The letter arrives with official-looking logos and exciting news about your million-dollar prize. The initial thrill quickly fades when you spot the fine print requiring upfront “processing fees” to claim your winnings. This scenario plays out thousands of times each year as scammers exploit our natural excitement about unexpected good fortune.

Sweepstakes scams affected 157,520 people who reported to the Federal Trade Commission in 2023, collectively losing $338 million. These scams consistently rank as the third most common fraud reported to the FTC, and they’re getting more sophisticated every year.

The Anatomy of a Sweepstakes Scam

Sweepstakes scams follow a predictable playbook designed to exploit our natural excitement about winning. The scammer contacts you through phone, email, text message, or traditional mail announcing your “big win.” They build excitement by asking how you’ll spend your winnings and urging you to celebrate your good fortune.

Then comes the hook: you need to pay fees to claim your prize. These charges masquerade as taxes, processing fees, shipping costs, customs duties, or insurance. The amounts often escalate—starting with a few hundred dollars, then requiring additional payments when “unexpected complications” arise.

Warning Signs You’re Dealing with a Scammer:

• You didn’t enter any contest but supposedly won
• Request for upfront payment of any kind
• Pressure to act quickly or lose your prize
• Claims the sweepstakes is government-sponsored or international
• Generic greetings instead of using your actual name
• Poor grammar or spelling in official communications

Publishers Clearing House: The Most Impersonated Name

Publishers Clearing House has become the gold standard for sweepstakes scammers because of its household name recognition. Ironically, the legitimate company recently paid $18.5 million in FTC fines for its own misleading marketing practices, but scammers have been exploiting PCH’s reputation for decades.

Here’s what the real Publishers Clearing House wants you to know: they never call, email, or text big winners. The famous Prize Patrol shows up at your door with cameras and balloons—not with demands for payment. PCH’s official website clearly states that winning is always free and they never ask winners to pay fees.

Recent reports show scammers are getting creative with PCH impersonation. Social media platforms have become popular venues for these schemes, with fraudsters contacting potential victims through Facebook messages claiming they’ve won substantial prizes. The scammer typically demands gift cards as “verification,” a classic red flag that should immediately end any conversation.

The International Lottery Trap

Foreign lottery scams represent another massive category of sweepstakes fraud. Scammers contact Americans claiming they’ve won international lotteries in countries like the UK, Spain, or Jamaica. Here’s the crucial fact: it’s illegal for U.S. citizens to participate in most foreign lotteries, so you can’t win contests you can’t legally enter.

These scams often target older adults with sophisticated psychological manipulation. Documented cases show victims losing tens of thousands of dollars to overseas scammers over extended periods. The schemes typically start with small “tax payments” for supposed multi-million dollar prizes, then escalate with repeated contacts about unexpected bank charges and additional fees.

The Fake Check Component

Many sweepstakes scams include counterfeit checks that appear genuine enough to fool bank tellers initially. Victims receive checks for partial winnings with instructions to deposit them and wire back money for taxes or fees. The checks may clear initially, but when they bounce days or weeks later, victims are responsible for the full amount—often thousands of dollars.

The FTC warns that banks can take weeks to identify fake checks, and by then, any money you’ve wired to scammers is gone forever. This aspect of the scam leaves victims doubly harmed: they lose the money they sent and become liable for the bounced check amount.

Your Shield Against Sweepstakes Scams

Remember the Golden Rule: Real prizes are free. You should never pay taxes, fees, or charges to claim legitimate winnings. Actual contest sponsors handle tax obligations through proper 1099 forms sent to you and the IRS after you receive your prize.

Verify suspicious communications independently. If someone claims you’ve won a contest from a legitimate company, look up the organization’s official contact information yourself and call directly. Don’t use phone numbers or websites provided by the supposed contest sponsor.

Take time to process the information. Scammers create artificial urgency (“This offer expires in 24 hours!”) to prevent you from thinking clearly. Legitimate winners get reasonable time to claim prizes—often 30 to 90 days.

Fighting Back When Targeted

If you receive suspicious sweepstakes communications, don’t simply ignore them—report them. Document everything: save emails, record phone numbers, and take photos of any letters or checks you receive.

Report sweepstakes scams to multiple agencies. The FTC’s ReportFraud.ftc.gov portal collects scam data that helps identify patterns and sometimes leads to prosecutions. The FBI’s Internet Crime Complaint Center also tracks these schemes, especially when they cross state or international boundaries.

For social media scams, report the fake profiles to the platforms where you found them. Facebook, Instagram, and other services rely on user reports to identify and remove fraudulent accounts.

When Scammers Strike Your Family

Sweepstakes scams disproportionately target older adults, who represent 42% of victims but account for 82% of total losses according to FBI data. If you have elderly family members, start conversations about these scams before they become targets.

Share this key fact: contest sponsors are legally required to disclose specific information including prize values, odds of winning, and redemption procedures. Any legitimate contact will include this information voluntarily.

Consider setting up Google Alerts for family members’ names combined with terms like “winner” or “sweepstakes” to catch potential impersonation attempts early.

The Bottom Line

Sweepstakes scams succeed because they exploit our dreams of financial freedom and unexpected good fortune. But armed with knowledge about how these schemes operate, you can protect yourself and your loved ones from becoming statistics in the FTC’s fraud reports.

Remember: if winning required paying money, it wouldn’t be winning—it would be shopping. Real sweepstakes companies make money from sponsorships and marketing, not from winner fees. When someone contacts you about a prize you didn’t knowingly enter, the safest response is skepticism followed by independent verification.

Your vigilance isn’t just protecting your own finances—every scam you report and every person you educate makes it harder for these criminals to succeed. In the fight against sweepstakes fraud, knowledge truly is your most valuable prize.