FINRA Issues Investor Alert—Sorry, This One's Not a Winner: Don't Get Fooled by a Lottery Scam
WASHINGTON — The Financial Industry Regulatory Authority (FINRA) today issued a new Investor Alert, Sorry, This One's Not a Winner: Don't Get Fooled by a Lottery Scam. FINRA is publishing the 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. In the case of lottery scams, fraudsters tell you to send money upfront to secure your new riches," said Gerri Walsh, FINRA's Senior Vice President for Investor Education. "Our recommendation couldn't be clearer: Don't do it. Remember, if you have to pay first, it's likely not a prize."
The alert was prompted by investors calling the FINRA Securities Helpline for Seniors – HELPSTM to report they were contacted by individuals offering cash, prizes, investment opportunities and luxury goods in exchange for fees, donations or purchases. For example, callers said they were offered prizes of $1.5 million and a brand new Mercedes-Benz. Scammers promise such prizes to play with your emotions, in hopes that it will trick you into acting irrationally and opening your wallet to them.
These schemes are an ongoing threat. The alert notes that the Federal Trade Commission (FTC) recently shut down a sweepstakes scam targeting seniors, in which the fraudsters asked the seniors to send money in advance.
The alert offers resources for how to recognize lottery scams, and steps to take if you believe you have been a victim of this type of financial crime, including a victim recovery checklist published by the FINRA Investor Education Foundation, through its partnership with the National Center for Victims of Crime.
FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firms, writing rules, enforcing those rules and the federal securities laws, and informing and educating the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers the largest dispute resolution forum for investors and firms. For more information, please visit www.finra.org.