In this guide 10 sections
At a glance
The short version.
Watch for
- A win from a lottery, sweepstakes or prize draw you do not remember entering
- A fee, ‘tax’, customs or delivery charge to release the prize — or to improve your odds
- A request for bank account, card or identity details to ‘claim’ or ‘verify’ the win
Already acted?
Stop all further payments, whatever new fee or reason you are given.
See every recovery stepWhat is changing now
The current pattern.
Prize scams arrive by phone, text, email, post and social media. Some invent official-sounding organisations or pose as a government agency; others borrow the name of a company that runs real sweepstakes, a local business or a brand’s social media giveaway. The prize is released only after a payment described as tax, customs, delivery or processing — or after you hand over card, bank or personal details. In US fraud reports, older adults are much more likely than younger adults to report losing money to prize, sweepstakes and lottery scams.
How it works
How the scam unfolds.
The opening is good news: cash, a car, a holiday, a gadget or a gift card, announced by call, text, email, letter or a message on social media. The sender may use an official-sounding name, claim to be from a government agency, or borrow the name of a well-known sweepstakes company or local business. The same message is often sent to many people at once, even when it is written as if you were the only winner.
Then the prize is held back until you pay — ‘taxes’, customs duties, delivery, legal or processing fees, or a purchase — or share bank, card or identity details. Payment is often requested in ways that make it hard to trace who received the money, such as wire transfers, payment apps, gift cards, cryptocurrency or cash. Some scammers send a cheque and ask for part of it back; it can take the bank weeks to discover the cheque is fake, and you may then have to repay the money. Requests for new fees can continue for weeks, months or even years, and the prize never arrives.
Social media giveaways follow the same pattern with a friendlier opening. An account that appears to belong to a business you follow — a copycat profile, or the real one after it has been hacked — comments or messages to say you have won, then sends a link that asks for card or personal details to ‘claim your prize’. Whatever the channel, the useful question is not whether the prize sounds plausible. It is whether the organiser confirms it through contact details you found yourself, and whether anything is being asked of you before the prize arrives.
Warning signs
Reasons to stop and verify.
- A win from a lottery, sweepstakes or prize draw you do not remember entering
- A fee, ‘tax’, customs or delivery charge to release the prize — or to improve your odds
- A request for bank account, card or identity details to ‘claim’ or ‘verify’ the win
- Payment by gift card, wire transfer, payment app, cryptocurrency or cash
- Pressure to act now before the prize expires or passes to another winner
- A ‘government official’ or a brand’s look-alike account vouching for the win
Spot the signs
What it can look like.
Highlighted phrases are warning signs; the numbered notes explain each one.
fernhollow_home.giveaways1 (warning sign 1)
Two days after you commented on Fernhollow Home’s giveaway post
Congratulations! You have been chosen as a winner in our spring giveaway2 (warning sign 2): a £750 Fernhollow voucher and a garden furniture set.
To release your prize, please cover a £3.95 delivery and processing fee3 (warning sign 3). Enter your card details to claim: fernhollow-winners.example/claim4 (warning sign 4)
Unclaimed prizes are passed to the next winner after 24 hours.5 (warning sign 5)
- A look-alike account
The name borrows the brand but adds extra words. Anyone can create a profile like this and copy a logo; check the brand’s real page, found through its official website.
- A win delivered by direct message
Scammers watch the comments on real giveaways. Taking part in a genuine promotion does not mean this account is the one running it.
- A fee to release the prize
Real prizes are free. A small charge feels harmless, but collecting a payment is the point of the message.
- Card details through an outside link
A legitimate business has no reason to need your card number to give away a free prize. The link leads away from the brand’s own website.
- A deadline
The 24-hour limit discourages you from checking with the brand before you pay.
Find the brand’s official page through its website and check the winner announcement there, or contact its customer service. If the account is not the brand’s, report it to the platform and let the business know.
Composite example: names, numbers and “.example” addresses are fictional.
Worked example
A realistic pattern, separated into evidence.
This composite example is educational. It does not describe a real person or reproduce a live malicious message.
A prize-draw win needs a ‘tax and delivery fee’ today
- 01The opening
A caller tells a retired woman that she has won second prize in a national prize draw: a new car and £25,000. She enters magazine competitions from time to time, so the news does not feel impossible.
