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Scam Alert

Microsoft, Yahoo Fight Lottery Scams

After seeing a sharp increase in the number of e-mails using their brand names to conduct lottery scams, Internet service providers Microsoft and Yahoo announced that they are joining forces with two other companies to help law enforcement fight these common cons.

“We saw a 100 percent increase in e-mails about lottery and similar scams in the past year,” says Microsoft official Tim Cranton. Speculating that volume was up because fewer people were responding to the e-mails, he says, Microsoft commissioned a study to survey nearly 5,000 Internet users in five European countries.

That study revealed that one in 44 people surveyed had fallen victim to a lottery scam in which they sent money to crooks. In these “advance fee” ploys, an e-mail (or telephone call or mailed letter) reports that you have won a prize, but first you need to pay upfront fees, usually under the guise of covering insurance, processing charges or other expenses. Once those fees are paid, the claim goes, the lottery award will be paid.

In the Microsoft survey, victims reported an average loss of $123 before realizing they were responding to a bogus lottery or other “prize.” Many of these phony award notifications were from scammers using e-mail addresses ending in @microsoft.com or @yahoo.com, says Cranton. Scammers based in Africa, Eastern Europe and Asia often use the companies’ Internet services, and they open e-mail accounts under false names to hide their true identities and locations.

Sometimes respondents answering an e-mail telling them they’re lottery winners are mailed a counterfeit check, with instructions to deposit it in their bank accounts—and to wire the money for upfront fees, usually to an overseas address.

When advance fee payments are made, banks typically hold senders responsible for any wired money; once sent overseas, the money is lost forever, beyond the jurisdiction of U.S. law enforcement.

Joining Microsoft and Yahoo in fighting these crimes are the African Development Bank, which sometimes is falsely named as the distributor of fake lottery “winnings,” and Western Union, whose services are often used by victims to wire money.

Federal statistics indicate that Internet users age 50 and over may fall victim more often than younger people—a finding that Cranton saw in his company’s survey. “We do know that older people underreport how often they fall victim—usually out of embarrassment,” he says. “These scams work because they are based on trust, and that age group is more trusting.”

The four-company partnership aims “to encourage people who receive e-mails about lottery or other types of scams to report it to us,” Cranton says. Such reports can help identify specific patterns in the ways these scams are conducted and help local law enforcement agencies investigate.

The reports can be sent to:

• Microsoft at lotfraud@microsoft.com

• Yahoo at reportlotteryscam@yahoo-inc.com

• African Development Bank at security@afdb.org

• Western Union at spoof@westernunion.com

Victims are urged to also report e-mail scams to their local police, as well as to the FBI’s Internet Crime Complaint Center.

Sid Kirchheimer is the author of Scam-Proof Your Life (AARP Books/Sterling).

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