Check Scams Hitting SWLA Hard

April 13, 2007
Reported By: Lee Peck

Martha Bumgarden recently received word through mail from the Atlantic Lottery Corporation that she was one of six people to split more than 1.5 million dollars in winnings. Her share was $265,000.

"I was excited," said Bumgarden. "It said I won a lottery. I'm always entering stuff, especially if it's free. I send it off."

Bumgarden has been living in a FEMA trailer since her a fire destroyed her home stemming from damage during Hurricane Rita. She says the unexpected award was a godsend. Enclosed in the letter was a check for 4,922 dollars and a phone number to call.

"They told me that yeah, it was legit. I said look don't tell me it is if it's not because I live on a fixed income. They said no it is legit," said Bumgarden.

Bumgarden was instructed to deposit the check at her bank. Once it cleared, she was told to send $2,800 of that to an address in Canada for tax purposes.

"I know you have to pay taxes when you win money. I said okay... So I sent it to them, then the next thing I knew they called back and told me I had to send more money to them. And they wound up getting all the money," said Bumgarden.

The check bounced shortly after the second payment was made. Now the bank wants their money back. "I don't have it. I was hoping this was real, so I could get off disability and everything," said Bumgarden.

Carmen Million, President with the Better Business Bureau of Southwest Louisiana, says she sees hundreds of these cases every week.

"It's a scam that is really hitting our area hard," said Million.

Million says nationwide perpetrators are getting away with billions of dollars annually by using phony companies outside the U.S. She says that should be the first red flag.

"People need to understand that lotteries outside the United States are illegal. You are not eligible to win. You can't win and ultimately you are going to be a victim," said Million.

Recovering the money is virtually impossible. Million says she has contacted the local banks to make them aware, but says educating consumers to not get involved in these schemes is key.

"The only way to stop these companies from existing is to not send them money. If they no longer receive money, they no longer have the goods per say, then they can't exist," said Million.

As she's left wondering how she'll pay the money back, Bumgarden is warning others to be vigilant if they are targeted. "Be cautious. Very, very cautious. Do not deposit, do not cash it... Because it's a scam," said Bumgarden.

For more information or to file a complaint you can call the Better Business Bureau of Southwest Louisiana at 478-6253.

Alert from Lake Charles Better Business Bureau:

Potential victims across the country are receiving notifications via mail that they are 'lucky' lottery winners. The solicitation and check offer is a scam whose only intent is to defraud the recipient rather than bring good financial news. The volume of these types of letters currently going around is substantial, so if you think that you have been singled out as a lucky winner in a drawing or a lottery that you don't ever recall entering, think again before responding.

If an unsolicited letter with a notification that you have won an award is received in the form of a final notification or you are a winner it will also urge your direct and immediate response. In many occasions the recipient will find a check included with your own name on it. Exercise caution as you are being targeted by a scammer.

According to Carmen Million, BBB President, "These types of scams that feature phony lottery and drawing winners are growing and consumers need to be extremely vigilant if they are targeted. Never send a check or wire transfer money to any individual or company that you don't know. If the offer looks too good to be true it probably is."

Unfortunately, it is extremely difficult if not impossible to recover consumer's money once they have sent it to these scammers.

Lottery Scam Prevention Tips:

  • If you get an alleged award notification letter, several things become evident. The text of the winnings will have a very generic-sounding name, such as USA Mega Direct or USA Lotto Direct, both of which sound like you could have potentially entered.
  • You will then be congratulated on being a winner of a large amount of money, given a reference number, and subsequently asked to not make your winnings public just yet. For convenience's sake, you will almost certainly be given a name of a contact or financial secretary who is to allegedly help guide you through your award claims process.
  • What is necessary to keep in mind is that anytime anyone asks you to pay for something that they claim you have won, a red flag should go up. If anyone asks you to wire a payment via Western Union to Canada, another red flag should go up. If you happen to receive a solicitation of being an awards or lotto winner and then are provided with a check to allegedly cover taxes or fees, turn it into your local Postal Inspector's Office.
  • Many of these so-called contacts have in common is that they have a Canadian phone number for you to call- frequently out of Ontario and British Columbia- regardless of where they claim to originate.
  • Included with the letter will almost always be a legitimate looking check, with an amount that can range from several hundred to several thousand dollars. The solicitation will tell you that this check is to help you offset the pay for insurance, taxes, and shipping and handling fees which you will need to pay before you can claim your prize, and will then direct you to call their financial advisor in order to find out how to claim the winnings.
  • Sometimes this check may even be addressed as coming from a well-known and/or Fortune 500 company with wide name recognition, which may put you in a fake comfort zone. This is in actuality an instance of identity theft of a business, which may likely not be aware that its name and identity are being fraudulently used in a check scam.
  • As soon as you call the number provided on your solicitation, you will be instructed to deposit the check into your personal bank account. Here is where the essence of the check scam lays: as real as it may look, the check will not have any funds to back it up. Shortly after taking out what you think are the funds from the check, you will be instructed to wire a certain amount of money, usually via Western Union or MoneyGram, to a previously undisclosed third party location.
  • The money that you will be wiring will be your own, provided that you have enough in your account to cover the amount being sent. If not, within a few days your bank will realize that the check you deposited was a fake one, as a result of which it will bounce and you will be held liable for any insufficient fund fees at the least.
  • Remember, if it sounds too good to be true, it generally is.