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Lottery / Sweepstakes Scam

You won a lottery you never entered — congratulations — but first you must pay "taxes" or "fees" to release the prize. You cannot owe fees on winnings that do not exist, and real lotteries do not bill you to collect. The prize is the bait; the fee is the whole scheme.

Losses: $301 million (FTC 2024)
Targets: Elderly adults, hopeful individuals
Updated: 2026-01-06
Also known as: Prize Scam · Sweepstakes Scam · Foreign Lottery Scam · PCH Scam
01

How It Works

You receive notification that you've won a prize you never entered to win: **The setup:** "Congratulations! You've won $1,000,000 in the International Lottery!" "You've been selected for a $50,000 Publishers Clearing House prize!" **The catch:** To claim your "winnings," you must pay: - Processing fees - Taxes (in advance) - Insurance - Shipping costs **The cycle:** After each payment, there's another fee. The prize never comes because it doesn't exist. **Why people pay:** - Dreams of financial freedom - Small fees seem worth it for big prize - Official-looking documents - Scammers are persistent and persuasive
How Scammers Make Contact
Phone callsEmailMailSocial media
02

Warning Signs & Red Flags

  • You "won" a lottery or contest you never entered
  • Must pay fees, taxes, or shipping to claim prize
  • Notification comes from foreign country
  • Pressure to act quickly before prize expires
  • Asked to keep winnings secret
  • Payment requested via wire, gift cards, or crypto
  • You receive a check but must return part of it
  • Can't verify the company through research
03

Real-World Example

"I got a call saying I won $2.5 million from Publishers Clearing House. I just needed to pay $500 in processing fees. I did. Then they needed $1,000 for insurance, then $5,000 for taxes. Over 6 months, I sent $35,000. The prize never came. My whole retirement savings — gone."

— AARP Fraud Watch Network
04

How to Protect Yourself

  • You can't win a contest you didn't enter
  • Legitimate lotteries don't require upfront payment
  • Taxes are withheld from winnings, not paid in advance
  • Never pay via wire transfer or gift cards
  • Playing foreign lotteries is illegal for US residents
  • Research any company claiming you won
  • Publishers Clearing House never charges fees or calls to ask for payment
05

What To Do If You're a Victim

  1. 1Stop all contact and payments immediately
  2. 2Don't deposit any checks sent as "winnings"
  3. 3Report to FTC at ReportFraud.ftc.gov
  4. 4Report to your state attorney general
  5. 5If you sent wire transfers, contact the transfer company
  6. 6If you gave personal info, monitor your credit
Report This Scam
FTC Report Fraud FBI IC3 Identity Theft
?

Frequently Asked Questions

What is Lottery / Sweepstakes Scam?

You won a lottery you never entered — congratulations — but first you must pay "taxes" or "fees" to release the prize. You cannot owe fees on winnings that do not exist, and real lotteries do not bill you to collect. The prize is the bait; the fee is the whole scheme.

What are the warning signs of Lottery / Sweepstakes Scam?

You "won" a lottery or contest you never entered. Must pay fees, taxes, or shipping to claim prize. Notification comes from foreign country. Pressure to act quickly before prize expires. Asked to keep winnings secret.

How do I protect myself from Lottery / Sweepstakes Scam?

You can't win a contest you didn't enter. Legitimate lotteries don't require upfront payment. Taxes are withheld from winnings, not paid in advance. Never pay via wire transfer or gift cards.

What should I do if I'm a victim of Lottery / Sweepstakes Scam?

Stop all contact and payments immediately. Don't deposit any checks sent as "winnings". Report to FTC at ReportFraud.ftc.gov. Report to your state attorney general.

How serious is this threat?

We rate this a real but moderate risk. Reported losses: $301 million (FTC 2024). Most exposed: Elderly adults, hopeful individuals.

Can I get my money back?

Recovery depends on how you paid. Credit card payments may be reversed through chargebacks, while wire transfers and cryptocurrency are rarely recoverable. Report immediately to your bank and file complaints with the FTC at reportfraud.ftc.gov and the FBI IC3 at ic3.gov.

How do I report Lottery / Sweepstakes Scam?

Report to the FTC at reportfraud.ftc.gov. For internet crimes, file with the FBI IC3 at ic3.gov. For identity theft, visit identitytheft.gov. You should also contact your local police and your bank.
Sources & References
  1. 01FTC: Prize Scams
  2. 02PCH: Scam Alerts
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Government Impersonation Scam

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Inheritance / Nigerian Prince Scam

An unknown relative or foreign official has left you a fortune, and only a few advance fees stand between you and millions. The money is not real and never was — the Nigerian-prince classic in a new envelope. Every fee paid just invites the next one.

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