Lottery Scam

A lottery scam is a fraud that announces a win, a prize, a sweepstakes result or an unexpected inheritance, and then requires the recipient to pay something before it can be released. The FBI's Internet Crime Complaint Center runs it as "Lottery/Sweepstakes/Inheritance Fraud" and defines it as an individual being "contacted about winning a lottery or sweepstakes they never entered, or to collect on an inheritance from an unknown relative." The Federal Trade Commission's article is titled "Fake Prize, Sweepstakes, and Lottery Scams", and it files the subject under "Prize and Grant Scams".

No agency uses the short phrase "lottery scam" on its own, and that is worth saying because the scheme is not confined to lotteries. It arrives as a sweepstakes, a prize draw, a grant, a contest, a settlement or a bequest, and the structure does not change with the wrapper.

Where this differs from advance fee fraud generally, which is the structure it belongs to, is that the prize version has a definition in federal law that the general case does not. That makes the central claim on this page provable rather than merely good advice: a lawful sweepstakes cannot require a payment, because the statute defines the word in a way that excludes one.

The statutory definition, and why it settles the question. Title 39 of the United States Code governs what may be sent through the mail, and section 3001(k) defines its terms before it prohibits anything. It says that "the term 'sweepstakes' means a game of chance for which no consideration is required to enter." Consideration is the legal word for what you give up to take part. A promotion that requires you to pay in order to enter, or to pay in order to collect, is therefore not a sweepstakes at all within the meaning of the statute, and the FTC states the consumer version of the same point flatly: "Real prizes are free", and "it's illegal for someone to ask you to pay to increase your odds of winning."

The mailing rules are specific, and they are a checklist a genuine promotion has to satisfy. Section 3001(k)(3)(A) makes a mailing nonmailable if it includes sweepstakes entry materials and fails any of a list of requirements. The mailing, the rules and the entry form must each disclose that no purchase is necessary to enter, and that a purchase will not improve the entrant's chances. All terms and conditions must be stated. The sponsor or mailer must be identified with a principal place of business or a contact address. The rules must state the estimated odds of winning each prize, the quantity, estimated retail value and nature of each prize, and the schedule of any payments made over time. And the mailing is nonmailable if it represents that people who do not buy may be disqualified from future sweepstakes mailings, if it requires an entry to be accompanied by an order or payment, or if it "represents that an individual is a winner of a prize unless that individual has won such prize."

That last item deserves a sentence of its own. Telling someone they have won when they have not is not merely dishonest; it makes the mailing nonmailable matter under federal law.

The lookalike check has its own rule, and it is the most concrete tell in the whole area. The statute defines a "facsimile check" as matter that "is designed to resemble a check or other negotiable instrument; but is not negotiable", and then makes a mailing nonmailable if it "includes any facsimile check that does not contain a statement on the check itself that such check is not a negotiable instrument and has no cash value." So a promotional check that carries no such statement on its face is already outside what may lawfully be mailed. A check that a recipient is invited to deposit is a different and worse thing, and the mechanism there belongs to the overpayment scam.

The exception that proves the rule: skill contests may charge. The same subsection defines a "skill contest" as "a puzzle, game, competition, or other contest" in which "a prize is awarded or offered", "the outcome depends predominately on the skill of the contestant", and "a purchase, payment, or donation is required or implied to be required to enter the contest". So a paid entry is lawful where the contest is genuinely one of skill, which is why the statute then requires a skill contest mailing to disclose the number of rounds or levels and the cost to enter each one, that later rounds will be more difficult to solve, the maximum cost of entering all rounds, and the estimated number or percentage of entrants who solve it. The FTC's warning on the same point is practical: a skill contest "can ask you to pay to play", but entrants "might end up paying repeatedly, with each round getting more difficult and expensive, before you realize it's impossible to win or just a scam."

A right most people do not know they have. Section 3001(l) requires anyone mailing this kind of matter to "adopt reasonable practices and procedures to prevent the mailing of such matter to any person who" submits a written request to be left alone, either directly to the mailer or through a state attorney general who passes it on. The request can be made by the person themselves or "through a conservator, guardian, or individual with power of attorney", and the mailer must keep records permitting suppression of that name and address for five years from the request. For a household worried about an older relative buried in prize mail, that is a usable, statutory step rather than general advice.

