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Foreign Lottery Scams

Q: Recently, I received a phone call telling me I won a Canadian sweepstakes. The caller said that he needed my credit card number for verification purposes but that I would not be charged. I just received my bill, and there is a $300 charge I don’t recognize. And I never received my prize. Is there something I can do to get my money?

A: Unfortunately, you are probably never going to get your prize money. Foreign lottery offers are a common scam. The Consumer Protection Division in my office receives an increasing number of complaints about this type of scam every year. The pitch that you describe is typical of the Canadian Lottery scam, with a twist. The lottery scam usually begins with a call from an enthusiastic and convincing telemarketer who informs you that you have won the Canadian Lottery. In some cases, the caller will tell you that to claim your prize, you need to wire him money for taxes. Instead, you never see your money again, and the prize never arrives. In a similar version of the scam, the caller asks for your bank account number so that the prize can be deposited directly. Instead, the con artists clean out your bank account.

With the ease and convenience allowed by the Internet, the con artists are finding new ways to steal money from unsuspecting victims. There are companies who offer credit card payment services for online merchants. When you purchase something on the Internet,

you often do so through these third-party billing companies. They collect the payment from the credit card company and forward it to the merchant you originally did business with. The vast majority of these billing companies are honest businesses that provide valuable services to merchants and consumers. However, when you do purchase items over the Internet, make sure you are dealing with a well established company that offers secure billing procedures.

Unfortunately, con artists are using these third-party billing companies to run their scams. As you describe, the telemarketer asks for your credit card number for verification purposes. Of course, he promises that you will not be billed. Instead, he takes your information and uses it to submit a charge to a third-party billing company, which sends the payment to him. The con artist gets your money, and you get nothing but an unexpected bill.

So what can you do? Challenge the charge with your credit card company. They may opt to investigate the charge and take action. If they don’t, you can file a consumer complaint through my office by calling 800-621-0508 to request a complaint form. You can also fill out a form online through our Web site at www.oag.state.tx.us.

You can protect yourself from falling prey to unscrupulous telemarketers in the future. If someone calls and tells you that you have won the Canadian Lottery or a sweepstakes you never entered, HANG UP. Never give out your credit card or bank account information to someone who calls you. Many consumers who lose money through this type of scam are revictimized by so-called “recovery center” scams. Victims who have lost money are contacted by an organization that claims it can recover the money they lost, but there is a small fee. These recovery centers are usually run by the very same people who stole the money in the first place.

Through an organization called Project PhoneBusters, Canadian law enforcement officials are working to combat these scams. You can report this scam to PhoneBusters by calling 888-495-8501 or by sending an e-mail to info@phonebusters.com.

There is more information on this type of scam on the organization’s Web site at www.phonebusters.com.