An investigative study of prize and lottery scams found that between 2015 and 2017, more than 500,000 scams resulting in more than $344 million in losses were reported in the U.S. and Canada, according to the Better Business Bureau.
Included in the BBB's findings was the case of Ted Ruppert, a St. Louis area man in his 80s who lost nearly $8 million in a Jamaican lottery scheme.
The scams typically involve direct paper mail, calls or texts, or misleading pages on websites and social media promising unclaimed lottery winnings or giveaways. Scam targets, which are overwhelmingly elderly Americans, are typically asked to provide personal information and payments including shipping and security fees.
"It is one of the most common frauds operating today," said Michelle Corey, President and CEO of the BBB's Eastern Missouri & Southern Illinois division. According to BBB's Scam Tracker tool, at least 300 prize scams have been reported in the St. Louis region since the start of 2018. The tool allows people to report a business or offer that could be fraudulent to the BBB to spur an investigation.
Although Costa Rican callers and Nigerian social media users were large originators of scams, callers from Jamaica were some of the most active, according to the report.
Scammers will typically imitate a professional organization or company in a call or piece of mail. Once a victim gives up their personal information, they're put on a "sucker list," which is sold to other fraudsters.
BBB International Investigator Steve Baker said that on Facebook, one of the more popular social media channels for lottery fraud, scammers often impersonate Facebook founder Mark Zuckerberg or even create imitation profiles of the target's friends to lure them into sending money.
Scammers will also sometimes pose as Publishers Clearing House and ask people to pay fees to access their winnings, Baker said, despite the fact that Publishers Clearing House does not require this.
Typically, older people tend to be the most vulnerable, according to the BBB, because they tend to have more money and could be experiencing conditions including dementia or Alzheimer's disease.
Old age may have been part of the reason Ted Ruppert continued to send money to scammers who said he won $60 million even after years of receiving no reward, said Robert Hoffmann, a longtime friend of Ruppert's who attended a news conference Tuesday in St. Louis announcing the study's results.
"My first indication of this happening was Ted called me one day, and asked to borrow some money," Hoffmann said. "I'm thinking, what's a guy that's a multimillionaire doing asking for money?"
As months went on, Ruppert continued to pay various subsequent "fees" to Jamaican callers who said they would have the money delivered to his home, despite the warnings from friends and assistants, the BBB said. Once, when his secretary changed his phone number, scammers had a pizza delivered to his house and used the deliveryman to regain his contact.
Hoffmann said that Ruppert had been hoping to donate the winnings to his alma mater, the Missouri University of Science and Technology.
U.S. Postal Inspector Adam Latham offered some general tips to recognize if an offer might be a scam: "Were you told that you are the guaranteed winner of a lottery prize? Were you pressured into responding right away? Do you have to pay an advance fee to receive your prize? And, particularly for the Jamaican lottery, did you receive a call from the 876 area code, which is the area code for Jamaica?"
Anyone who suspects that they have been the victim of a mail scam can contact the U.S. Postal Inspection Service at 1-877-876-2455, and say "fraud" when prompted.