Cen­tral Bank pro­vides warn­ing about pop­u­lar lot­tery scam

Serve Daily - - FOSTERING INNOVATION - By Diana Mathis

Ac­cord­ing to the FBI, in 2014 con­sumers lost more than $8 mil­lion to so­lic­i­ta­tion scams promis­ing in­stant wealth and grand prize earn­ings. These scams, com­monly re­ferred to as the “ad­vance fee,” “lot­tery” or “sweep­stake” scam, in­volve fraud­sters is­su­ing coun­ter­feit checks and fake award letters to con­sumers who have al­legedly won a lot­tery or sweep­stake raf­fle. The con­sumer, who most likely never en­tered the al­leged draw­ing, is is­sued a check worth more than the amount owed and in­structed to pay taxes and fees be­fore re­ceiv­ing their lump sum pay­ment. Un­for­tu­nately, the check - in ad­di­tion to the raf­fle - is bo­gus.

“Con­sumers fall vic­tim to lot­tery and sweep­stake scams at alarm­ing rates,” said Matt Packard, pres­i­dent and CEO of Cen­tral Bank. “It’s ex­tremely im­por­tant for them to rec­og­nize the red flags as­so­ci­ated with this type of fraud be­fore they de­posit any check they weren’t ex­pect­ing or send money to an un­known re­cip­i­ent by check or elec­tronic wire.”

Be­fore you par­tic­i­pate in any lot­tery or sweep­stake, Cen­tral Bank en­cour­ages you to keep these tips in mind:

• Don’t be fooled by the ap­pear­ance of the check. Scam artists are us­ing so­phis­ti­cated tech­nol­ogy to cre­ate coun­ter­feit checks that mir­ror the ap­pear­ance of le­git­i­mate checks. Some are coun­ter­feit money or­ders, some are phony cashier’s checks and oth­ers look like they are from le­git­i­mate busi­ness ac­counts. The com­pa­nies whose names ap­pear may be real, but some­one has dum­mied up the checks with­out their knowl­edge.

• Never “pay to play.” There is no le­git­i­mate rea­son for some­one who is giv­ing you money to ask you to wire money back or send you more than the ex­act amount — that’s a red flag that it’s a scam. If a stranger wants to pay you for some­thing, in­sist on a cashier’s check for the ex­act amount, prefer­ably from a lo­cal bank or one with a lo­cal branch.

• Ver­ify the re­questor be­fore you wire or is­sue a check. It is im­por­tant to know who you are send­ing money to be­fore you send it. Just be­cause some­one con­tacted you doesn’t mean they are a trusted source.

• En­sure a check has “cleared” to be most safe. Un­der fed­eral law, banks must make de­posited funds avail­able quickly, but just be­cause you can with­draw the money doesn’t mean the check is good, even if it’s a cashier’s check or money or­der.

• Re­port any sus­pected fraud to your bank im­me­di­ately. Bank staff are ex­perts in spot­ting fraud­u­lent checks. If you think some­one is try­ing to pull a fake check scam, don’t de­posit it— re­port it. Con­tact your lo­cal bank or the Na­tional Con­sumers League’s Fraud Cen­ter at fraud.org.

For more in­for­ma­tion about fake check scams and how you can avoid them, go to fakechecks.org.

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