Lottery Scams Emerge as Major Internet Fraud

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FraudWatch International warns Internet consumers of the escalation of Lottery scams circulating via email. These scams involve advance fee fraud, typically seen in Nigerian 419 scams, and acts as a method to gather personal information used for identity theft. Lottery scam emails are increasing at an alarming rate. In April FraudWatch International received over 1000 variations, double the number of ‘phishing’ email scams received.

FraudWatch International warns Internet consumers of the escalation of Lottery scams circulating via email. These scams involve advance fee fraud, typically seen in Nigerian 419 scams, and acts as a method to gather personal information used for identity theft.

Lottery scam emails are increasing at an alarming rate. In April FraudWatch International received over 1000 variations, double the number of ‘phishing’ email scams received. “Consumers are paying big dollars to have their bogus winnings released to them. If it wasn’t working, the number of emails wouldn’t be increasing,” says Managing Director Trent Youl. “Victims are contacting us every day asking for assistance to recover their lost money. The bottom line is, once the fraudsters have it, recovery is unlikely.”

Grace is a victim. She received an email from OY Keikkaus Lottery notifying her that her email address had won US$2.5 Million. Grace says, “I was really excited then without considering the fact that I never joined any sweepstake lottery. I paid them US$2,000 for taxes and insurance and upon receiving that amount they told me that it’s not enough and advised me to borrow money from friends or mortgage our property. I actually followed whatever they said. I kept borrowing money to pay them until my brother pointed out typing errors in their correspondence. I searched the Internet and found FraudWatch International’s website and that’s how I found out this was a lottery scam. I burst into tears when I found out because my effort and money had been wasted. I hope this will serve as a lesson to others.”

Grace’s story is typical of the comments FraudWatch International receives from consumers who have lost money to these scams.

It begins with an email claiming the recipient has won a lottery. They are to contact a claims agent to collect their winnings, usually at a free email address. The unsuspecting consumer contacts the claims agent who sends a claim form to verify their identity. They must return the form with their personal details along with copies of their passport and driver’s license to “verify their true identity.” This is where the scam begins. The fraudsters now have enough information to duplicate the consumer’s identity.

The responding consumer receives an email with three options of how to collect their winnings. They can have the money wired to their bank account, they can open an account with a specified bank (bogus), or they can pick up their winnings personally (normally from Amsterdam).

Most people want their winnings transferred into their bank account. This involves upfront fees for taxes, insurance or even legal fees. Victims transfer money as requested via Western Union. If they do not want to pay upfront fees, they can open an online account with a specified bank, who’s ‘policy’ requires a deposit of around US$3,000. This bank is fake. Alternatively, victims are able to pick up their money personally by travelling to Amsterdam, where they are required to pay a release fee in cash, and receive their winnings in counterfeit currency.

Trent Youl believes that “because recovery of money is unlikely, education is the best defence in protecting consumers from these kinds of scams.”

FraudWatch International is committed to educating consumers on Internet Fraud and scams used to collect information for Identity Theft such as ‘Phishing’, Nigerian 419 and Lottery scams. The website contains a list of over 400 known lottery scam operatives with many example emails, and a list of 100 fake bank websites used in these scams. These can be found at http://www.fraudwatchinternational.com.

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Trent Youl
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