the United Kingdom, but South Africa, Australia and other countries have been used as well.

The letter further states that, to claim your prize money, you have to pay some sort of taxes or fees up front. The cashier’s check included is supposed to cover this amount. You are instructed to cash the check at your bank or credit union, then take the cash to Western Union and wire it back to the sender.

A few days later, your financial institution informs you that the check was counterfeit, and that you’re now on the hook for the amount you cashed it for – usually in the $3,000-$4,000 range. The problem is that you have already wired this money out of the country. Once you make a wire transfer, you cannot get that money back.

Some people are under the impression that the financial institution that appears on the check will cover the loss, but that is not how it works. They did not issue the check – they had nothing to do with it at all. If someone made fake checks with your name on it, would you feel responsible to cover them?

Others believe their own financial institution will cover the loss, but once again, that is just not the way it works. From their perspective, all that happened was that you came in, you presented a monetary instrument, you received cash in exchange for it, and that check turned out to be counterfeit. They have no way to verify where it came from – you could have printed it yourself. They handed the cash to you. You are the one who has to pay it back.

The above is sort of the “classic” version of a Lottery Scam. Like most fraudulent activity, this scam has been adapted to new technologies. While some people still receive Lottery Scam postal mail that includes a counterfeit check, e-mail has become the main channel for this crime.

It starts the same way – you get an email that informs you that you have won the lottery in a foreign country. Since they cannot send you a check through e-mail, crooks will attempt to convince you to call a “claims agent” for further instructions, or to e-mail personal details back to the sender.

Next, they either mail you a counterfeit check with the same instructions as before – cash it and wire it back – or they will simply attempt to get you to wire money directly to them, skipping the check altogether. This second scenario often turns out much worse; while the counterfeit check usually nets the crook around $3,000 one time from each victim, if they can string you along and get you to keep wiring more cash, they can bilk you out of much more. There are people who have lost tens of thousands of dollars to this scam – victims’ entire life savings wiped out before they realize they have been had.

Like so many forms of fraud, this scam can be avoided by just remembering a few simple facts. First, you have to play the lottery to win the lottery. They do not just draw random names or e-mail addresses out of a giant hat.

Second, any time someone sends you a check and tells you to cash it and wire the money back to them, you are looking at a scam. There is no scenario in which this is a legitimate request.

Finally, if a stranger is offering you large amounts of money for free, do not trust them. What seems like the answer to your prayers could turn out to be the start of a financial nightmare.

But seriously folks, what is the deal with wiring money?

Looking back over the different types of fraud and scams I’ve been covering these past few months (and the ones I’m going to cover soon), I can’t help but notice that an inordinate amount of them involve wiring money.

Mystery Shopper Scams: the victim wires money to the thief.

Grandparent Telephone Scam: the victim wires money to the thief.

Craigslist Overpayment Scam: the victim wires money to the thief.

Job Interview Scam: the victim wires money to the thief.

Lottery Scam: the victim wires money to the thief.

So this has me thinking…what is the deal with wiring money? There just seems to be an aroma of seediness around the whole industry.

I’m not trying to throw Western Union under the bus here. I know the vast majority of people are using it and similar services for legitimate reasons, but still. Why is it so easy to commit crimes using money-wiring services, and could providers do anything to make it less so?

In all honesty, probably not. The crook is the one committing a crime. The victim is just wiring money, which you can pretty much do at will. It’s not a crime to fall for a scam. Limiting users’ ability to wire funds would just create extra hassle for customers and drive down business.

So that means it’s on you to not become a victim in the first place. Be knowledgeable about different types of scams. Most of all, just think before you act.

For example, I can’t think of a single legitimate case in which someone would mail you a cashier’s check and ask you to cash it, then wire money back to them. If someone is telling you to do this, it is a scam. 100% of the time. Just take that as a general rule, and you’ll reduce your chances of becoming a victim.

By the way, you didn’t win the lottery

Here’s a good rule of thumb when deciding how to respond to a potentially fraudulent email message, letter, telephone call or other type of communication: if a stranger walked up to you on the street and said the exact same thing, would you believe them?

For example, you’re walking down the street when a random guy in a shabby gray suit approaches you. He says, “Greetings, I am a foreign dignitary currently in exile and would like to ask for your assistance in transferring my fortune into the United States, totaling 250 million USD. If you help, I will let you keep 25% of that amount. I will need your checking account number to complete this process.”

You’d tell the clown to get lost.

Or perhaps he says, “Congratulations! You have been selected in the Canadian lottery as the top prizewinner! In order to claim your prize of 2.5 million USD, please give me a cashier’s check for $2,945.23 to cover taxes and other fees.”

Unless you’re very gullible, your reaction would be the same.

I know that the economy isn’t good at the moment. You might be facing layoffs, reduction in pay, or worse. Your employer might be going out of business completely. You get an email that promises instant riches and it seems like all your prayers have been answered.

These thieves know that. That’s why they’re in the fraud business to begin with. They’re counting on your sleepless nights of worrying about where you’re going to get the money to make it. And they’re only going to make your situation worse.

You have to keep your guard up. Imagine that offer coming from a stranger on the street, and you will instantly see through it.