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Financial losses due to prize scams rise amid the pandemic, BBB reports

The BBB reported Thursday an increase in money lost due to lottery and sweepstakes scams last year. Photo courtesy of Getty Images
The BBB reported Thursday an increase in money lost due to lottery and sweepstakes scams last year. Photo courtesy of Getty Images

June 10 (UPI) -- The Better Business Bureau said Thursday financial losses reported to U.S. and Canada agencies from prize scams rose amid the COVID-19 pandemic.

Financial losses from sweepstakes, lottery and prize scams reported to the Federal Trade Commission, the FBI's Internet Crime Complaint Center (IC3), and the Canadian Anti-Fraud Centre "rose dramatically in 2020 with the COVID-19 pandemic," the BBB announced.

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The announcement was based on research for a 2020 update to its 2018 investigative study on complaints to the same three federal agencies, which found nearly 500,000 people reported such fraud over the previous three years, and losses in 2017 alone of $117 million.

The BBB update showed the number of complaints to the three agencies had decreased 16% since the 2018 study, but the sweepstakes and lottery scams in 2020 resulted in higher financial losses than those in the previous three years, especially for older people.

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The FTC alone reported an increase of more than 35% in money lost due to the scams in 2020, the BBB added in the update.

"This updated research highlights how these scams work and the importance of educating older adults and other people who may be susceptible to these scams," BBB Internal Investigations Specialist Steve Baker said in the announcement. "Because these scammers are so good at what they do, anyone could be a victim."

The BBB warned consumers never to pay money to claim a prize and released a 30-second PSA on how to avoid such scams on YouTube Thursday.

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University of California professor emeritus Anthony Pratkansis told the BBB quarantine isolation helped scammers influence their victims last year.

"After profiling the victim, they take any role -- friend, authority, someone in need -- to best work their crimes," Pratkansis told BBB. "Scammers often talk to victims every day, grooming them and building trusting relationships. They take careful notes of the victim's family and other aspects of their lives, and like romance frauds, try to isolate victims from their traditional support structure. Scammers also employ different voices, sounding authoritative at one point, speaking as a partner at others, or even acting a supplicant asking for help to make the prize finally appear."

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