Lottery Scams

            Silence is fraud's best friend.  Word of mouth is fraud's worst enemy.  Pass the word!

Home

About Us

FAQs

Search

Site Map

Contact us Report Email Fraud Scam Solution Center Volunteers
Custom Search

 

Lottery Scam Home Menu:

How to identify a lottery scam letter

How to really verify a check or money order

The answers to your most frequent lottery scam questions

It is illegal for US Citizens to enter foreign lotteries: Federal Statute

Look in the Lottery Scam Email database for emails that are like the one you got

Lottery names used in lottery scam letters

 

 

 

Green Card Lottery Scam: Truth and Lies in simple words

International Lotteries vs. Lottery Scams

Luck of the draw: Numbers games and drawings

Free lotteries - Some are legitimate, some are not

List of Official US Federal and State Lottery web sites

Gaming Commissions and Lottery Associations

ID Theft Prevention To-Do List

Threat emails

File a Scam Email Report

 

 

Payment Processing & other Counterfeit Draft Scams

 

FDIC Special Alerts List of Counterfeit Checks

 

 

 

 

 

More about Pay-to-Play Lotteries, Sweepstakes, free lotteries

and responsible online drawings

More about pay-to-play lotteries

 

If you have received a lot of Lottery Scam emails and/or standard post letters, you have undoubtedly seen that some claim to be sponsored by Bill Gates or Jesse Jackson or Microsoft, Google, Yahoo, or any number of other well-known names.

Let's set the record straight: pay-to-play lotteries are NOT sponsored.

Lotteries are "operated."  That means that they are managed by a company (either government owned or independent) that specializes in every aspect of lottery law, promotion, independent auditing, financial responsibility, and compliance with accounting/reporting laws and good business practices.

Now why is that?  Well, just think of the numbers for a moment.  Lotteries winnings are a portion of the total fees paid into the lottery by players.  That's an awful lot of money.  And that money has to be disbursed.  Here are just some (not all) of the expenses incurred by operating a lottery:

bullet

Marketing and Advertising (ad development, cost of advertising in the media, marketing and advertising specialists)

bullet

Printing

bullet

Point of purchase machines and machine maintenance

bullet

Security specialists

bullet

Cash pick-up and delivery services

bullet

Corporate salaries

bullet

Bookkeeping, accounting, auditing

bullet

Computers

bullet

Software

bullet

Corporate overhead (salaries, health insurance, liability insurance, etc.)

bullet

Attorney fees (to keep up with lottery laws)

bullet

Web site maintenance

bullet

Game development

bullet

General overhead (rent, insurances, office furniture, office supplies, etc.)

bullet

Disbursement oversight (to schools and other public works, to tax authorities, to winners).

All those expenses are paid for by from ticket sales revenue.  The winnings are what is left over after expenses and disbursements to public works.  Taxes are deducted from the winnings of the specific player once that player reports his claim to the lottery, depending on tax rules and regulations for the country, state, or province in which the lottery is being operated.

Back to top

More about Sweepstakes

A SPONSORED lottery is normally called a Sweepstakes.  Sponsored games are free, and are an enticement for players to provide their name, address, and telephone number for marketing and advertising purposes.

Where does the money come from for Sweepstake jackpots?  From advertisers.

The most important information for advertisers is called demographics.  'Demo' - from the Greek "demos" meaning  POPULACE or the people; and 'graphic' - relating to a written or pictorial presentation.

Briefly, demographics tell advertisers who is spending money and what they are spending it on.  And that information is so important that advertisers are willing to spend a great deal of money to get it.

On top of that, new Internet laws are cracking down on Spam (unsolicited emails).  While the laws don't have much bite to them right now, they will be stronger as time goes by.  Advertisers must look to the future.  There is so much money to be made on the Internet that merchants simply cannot afford to miss even one day of advertising.

This means the merchants are willing to buy your permission to send you email advertising, sell your info to 3rd parties, send advertising and samples to your home, and call you.

So they sponsor sweepstakes, or free betting games with any number of catchy and traditional names (such as free lottery), in return for your information and the right to send you advertising.

Back to top

More about free online lotteries

Free lotteries are merchant Sweepstakes (see Sweepstakes above) called lotteries because numbers are drawn instead of entry forms.

