This scam is more devious than you think

A third of people have been targeted by this scam. Here's how to make sure you don't fall for it.

Here are a few facts about this scam...

• One in three people have already been targeted.
• 140,000 people fall victim to it every year.
• The average loss per victim is £1,900.
• Every year it costs the British public a staggering £260 million.

But which scam am I actually talking about?

Believe it or not, these facts and figures highlight the damage done by fraudsters who set up fake lotteries and lure in victims with the promise of huge cash prizes. So many people have been tripped up by fake lottery scams that the Office of Fair Trading (OFT) has issued fresh warnings against it.

How do fake lotteries work?

It's simple enough: you'll receive an unsolicited notification telling you that you've won a major cash prize in a lottery, draw or sweepstake. This might be sent by email or letter, or you might be contacted by phone.

The scammers often pass themselves off as a legitimate lottery operator, such as Camelot (which runs the National Lottery in this country), Spain's El Gordo lottery (Loterias y Apuestas de Estado) or the Canadian Lottery. So far, fraudsters have used the Canadian Lottery as a front to cheat British people out of £300,000. Lottery scams are usually based outside the UK, but they may use the UK post office or mail boxes.

To collect your winnings, you'll be told you need to pay an administration fee before any money can be released. You hand over the cash requested but surprise, surprise your prize never actually materialises, leaving you seriously out of pocket. Worse still, it's highly unlikely you'll ever see a penny of that money again.

But fake lottery scams aren't always as obvious as that. Sometimes you might only be asked to provide personal details to confirm your identity. This might seem reasonable enough, but the scammers are keen to extract this information from you to help them steal your identity, causing you a real financial nightmare. You can find out more about protecting yourself from identity theft by taking a look at Beat this rising fraud threat.

You may also be asked to provide your bank details so your winnings can be transferred into your account. But what you've really done is provide the fraudsters with all the information they need to help themselves to your money.

In other variations of the scam you may be offered the chance to join a bogus lottery syndicate, again in return for a registration or administration fee. Or you may be told you have won a non-cash prize, but you find that the item is worth much less in reality than the administration fee you pay to receive it.

Who is at risk?

You might think there's no way on earth you would fall for such a blatant scam. But it happens far more regularly than you might think, especially to the most vulnerable people, such as the elderly. This scam happens every single day and there's a pretty high chance you've already been targeted.

Fake lottery scams: the warning signs

Above all, if you never actually bought a lottery ticket or entered a prize draw, there's absolutely no way you can be a winner. This is the first sign that something seriously dodgy is going on and it should start the alarm bells ringing.

Here are the other warning signs to look out for:

• To collect your winnings, you're required to pay a fee to cover the operator's costs or taxes on your prize.
• You're asked to transfer money abroad, particularly to the Netherlands or Canada.
• You're asked to call a premium rate telephone number to claim your prize. This can be part of the scam itself.
• You only have a very short time in which to claim your winnings.
• You're required to supply personal information and/or bank details to prove your identity.
• The prize is listed in a foreign currency.
• You receive notification by email which reveals how much you have won. The National Lottery never tells winners the size of cash prizes by email.

What should I do if I'm targeted by a lottery scam?

If you think a scammer has contacted you report them via the Consumer Direct website. You can do that using this link. This information will be passed onto the OFT and Trading Standards for further action.

You can also warn other lovemoney.com readers and ask for advice on Q and A.

Finally, for genuine help on how to win bigger lottery prizes, read How to win big on the lottery.

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