Toronto Dominion Bank : How to spot a lottery scam

Most people have daydreamed about winning the lottery at some point.

Unfortunately, fraudsters use this opportunity to prey on Canadians in what is commonly referred to as a lottery scam.

How the scam typically works

Usually the fraudster will contact potential victims to tell them that they have won a lottery. The victims are then told they need to pre-pay taxes, legal or registration fees to claim their winnings. Fraudsters can contact victims over the phone, email, mail, text message or even through social media.

READ: How to spot the Canada Revenue Agency (CRA) scam

The promise of a windfall can sometimes blind a victim to the scam. One report from the Better Business Bureau noted that this type of scam resulted in losses of $117-million in Canada and the United States in 2017[i]. Like other scams, many victims are too embarrassed to report their losses, so that number is likely only a fraction of the true loss.

To help protect yourself against these types of scams, it's important to remember legitimate lotteries are regulated by laws, and do not require any form of pre-payment to claim winnings.

How to protect yourself

• If you don't remember entering the contest you've allegedly won, exercise extreme caution.
• Remember that you cannot be the winner of a lottery in a foreign country unless you have specifically purchased a ticket in that country.
• If claiming your prize has a tight deadline, be wary. 'Limited time' or urgency is a classic tactic that fraudsters use to pressure and trick their victims.
• Don't share your personal or financial information with others, including account numbers, PINs and credit card information.
• If it sounds too good to be true - it usually is.

If you think you've been the victim of a lottery scam

Report it: If you or a family member has fallen victim to a scam, report it to your local police, as well as the Canadian Anti-Fraud Centre.

Talk about it: If you've fallen victim to a scam, or even received a call and hung up - tell your story. The more people know about scams, the fewer chances fraudsters have to defraud people.