The dressing, and the two tells that survive it. The FTC records operators claiming to be from the government, using "fake names like the 'National Sweepstakes Bureau,' or pretend they're from a real agency like the Federal Trade Commission", and its answer is that "the government won't call you demanding money to collect a prize." Where a mailing is involved there is a second, physical tell: the FTC advises checking the postmark, because "if your 'notice' was mailed by bulk rate, it means many other people got the same notice, too", which contradicts the premise of a personal win.

Scale, dated and attributed. In the FBI's 2025 Internet Crime Report, Lottery/Sweepstakes/Inheritance Fraud drew 5,623 complaints and $194,147,851 in reported losses. The age concentration is the striking part: 2,785 of those complaints came from people aged 60 and over, roughly half. And the comparison with its structural parent is worth noting, because it runs against expectation. Advanced Fee Fraud, as the FBI spells it, produced more complaints, 7,762, and a smaller loss, $155,910,852. The prize version reaches fewer people and takes more from each of them.

The sequence is short, and every step exists to get past a specific objection.

1. The notification, by letter, call, email or message, announcing a win in something the recipient does not remember entering. The FTC notes that scammers "make it seem like you're the only person who won a prize", while the same notice went to many people.
2. The reason a payment is needed. Taxes, shipping and handling, processing fees, customs duties, or an insurance bond. The label varies and the function does not.
3. The rail. The FTC's list is wiring money through a company like Western Union or MoneyGram, a payment app, cash, gift cards or cryptocurrency, "because it's hard to track who the money went to. And it's hard to get your money back."
4. Sometimes an instrument arrives first, a check or money order presented as an advance on the winnings, with an instruction to deposit it and send part of the money on. That is the overpayment mechanism, and it has its own page.
5. A second fee, because the first payment established that the recipient pays.

A hypothetical example, and the arithmetic is the operator's rather than the victim's. A mailing announces a $2,500 prize and asks for a $19.95 "processing fee" to release it. Apply the statutory test rather than judging the amount: a payment is required to collect, so under federal law's definition this is not a sweepstakes, and if the mailing represents the recipient as a winner when they have not won, it is nonmailable matter regardless of how small the fee is.

The $19.95 is chosen with as much care as the $2,500. It is small enough that checking feels disproportionate, small enough to fall below the threshold at which most people would call anybody, and small enough that discovering it was wasted produces embarrassment rather than a complaint. Run it at scale and the arithmetic belongs to the operator: 40,000 mailings at $19.95 is $798,000, and no prize is ever awarded. The fee is not a step towards the prize. The fee is the product.

A lottery scam has no upside, so what follows is what settles it and what does not.

What genuinely settles it

• The definitional test. A sweepstakes is a game of chance requiring no consideration to enter, so any required payment, however labeled or however small, answers the question by itself.
• Reading the mailing against the statutory checklist: does it say no purchase is necessary, identify the sponsor and an address, state the odds and the value of each prize? A promotion that fails those is not merely suspicious.
• Checking a lookalike check for the statement that it is not negotiable and has no cash value, which federal law requires to appear on the check itself.
• Checking the postmark on a mailed notice. Bulk rate means the same notice went to many people.
• Checking whether the agency exists, which disposes of the invented-bureau version in a single search of the real federal agency list at usa.gov.
• Using the written suppression request under 39 USC 3001(l), which a conservator, guardian or attorney-in-fact may make on someone's behalf and which the mailer must honor for five years.

What does not settle it

• The size of the fee, which is set low precisely so that it does not trigger the check.
• Official-looking paperwork, seals and case numbers, all of which are printed by the person asking for the money.
• A check in your hand, which can look genuine to bank staff for weeks and is the subject of its own entry here.
• A payment you sent yourself, which sits on the authorized side of the line federal electronic-transfer rules draw.
• Wire transfers, gift card codes, cash and cryptocurrency, none of which has a reversal mechanism.