Lottery and sweepstakes scams have been around for years, but they still ensnare seniors and younger individuals, sometimes for hundreds of thousands of dollars. One of the biggest operates out of Jamaica and several other countries, including Canada, Costa Rica, and Israel. Here’s how the so-called Jamaican lottery scam can lead to elder fraud and rob them of their savings:

1. Creating the list. Scammers collect seniors’ names from sources that include obituaries mentioning surviving relatives and legitimate mailing lists of people who’ve bought products widely sold to seniors. They also get names from list makers that operate bogus mass sweepstakes mailing centers and cater to scammers.

2. Testing the waters. Elder financial exploitation often begins with a mass mailing, sometimes personalized to each victim. The mailing may offer an attractive product or service, or mention that the victim is eligible for a lottery or sweepstakes. The mail-in return forms ask for personal information such as phone numbers and whether the victim has a credit card. They may also ask for a small fee—say, $20.

3. Homing in on ‘suckers.' The swindle may end there with the receipt of respondents’ fees. Or the scammers may create a more refined “sweepstakes list” or “sucker list” of respondents. They may use those lists themselves or sell them to others. Listed names are worth up to $6 each; the most valuable are older and alone, and often have a rural address.

4. Calling the ‘winners.' A scammer, often from abroad, using a phone system that masks the call’s origin, contacts a listed individual to announce that she has won a big prize. The catch: She has to pay fees or taxes up front—and keep the win a secret. The caller then directs the victim to wire or mail the funds to a third party’s bank account.

5. Moving the money. The third party sometimes flies the cash to Jamaica to deliver directly to the scammer or has another person, a “mule,” do it. Each participant in the swindle takes a cut, often 10 percent.

6. Extracting more. After a victim sends money once, a scammer will call more often—several times a day—for money or just to talk. To develop a relationship, he’ll probe the victim about her pets, hobbies, grandchildren, and other personal information. He may send her flowers or presents. The closer he gets to the victim, the more data he can extract, including Social Security and bank-account numbers. That information can be used to drain bank accounts and open credit cards in the victim’s name.

7. Bearing down. When victims say they can’t afford more, scammers suggest sources: reverse mortgages, cashed-in life-insurance policies, sales of property, cash advances on credit cards. A victim who balks will be told that her winnings are threatened; she may even be threatened with physical injury to herself or her family.

8. Creating an accomplice. Some victims are told that to redeem their winnings, they must accept checks from others and move funds to a third party. They unwittingly assist money launderers; some even become money-­laundering conspirators themselves.

9. Blocking escape. Scammers have been known to track down victims who have changed their phone numbers. Posing as a concerned child, a scammer directs a local plumber to visit his mother for a service call and to then phone from the house. The mother may deny that she needs service, but if she lets the plumber make his call from her phone, the scammer can use caller ID to reconnect.

10. Donning white hats. Scammers sometimes pretend they’re FBI agents, intent on helping victims recoup their lost funds. That service, of course, requires additional payments.

 

Editor's Note: This article also appeared in the November 2015 issue of Consumer Reports magazine.