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Scam Alert

Lottery Rip-offs: When Winning Means Losing

Here's 10 ways to spot a lottery scam

lottery sweepstakes contest lottery scams fraud internet email gorilla suit fake check winning winnings win winner (iStockphoto)

If you didn't enter a contest, you didn't win — no matter what you may be told. — iStockphoto

En español | When the Powerball jackpot reaches the Gross National Product figure of some countries, it's hard to resist spending $2 on six numerals — even with the odds of winning at 1 in 175 million.

But in umpteen conning contests, lottery and sweepstakes scammers seem to have their own winning number: your age.

Are you between 55 and 64? You're nearly twice as likely to fall for prize promotion schemes compared with other Americans, according to Federal Trade Commission data. People 65 and older have almost triple the "gotcha" rate.

It's become too familiar: You get an email, phone call or letter saying you've won a jackpot, often a foreign lottery. But there's a caveat: To receive your winnings, you're told, you have to first pay taxes, or fees for insurance or other expenses. It's usually requested via a wire transfer or Green Dot prepaid Money Pak card. You send off the money, and guess what? No payout ever arrives.

Reported losses from these "winnings"? More than $1 billion a year. And you can be sure the figure's much higher, because most victims — particularly older ones — are too embarrassed to admit to getting duped by a scam that reigns among the most prevalent.

So when lottery fever hits, know these 9 facts to prevent getting burned.

1. Any lottery or sweepstakes requiring upfront fees is a scam. The one exception involves "skill contests" (solving puzzles, submitting recipes, etc.), where participation may legally require a small entry fee or purchase.

But know that if you do win a legitimate contest, a portion of your jackpot may immediately be withheld for federal and state taxes, and you're responsible to pay any balance when filing that year's taxes (the IRS and your home state are notified of winners).

2. If you didn't enter a contest, you didn't win — no matter what you may be told. If you play Powerball or a state lottery and win, it's up to you to produce the ticket as proof; lottery officials don't contact you.

3. If congratulations come with a check — with instructions to deposit it and send a portion back — the check's a fake. No legitimate contest issues partial-payment checks and asks for a portion back. Counterfeit checks are often used in lottery scams. Your bank may accept them and credit your account. But if you forward any funds, you'll lose them and will be on the hook for any other money drawn from that deposit.

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