- 02The escalation
The caller says the car can be delivered this week once a £1,450 ‘tax and delivery fee’ is paid — in gift cards from a nearby shop, with the numbers read over the phone. A second caller, introduced as a government official, confirms the win and warns that the prize will be reallocated if the fee is not paid today.
- 03The decision point
Entering real competitions explains why the call feels believable; it does not link this caller to any of them. A fee before release, payment by gift card and a ‘government’ confirmation are the combination official warnings describe — and government agencies do not call people demanding money to collect a prize.
Independent verification
Test the request without using its evidence.
These checks deliberately move the decision away from the person, link, number or account that introduced the request.
- 01
Start with your own entry
Ask whether you entered, and where. A genuine organiser can be traced from your entry record, the published rules or its official website — without using anything in the message.
- 02
Contact the organiser independently
Use a phone number, email address or website you found yourself, or the brand’s official account reached from its website. Ask whether you have won. Do not use the number, link or ‘claims agent’ the message supplies.
- 03
Look for the same message elsewhere
Search online for the organiser’s name with words such as ‘scam’ or ‘complaint’, and check whether others report the same notice. A letter sent at a bulk postage rate went to many people.
- 04
Separate the prize from the payment
Note what you are asked to do before anything arrives. A request for money, gift-card numbers or bank details is not a routine claims step: real prizes are free.
Prevention
Make the next attempt harder.
- 01
Keep a note of what you enter
A simple list of the competitions, draws and lotteries you have entered makes an unexpected ‘win’ quick to check — and easier to set aside.
- 02
Agree a family rule about prizes
Agree that nobody pays a fee, buys gift cards or shares bank details for a prize without talking to someone else first. Older relatives are frequent targets, so pass the rule on to them too.
- 03
Check giveaways at the source
Before entering a social media giveaway, open the brand’s profile from its official website and confirm the post is there. A real winner announcement should be checkable in the same place.
- 04
Be selective about entering
Even genuine promoters may sell entrants’ details to advertisers, which can mean more calls, post and spam. Read the rules and enter fewer, well-known promotions.
If you already acted
Protect access and contact the real provider.
- Stop all further payments, whatever new fee or reason you are given.
- Contact your bank or card issuer straight away if you paid or shared card or account details, and ask what can be stopped or disputed.
- If you paid by gift card, payment app, wire transfer or cryptocurrency, contact the company that issued or handled the payment as soon as possible and keep the receipts.
- If you shared identity details, follow official identity-theft guidance — in the US, IdentityTheft.gov — and watch for accounts or credit checks you do not recognise.
- Report it: in the US to ReportFraud.ftc.gov (and to the Postal Inspection Service if the offer came by post), in Canada to the Canadian Anti-Fraud Centre, or elsewhere to your national fraud-reporting service.
- Treat any further contact about the prize — including offers to recover your money for a fee — with the same caution.
Common questions
Short answers to real doubts.
Do you have to pay taxes or fees to claim a prize?
A legitimate organiser does not ask you for money before releasing a prize. Official guidance from the US Federal Trade Commission, the US Postal Inspection Service and Canada’s Anti-Fraud Centre treats a demand for ‘taxes’, customs duties, delivery, legal or processing fees as a sign of a prize scam. Tax rules on genuine winnings differ by country; if you are unsure, ask your own tax authority or an independent adviser — never the person who contacted you.
Can you win a lottery you didn’t enter?
A lottery is won with a ticket or an entry. If you did not buy one, ask how you could have won and check with the organiser directly. Be especially wary of foreign lotteries: the FTC warns that messages about them are almost certainly from scammers, and it is illegal for US citizens to play a foreign lottery.
How can I tell if a social media giveaway is real?
Go to the brand’s official account through its website, not through the message, and check whether the giveaway and winner announcement appear there. You can also contact the business using details you already know are genuine. Be wary of any ‘winner’ message that asks for a fee, card details or a sign-in through a link. If the account is fake, report it to the platform and tell the business — its real account may have been hacked.
Should I deposit a cheque that came with a prize notice?
Be very cautious. A common version sends a cheque and asks you to return part of it to cover fees. It can take the bank weeks to discover that a cheque is fake, and you may then have to repay the money. Do not send anything back; ask your bank about the cheque and report the contact.
Sources
Official guidance used for this article.
Stop & Verify summarises these sources for general education. Reporting routes and legal protections vary by location.