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AARP AARP States Health & Wellbeing

Losing the (Fraud) Lottery

By Jean C. Setzfand, vice president of the Financial Security team in the Education and Outreach group at AARP

Jean Setzfand, Vice President, Financial Security, AARP Education & Outreach
Jean Setzfand AARP Education & Outreach
Danuta Otfinowski/Danuta Otfinowski

Joyce H., a 59-year-old unemployed woman raising four grandkids on her own, could barely believe her luck. A London barrister had emailed her, claiming to be relieved to have finally located her, because he was administering the will of someone he claimed was distantly related to her.

After exchanging a few emails with him – emails he used to stoke her excitement – he eventually called her. At 4:00 in the morning, he asked her, “Joyce, are you ready to get this money?”

She may have been half-asleep, but of course she was ready! In her own words, she describes herself as a “poor person,” struggling to pay rent on the roof over her family’s head.

All she had to do was go to Western Union and wire him $350 “as a show of good faith” on her part.

After entering countless lotteries and sweepstakes, she’d never won a single prize before. “No. Never. Not ever!” she said. “I used to think, ‘What is wrong with me – why can’t I ever win anything?’ I see people winning all the time – at the casino, playing the lottery.”

Fortunately – whether because she smelled the rat or just didn’t have the money – she balked. “What would I need to wire you $350 for when you have all that money right there? Take $350 out of that!” she says she told the barrister. “If you scam 100 people for $350 each – that’s a lot of money!”

Indeed it is. The U.S. Federal Trade Commission estimates that foreign-based lottery fraud alone bilks Americans out of literally billions of dollars a year. Moreover, the FTC estimates that more than 90 percent of lottery scams go unreported because the victims are too ashamed to file a complaint.

They shouldn’t be ashamed, because they are hardly alone. An estimated 10 percent to 15 percent of the U.S. population falls for one kind of scam or another each year, according to FTC research. Studies show that the average fraud victim is between 55 and 65 years old. Often, people with higher levels of education are more likely to trust their own judgment too much – and fall prey to scam artists too often.

Joyce herself summed it up well. “Us elderly people, we are often scammed by these things,” Joyce said. “They always try to work on us, because they know we are very vulnerable. We all need the money.”

With a hat tip to my AARP colleague, Doug Shadel, here are 10 tips for spotting and avoiding scams of all types, including fraudulent lotteries, “business opportunities” and Ponzi schemes:

  1. If anybody ever asks you to pay a fee to collect a “prize” you have won, they are trying to scam you.
  2. If anybody ever invites you to play a foreign-based lottery – or tells you that you have won such a lottery – they are trying to scam you. How do we know this? Because foreign lotteries are illegal in the U.S.
  3. Fraudsters will try to get you whipped into an emotional state of excitement. It doesn’t matter if the emotion is thrill, grief, guilt or anger – getting you into the emotional state is the goal. When you are in that state, you literally cannot access the rational part of your brain.
  4. Do not engage in personal conversation with people attempting to sell you an investment opportunity or “process your winnings.” They will collect personal details they can use to push you into the emotional state they need you in.
  5. With investment opportunities, make sure the person trying to sell you the investment product is licensed and registered. FINRA’s BrokerCheck database is a good place to start. Also, beware of investments sold by friends or members of an affinity group to which you belong.
  6. Before investing, investigate and fully understand what the company does to earn the return it is promising. If you don’t know how the company makes its money, it may be a Ponzi scheme.
  7. All that glitters is not gold. Never buy coins (or other investment opportunities) from a telemarketer, and never put an excessive amount of your investments in one type of vehicle – like gold.
  8. Even if you meet these salespeople in person and find yourself impressed with their offices and marketing materials, it could still be a scam. If you’re bilking people out of millions of dollars, you can afford to put a pretty glossy façade on it all.
  9. Learn more about how scam artists work their black magic. Read “Outsmarting the Scam Artists: How to Protect Yourself from the Most Clever Cons,” a book by AARP’s Washington State director, Doug Shadel.

10. Watch a free archived AARP-produced webinar about protecting your finances from fraud.

All that said, all you really need to remember is what your parents always told you: If it sounds too good to be true, it probably is.

Jean C. Setzfand is vice president of the Financial Security team in the Education and Outreach group at AARP. She leads AARP’s educational and outreach efforts aimed at helping Americans achieve financial ‘peace of mind’ in retirement. She can be reached at   or on Twitter at @JSetz.


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