The phone rings. A cheerful voice on the other end tells you that you’ve won millions of dollars, a luxury car, or an extravagant vacation. All you have to do is pay a small fee to release your prize. It sounds almost too good to be true, and that’s because it is.
This type of fraud has been around for decades, but the tactics used by scammers have grown sharper, more convincing, and increasingly costly. Understanding how these calls work is one of the most practical things you can do to protect yourself and the people around you.
The Numbers Behind the Scam
According to the Federal Trade Commission, consumers reported losing $145 million to prize, sweepstakes, and lottery scams in 2024, up more than $18 million from the year before. The actual losses are likely much higher, as fraud is notoriously underreported. That single statistic puts the scale of the problem in stark relief.
The FTC has seen a striking increase in reported fraud losses to all types of fraud, with about $16 billion reported lost in 2025 – the highest on record and an increase of about 25% compared to the 2024 figure. Sweepstakes and prize scams are a meaningful slice of that total.
The jump in losses is not driven by more fraud reports, but by more people actually losing money. In 2023, 27% of people who reported a fraud said they lost money, while in 2024 that figure jumped to 38%. Scammers are getting better at closing the deal.
How the Call Typically Goes
The initial contact in a sweepstakes scam may be a call, email, social media notification, or even snail mail offering congratulations for winning a big contest. There’s always a catch: you’ll be asked to pay a fee, taxes, or customs duties to claim your prize.
One common version begins with a call from someone using the name of a real Publishers Clearing House employee, claiming that you’ve won millions of dollars and a new car. You’re sent a photo of the car and told that celebrities will come to your house with your prizes. To collect them, though, you are told that you must first pay an IRS requirement or broker’s fee of a few hundred to several thousand dollars.
In similar schemes, scammers might reach out by text message, email, or a direct message on social media and claim to be with other companies or groups that run sweepstakes. Some might claim to be with a retailer, telling you that you’ve won a gift card or other prize. Some even say they are with the U.S. government or a foreign government and claim that you’ve won a government-supervised lottery.
The Fee Request Is the Tell
If someone tells you to pay a fee for “taxes,” “shipping and handling charges,” “processing fees,” or “customs duties” to get your prize, you’re dealing with a scammer. That request is the single clearest warning sign there is.
By definition, a sweepstakes is an advertising or promotional device by which items of value are awarded to participating consumers by chance, with no purchase or entry fee required to win and no fees or taxes to be paid prior to receiving the prize. Any departure from that definition should raise an immediate red flag.
Real sweepstakes are free and winning is by chance. It’s illegal for someone to ask you to pay to increase your odds of winning. Only a scammer will do that. The law is clear on this point, and legitimate organizations comply with it.
Publishers Clearing House Imposters Are Everywhere
Publishers Clearing House scams are particularly common, with impostors using the company’s well-known name to convince people they’ve won big money. The brand’s long history and reputation for genuine prize giveaways make it an especially effective tool for fraudsters.
The scheme involves scammers telling people they have won a large amount of money, sometimes by misusing the established name of Publishers Clearing House Sweepstakes. Victims send money, purportedly for taxes or other costs that must be paid before receiving a prize. Unfortunately, the winners don’t receive the promised prizes. Nearly 500,000 people have reported this fraud to enforcement agencies in the U.S.
In April 2025, the FTC sent more than $18 million in refunds to consumers harmed by misleading claims made by Publishers Clearing House itself, illustrating just how entangled the real brand has become with the fraud committed in its name.
Gift Cards: The Payment Method of Choice
To receive the prize money and a car, victims are simply told they have to pay a $400 delivery-and-activation fee in the form of gift cards. The gift card request is not random. It’s a deliberate choice by scammers.
The FTC notes that people increasingly are asked to buy gift cards to pay these fees, but they may also be asked to pay via wire transfer or bank deposit into a specified account, or even cash sent by mail. Each of these methods shares one important feature: the money is nearly impossible to recover once it’s gone.
No real contest will require you to wire money or buy gift cards for “verification.” That request alone, no matter how politely or urgently it is delivered, is enough to hang up the phone.
