They were told they won $850,000. The scammer wanted money first
A caller tells the target they won a large sweepstakes prize, then demands fees before the prize can be released. The fees grow with each request and must be paid with gift cards.
How it works
The scam starts with a phone call from someone claiming to be a sweepstakes representative. The caller says the target has won a prize of $850,000. Before the prize can be sent, the caller demands a payment labeled as taxes, first about $2,500 and then $36,000. The caller asks the target to pay with gift cards.
Red flags to watch for
- Prize notice for a contest you never entered
- Caller demands money before any prize is delivered
- Fees labeled as taxes paid to the prize sender
- Payment requested by gift card
- Each new payment request is larger than the last
What to do
Do not send money or buy gift cards for a prize, and hang up on the caller. Legitimate contests do not require upfront payment, and taxes on winnings are paid to the IRS, not to the company that sent the prize. Report the call at reportfraud.ftc.gov, and if you already bought gift cards, contact the card issuer right away to ask about freezing them.
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Source: KOAA NBC5 Colorado Springs. Scam Sentinel summarizes this news report in plain language; it is a decision aid, not a guarantee.