Over the years, various marketing companies have created free online lotteries, the most notable of which are GroupLotto (which appears to no longer exist at this time, 2/2011) and FreeLotto.  To play, one must register with the website, be eligible to play, and abide by the Rules (http://www.freelotto.com/Rules.asp).  To claim prizes, players must log in to their FreeLotto account.  FreeLotto is owned and operated by PlasmaNet Inc., a Delaware marketing corporation.

From time to time, there are other attempts at free online lottery-style Sweepstakes, but we strongly advise anyone who wishes to participate to carefully examine the eligibility requirements, rules of play, and most importantly, business licenses and registrations to determine who audits the operation.

We urge EXTREME caution when site ownership and business information is not made publicly available on the web site. 

REMEMBER THIS! A RESPONSIBLE ONLINE LOTTERY OR SWEEPSTAKES:

 
bullet

Requires that a person register in order to play.

bullet

Provides an online account for each player.

bullet

Provides full corporate information so that anyone can verify licenses, registrations, complaints, corporate officers, and the existence of outside agents without relying on the claims of that corporation or agent.

bullet

Does not require any fees to be paid in advance of disbursing winnings.

bullet

Encourages you to talk about them - there is no confidentiality required.  On the contrary, talking about your winnings is encouraged so that others will participate.

bullet

Does not get the winning numbers mixed up.

bullet

Has well-defined and easy to read Rules, and the responsible corporation and/or government commission is plainly listed in these Rules so that you can research everything about that lottery or sweepstakes on your own.

bullet

Deducts whatever expenses and/or taxes are required as listed in the Rules or under the Terms and Conditions, or are available by contacting the company.  These expenses and/or taxes are deducted from the winnings before disbursement.

CAUTION: Not all sweepstakes deduct taxes - in some cases they are reported to tax authorities and it is up to the player to report winnings as income and pay the taxes accordingly.

The only agencies that can collect the taxes due on lottery winnings are the state, Province, or federal government in which the lottery games are played.

In many countries, the taxes due the federal government are immediately deducted from the winning amount.  The rules for state or Provincial taxes may vary, with some deducting the taxes before winnings are sent out, while others require the winnings be stated on the state or Province annual income tax report.

If the state, Province, or federal government requires that taxes be deducted from winnings immediately - before the money is sent to the winner - the lottery operator must comply and you can request confirmation from both the lottery operator and the appropriate government agencies that your taxes have been paid on the winnings.

Lottery scam letters often claim that you must pay for the taxes on winnings by sending money to a ?claims agent? or other party.  That is a lie.  Taxes are never, ever sent to a 3rd party to be paid on your behalf, and absolutely never by Western Union or MoneyGram.  Only you can pay your taxes, and that check must be made payable to the government agency that is responsible for collecting taxes.

For instance, if you are a resident of California in the US, taxes are paid to the Internal Revenue Service (IRS) which collects our Federal taxes.  In California, it is the winner's responsibility to report the lottery winnings as income on the California State Franchise Tax Board annual returns.

Back to top

EXCEPT FOR TAXES YOU PERSONALLY PAY DIRECTLY TO YOUR OWN GOVERNMENT TAX AGENCIES, THE AMOUNT LISTED AS YOUR WINNING AMOUNT IS FINAL.

 

 

We are not attorneys and don't pretend to be.  In our experience, the information and guidance offered on this site have proven to be effective; however, we always recommend that you consult with an attorney.

If you have doubts about Fraud Aid, Inc. do not hesitate to contact federal (FBI, Secret Service, RCMP) Scotland Yard, or local law enforcement to check us out.

Information provided about lotteries and lottery scam: Fraud Aid, Inc. is not affiliated with any pay-to-play or free online lottery or Sweepstakes games and derives no income from any pay-to-play or free online lotteries or Sweepstakes or any of their participating sponsors with the possible exception of a sponsor's independent advertising unassociated with any drawings promotion; nor does Fraud Aid promote or sponsor any lotteries or Sweepstakes or numbers drawing of any kind.

Reporting, crime-fighting, and victim resource links

Copyright 2000-2011 Fraud Aid, Inc.  -  All Rights Reserved

Privacy Policy Disclaimer  Spam Policy