Many Iowa residents are overwhelmed with letters of “congratulations” for fake lottery winnings. In fact, most letters come with what appears to be a legitimate cashier’s check. The Better Business Bureau is alerting all consumers to be cautious because these letters and checks are a scam.
While there are numerous versions of “foreign lottery scams”, they all tend to have the same underlying concept. Lottery scams that are being sent from supposed Iowa addresses also follow the same scheme. The local BBB has fielded an unprecedented number of calls this past week about the scam.
Names such as United Claims Services, Mega Lottery Inc, International Lottery Inc, North American Sweepstakes or Euromilliones Lottery Primitiva are just a few of the examples of phony company names on the letters sent through the United States Postal Service.
“One version of a lottery scam includes an apparent cashier’s check for a portion of the winnings,” explains Chris Coleman, President of the Better Business Bureau of Greater Iowa. “The lottery requires you to wire money to them to receive the rest of your winnings. Your money is wired in ways that make the transaction irreversible. In the mean time, the check you just deposited from them bounces and your bank will hold you responsible for the amount of the check.”
In some situations the letter received will have a number to call in order to activate the check. You will speak to a person who assures you of the legitimacy of the scam and may even ask for your bank account information in order to “deposit the rest of your winnings”. In reality, once they have your bank account or check routing number they are able to withdrawal funds from your account.
“The lottery winner ends up losing money from both sides of the situation,” states Coleman. “You lose the money you send them and you end up paying for the check they give you.”
The Better Business Bureau advises consumers not to participate in lottery solicitations, as many tend to violate federal law. If you receive what appears to be a lottery scam please send it to the BBB, and then turn it over to your local postmaster.
The BBB offer tips to evaluate the legitimacy of checks you receive from individuals or businesses that you do not know:
· Be sure to independently verify that the check is drawn from an actual account at a legitimate financial institution
· Do not rely on the telephone number listed on the check. Use directory assistance or the internet to get the telephone number of the financial institution and call them to verify the check.
· Never fall for any offer in which you are “offered” something or you “win” something, but you are first required to provide money or personal financial information.
· Do not rely on the money until the funds have been finally collected by your financial institution. Having funds “available” is not good enough
· If you have any questions about whether a transaction is legitimate, talk to your bank or credit union before doing anything.
· Provide all materials to your Better Business Bureau so that warnings can be issued to ensure that others do not get scammed by these criminals.
· Above all, never give out your credit card or bank account information.
· Lastly, review these tips with family and neighbors so that vulnerable consumers are not robbed by these thieves.
Consumers victimized by a phony check drawn on a federally insured financial institution should phone the Federal Deposit Insurance Corporation (FDIC) at 877.275.3342. If the check is drawn on a foreign bank, contact the United States Secret Service at 202.406.5572 or go to www.secretservice.gov.
To file a BBB complaint or to provide information regarding the scam, please call 1.800.BBB.1600 or visit our website at www.iowa.bbb.org.