Older Adults Are the Primary Target
People over the age of 55 continue to be the primary target of sweepstakes, lottery, and prize scams, representing 72% of fraud reports for this type of scam received by BBB Scam Tracker during a recent three-year period. That is a striking concentration of victimization within a single age group.
Of the older consumers who were targeted, 91% reported that they lost money. Adults over 55 lost an average of $978, while those aged 18 to 54 lost an average of $279. The financial gap between age groups reflects how aggressively these scams are tuned to exploit older victims.
Sweepstakes scams zero in on seniors because older adults tend to trust official-looking communications, may live alone, and can be more receptive to friendly voices on the other end of the phone. Scammers study these patterns and exploit them deliberately.
The Fraud Keeps Growing Year Over Year
The FBI Internet Crime Complaint Center documented $138 million in lottery, sweepstakes, and inheritance scam losses from victims age 60 and older in 2025, up from $88 million in 2024, a jump of more than 57% year over year. That pace of growth is difficult to ignore.
Over the five-year period from 2021 to 2025, total reported losses in this category reached $409 million across 13,294 victims, with a five-year growth rate of 163%. The peak year of 2025 had 3,837 reported victims, substantially more than any prior year.
Since 2020, reported fraud losses have increased nearly 430%, according to the FTC. That trajectory reflects both the growing sophistication of scammers and the expanding range of channels they use to reach potential victims.
When Scammers Pretend to Be the Government
According to FTC complaints, operators of these scams send personalized mailers, some with fictitious government agency names and official-looking seals, to hundreds of thousands of consumers. The appearance of authority is central to making the scam feel credible.
Some scammers even say they are with the U.S. government or a foreign government and claim that you’ve won a government-supervised lottery or sweepstakes. This tactic plays on people’s instinct to trust official institutions.
The FTC itself will never demand money, make threats, tell you to transfer money, or promise you a prize. Any call or letter claiming to be from a government agency and asking for a payment to release your prize is fraudulent, full stop.
How the Scam Continues After the First Payment
Sometimes fraudsters convince people to send even more money by telling them their winnings will arrive soon. Many continue to call people for months and even years after defrauding them out of an initial sum of money. Each payment is framed as the last obstacle standing between the victim and their prize.
Sweepstakes scammers sell and trade mailing lists. If you pay money to win a prize or pay to receive information about potential prizes, you will just land on more mailing lists. The first payment doesn’t end the relationship. It often begins a longer campaign of repeat targeting.
The perpetrators of sweepstakes scams are fly-by-night operators who conceal their identity to avoid detection. Once your money is sent, it is usually lost for good. Recovery is rare, and even law enforcement actions often come too late to return funds to individual victims.
What You Should Do If You Get the Call
If you have to give your financial or personal information, it’s a scam. There’s absolutely no reason to ever give your bank account or credit card number, or personal information like your Social Security number, to claim any prize. If they ask for this information, don’t give it. Delete any messages without clicking links, and don’t respond.
You cannot win a lottery, sweepstakes, or contest you did not enter. If you receive a notification of winning by phone, email, letter, or social media about a contest you did not personally sign up for, it is a scam. That rule alone eliminates most of these calls immediately.
If you or someone you know has received one of these calls, you can report it directly to the FTC at ReportFraud.ftc.gov. Reporting matters. People who report to the FTC about losing money to a scam receive next steps information on how to try to recover their money. These reports are also a vital part of the agency’s law enforcement mission and help warn consumers about fraud trends.
The Takeaway
Sweepstakes fraud works because it taps into something genuinely human: the hope for a lucky break. There’s nothing embarrassing about feeling that pull. The scammers who design these calls understand it well, and they’ve spent years refining their scripts to make that excitement override caution.
The clearest protection is also the simplest one. Real sweepstakes are usually free to enter and free to win. If you’re being asked to pay, especially with a gift card, it’s almost guaranteed to be fraud. No legitimate organization will ever ask you to hand over money before receiving a prize.
The next time that cheerful voice calls to say you’ve won, remember that the prize isn’t real. What’s real is the fee they’re asking for. Hang up, and tell someone else to do the same.
AI Disclaimer: This article was created with the assistance of AI tools and reviewed by a human editor.