Skip to main content

For updates and guidance related to COVID-19 / Coronavirus, click here.

Investor Alert

Sorry, This One’s Not a Winner: Don’t Get Fooled by a Lottery Scam

FINRA is issuing this alert to warn investors about scammers who contact investors with promises of significant cash, prizes and lottery winnings. With fraudulent schemes, there is always a catch: You have to agree to send money upfront to secure your new riches. Our advice: don’t do it.

Through its recently launched FINRA Securities Helpline for Seniors – HELPS®, FINRA has received a number of calls from investors who were contacted by individuals offering cash, prizes, investment opportunities and luxury goods in exchange for fees, donations or purchases. For example, callers reported being offered prizes of $1.5 million and a brand new Mercedes-Benz. Scammers promise these fabulous prizes to play with your emotions, in hopes that it will trick you into acting irrationally and opening your wallet to them.

These schemes have been going on for years—imposters use false promises to convince you that you have won something, but, in order to claim it, you have to send them money first to pay the taxes or other fees. For example, the Federal Trade Commission (FTC) recently shut down a sweepstakes scam targeting seniors, where the fraudsters asked the seniors to send money in advance.

These types of scams, often referred to as advance fee scams, come through the mail, telephone, email, social media, or other forms of mass or individual communication. Some scammers might ask you to wire money to an unknown bank account, while others ask for your bank account and credit card information to access your funds directly. They may even come back with multiple requests for more money, and ask you to pay a fee to get back your previous payments. Some fraudsters target U.S. investors from afar while others target non-U.S. investors.

Unfortunately, no matter the source, the money rarely, if ever, makes it back to the investor, and the scammers disappear into thin air.

If someone is asking you to send money or hand over personal financial information to claim cash, prizes, luxury goods or a new investment opportunity, be very suspicious. Remember, if you have to pay first, it’s likely not a prize.

Valuable Resources

If you think you may be a victim of this type of financial crime, report it to the FTC here or by calling 1-877-FTC-HELP. The FTC has issued warnings and information related to these scams. In addition to explaining different types of lottery and prize-related scam tactics, the alerts provide tips on how to spot one of these scams and steps to take to avoid falling for one.

If your case involves securities or other investment opportunities, you can contact FINRA by filing a complaint here or calling FINRA’s Call Center at (301) 590-6500. If you are a senior investor, call the FINRA Securities Helpline for Seniors – HELPS® at (844)57-HELPS, a toll-free number to get assistance from FINRA or raise concerns about issues with brokerage accounts and investments.

If you have been a victim of one of these scams, you may be coping with the aftermath of a compromised identity, damaged credit, financial loss, and a painful range of emotions including anger, fear, and frustration. Even so, reporting the scam is important—your report can make a big difference and help shut down scam artists running bogus schemes. There are people who can help you. This victim recovery checklist published by the FINRA Investor Education Foundation, through its partnership with the National Center for Victims of Crime, provides helpful information for victims of mass marketing and other fraud.

To receive the latest Investor Alerts and other important investor information sign up for Investor News.

Last Updated: