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Is PayPal lottery winner a scam?

In recent years, there has been an increase in online scams related to lottery winnings. One such scam revolves around claims that the victim has won a lottery prize that can be collected through services like PayPal. This type of scam aims to steal money and personal information from unsuspecting victims.

What is the PayPal lottery scam?

The PayPal lottery scam works like this: You receive an unsolicited email, phone call, or social media message claiming that you’ve won a lottery or sweepstakes. The supposed prize is always for a significant amount of money. The scammers say you need to pay taxes, fees, or other upfront costs to claim your winnings. You’re told to send these payments through PayPal, an online money transfer service.

Of course, the backstory about winning a lottery or sweepstakes is fabricated. The scammers are trying to trick you into wiring them money through PayPal on the phony premise of collecting fake lottery winnings. Once you send money, you’ll never hear from the scammers again, and you won’t receive any lottery prize.

Common techniques used in the scam

Here are some of the most common techniques used in the PayPal lottery scam:

  • The scammers send an official-looking email claiming you’ve won a lottery or sweepstakes you don’t recall entering. The message includes fake claims about prize amounts and instructions for collecting your supposed winnings.
  • You receive a phone call out of the blue from someone who says you’ve won a lottery or sweepstakes. The details of the supposed prize are sketchy, but you’re given precise instructions for wiring an upfront “processing fee” through PayPal.
  • Scammers use social media platforms like Facebook to target victims. You may get a message through Facebook Messenger about a lottery prize. The scammer’s account often uses a fake name and profile photo.
  • The scammers pressure you to act fast to claim your prize before the opportunity expires. This is done to rush victims into wiring money without carefully vetting the legitimacy of the supposed lottery win.
  • You’re required to pay a fee before receiving your winnings. Scammers pretend the fee is for insurance, commissions, taxes, or other processing requirements — anything to make victims believe they must pay to get their prize.

These techniques aim to overwhelm victims with elaborate fake prize claims and urgent demands to make an upfront PayPal payment. Many scammers also use threats or high-pressure tactics about time limits to collect winnings. All of this is done to trick unsuspecting consumers into wiring money before realizing it’s a scam.

Warning signs of a PayPal lottery scam

Watch out for these common red flags that signal a PayPal lottery scam:

  • You’re contacted out of the blue about a lottery or sweepstakes prize you can’t remember entering.
  • The backstory about how you supposedly won a prize is vague, illogical, or otherwise suspicious.
  • You’re pressured to act immediately or risk losing your prize money.
  • Scammers ask you to pay an upfront fee allegedly to process your prize money.
  • You’re asked to wire the fee payment specifically through PayPal.
  • The scammers quickly follow up demanding additional payments for various phony fees and taxes.
  • Contact information for the company or prize sponsor is difficult to verify.
  • Errors and inconsistencies are evident in prize claim documents sent by the scammers.
  • The scammers refuse to speak with you by phone and rely solely on email or messaging.

If you see any of these signs or other red flags, immediately cease contact with the scammers. Legitimate lotteries don’t require upfront fees to collect winnings. Any supposed taxes, fees, or other charges would be deducted from prize amounts before you receive your winnings.

Who is targeted by the scam?

PayPal lottery scams cast a wide net targeting various demographic groups. But here are some common victim profiles scammers tend to focus on:

  • Seniors – Scammers assume seniors may be more trusting, lonely, or susceptible to lottery scams due to cognitive decline.
  • PayPal users – People known to use PayPal are obvious targets since scammers want victims to send money through the platform.
  • Sweepstakes enthusiasts – Those who enter many contests and sweepstakes get on marketing lists sold to scammers.
  • Social media users – Scammers scout popular sites like Facebook looking for targets by geography, interests, posts, and other information.
  • Landline phone owners – Many scammers focus on landlines assuming the users are elderly.
  • Low-income communities – Scammers target areas where people may be more desperate for a windfall prize.

Overall, scammers cast a wide net when carrying out PayPal lottery scams. They use email lists, social media, public records, and other means to identify potential victims across many demographics. But seniors, social media users, and PayPal account holders tend to be prime targets.

Actual cases of the scam

Many victims have reported falling for the PayPal lottery scam and losing significant sums of money. Here are a few real-world examples:

  • A 65-year-old man received an email stating he had won $5 million in a sweepstakes. When he called the provided phone number, the scammer posing as a lawyer convinced him to wire $8,000 in upfront taxes and insurance via PayPal. He never received his “winnings.”
  • A woman got a Facebook message that she had won $50,000 in an online sweepstakes. After providing her email, the scammers sent her documents showing she needed to pay $2,500 upfront to a PayPal account to cover processing fees. She lost her money after sending the PayPal payment.
  • A senior citizen got a call informing him he had won $2.5 million and a new car in a prize giveaway. The caller instructed him to wire $1,200 through PayPal to cover shipping fees for the car. After sending the money, the scammer disappeared without sending the promised winnings.

These examples show how scammers use the promise of lottery riches to manipulate victims into willingly sending money through PayPal. The phony fees can range from hundreds to thousands of dollars. Victims often continue paying in the hopes the promised lottery prize will eventually arrive, only to find out the entire thing was fraudulent.

Are there legitimate reasons to pay fees to collect winnings?

There are a few rare scenarios where you may have to pay minor processing fees to claim legitimate lottery or sweepstakes winnings:

  • Some online or app-based sweepstakes charge small entrance fees to cover administrative costs. Any taxes owed would still be deducted from winnings.
  • For lotteries in the U.S. and most other countries, you do not pay upfront fees to collect prizes. Taxes are automatically withheld.
  • Foreign lotteries occasionally require transfer fees to transmit prizes across borders into your bank account. But this is generally under $100.

However, outside of small sweepstakes entry fees or foreign transfer costs, it is virtually unheard of to have to make an upfront payment to claim a legitimate prize. And no major U.S. or international lottery would ever require winners to wire upfront fees to an individual through PayPal.

What you should do if you encounter this scam

Here are smart steps to take if you are targeted in a PayPal lottery scam:

  1. Immediately cease all contact with the scammers. Do not respond to any phone calls, emails, or other messages.
  2. Report the scam attempt to PayPal so they can shut down fraudulent accounts.
  3. Contact the FTC to file a complaint about the fraudulent business practices.
  4. Report the scam call to the FCC if scammers are using auto-dialers or spoofing caller ID numbers.
  5. Warn friends and family about new lottery and sweepstakes scams involving upfront PayPal fees.
  6. Carefully check your credit reports for any signs of identity theft stemming from information you provided to scammers.

The most important step is to cease all communication with the scammers. Never send them any money or provide additional personal information. Promptly reporting the scam attempt to authorities can get fraudulent accounts shutdown faster.

How to protect yourself from the scam

Here are some tips to help avoid falling victim to the PayPal lottery scam:

  • Be wary of unsolicited contacts – Real lotteries don’t contact you out of the blue. Hang up on suspicious calls and delete emails from unknown senders.
  • Never pay upfront fees – It’s a scam if you are asked to pay processing fees or taxes upfront before receiving winnings.
  • Don’t wire money to strangers – Never send money through PayPal, Western Union, etc. to someone you don’t know.
  • Verify prize claims – Use official government and lottery websites to confirm major prize claims.
  • Avoid sharing personal information – Don’t give out your Social Security number, bank details or other sensitive information.
  • Use strong passwords – Password protect your email, social media, and financial accounts.

Exercising caution around unsolicited lottery and sweepstakes notifications is key. Resist the pressure to act immediately and take time to verify any major prize claims before providing personal information or sending money.

Are there legal consequences for scammers?

There can be legal consequences for those caught running PayPal lottery scams, including:

  • Criminal charges – Scammers face potential felony charges for wire fraud, identity theft, money laundering, computer crimes, or racketeering.
  • Civil penalties – Scammers can face hefty financial judgments for telecommunications fraud, deceptive business practices, or violating consumer protection laws.
  • FTC sanctions – The FTC can levy fines and administrative penalties for unfair and deceptive trade practices.
  • Account restrictions – PayPal and other money transfer services ban fraudulent users and restrict suspicious accounts.

Despite these potential criminal and civil consequences, most PayPal lottery scammers operate internationally in countries with minimal legal and regulatory oversight. Many scammers also expertly hide their digital tracks making them difficult to identify, locate, and prosecute.

Can victims recover lost money?

Recovering money lost in PayPal lottery scams is very challenging. But here are some steps victims can take:

  • Report the scam immediately to PayPal. If caught quickly, they may be able to reverse or cancel the transfer.
  • Contact your bank and dispute any connected payments as fraudulent. This can help recover deducted funds.
  • Report lost money to your local police and obtain a case number. This creates an official record to provide PayPal or your bank.
  • File a complaint with the FTC detailing your experience. They track scam reports and share data with law enforcement.
  • Consult with an attorney about additional recovery options depending on your specific details and location.

Unfortunately, once scammers receive money through PayPal or another wire service, accounts are quickly drained making tracing and recovery extremely difficult. This underscores the importance of recognizing red flags before sending any payments.


The PayPal lottery scam is an insidious fraud that targets unsuspecting consumers with promises of lottery riches. Scammers rely on slick narratives about prize winnings and fake processing fees to manipulate victims into wiring money through PayPal. With a few simple precautions, these scams can be easy to spot and avoid through awareness of common red flags.

If targeted in a scam, cease contact immediately, alert authorities, and be very skeptical of any demands to wire upfront fees to collect supposed lottery winnings. Avoiding knee-jerk reactions and taking time to verify all major prize claims are the best defenses against losing money. With vigilance and healthy skepticism, individuals can protect their finances and personal data from the harms posed by the PayPal lottery scam.