Press Releases

For Immediate Release
March 28, 2006

"Winning" Can Make You a Loser
Beware of Prize Scams

(Madison) Everyone wants to be a winner, but some "prizes" aren't worth the price of "winning." One of the types of scams making the rounds currently, warns the Wisconsin Department of Financial Institutions (DFI), is a prize scam.

The details can vary, but essentially such schemes attempt to trick you into thinking you've won large amounts of money, and they usually involve the mailing of letters congratulating you for winning a foreign lottery or sweepstakes. Oftentimes, the letter will instruct the consumer to call the “lottery office” to claim the prize. Shortly after calling, the consumer will receive the prize in the form of a cashier’s check or certified money order with instructions that a certain amount of the funds must be wired back to the lottery office using a service like Western Union or MoneyGram. The instructions explain that such funds are needed to pay “taxes” or “administrative costs.”

Unfortunately, after wiring a payment back to the scammer, victims learn that the prize check is bogus, and they have now lost whatever money they sent to the con artist. The victim, of course, also must return any money received from the financial institution that cashed the phony prize check. Prize amounts usually range from $3,000 to $500,000.

Lorrie Keating Heinemann, Cabinet Secretary of the DFI, says, “A number of counterfeit cashier's checks bearing the name of a Wisconsin bank are currently in circulation. It appears all of these checks are in the amount of $3,850. The counterfeit checks contain a phone number that does not belong to any legitimate bank.”

Consumers have reported that the scam artist tells them to keep the matter entirely confidential, to not tell friends, family or especially the financial institution what’s going on, until after the wire transfer is complete. By that time, the scam artist has collected the money that was wired by the consumer.

In some versions, the con artist tells consumers that the winnings will be wired directly into their bank accounts. Victims who fall for this lie send their bank account information and later discover that instead of money being deposited into their account, money is actually withdrawn from it.

DFI offers these cautions to avoid becoming a prize scammer's victim:

Ignore mail, email messages, and phone calls stating you’ve won something but need to pay something to get your prize;

Be particularly suspicious if you know you didn't enter the competition or promotion that you've "won;"

Legitimate winners are notified by certified mail;

If you receive what looks like a check or money order for “winnings,” tell your financial institution how you received it, and from whom, so that it can be confirmed not to be counterfeit before you use any of the money;

Keep your bank account information to yourself. Scam artists commonly ask for this information and can use the information to withdraw money from your account.

For more information, please call 608:267-3518 or visit www.wdfi.org.