$12.5B
FTC-reported fraud losses in 2024
FTC says consumers reported losing $12.5 billion to fraud in 2024.
prize check advance fee scam
Victims receive a check along with a letter claiming they won a prize but must pay taxes or fees upfront to claim their winnings.
“check scam”
↑ 34%Key indicators
Usually targetsSellers
Often hitsSmall business owners
Common regionUnited States
Last updated2026-04-04
Estimated impact
$960
median reported loss
Typical range$60 – $6.0K
Recovery rate~15%
Scam breakdown
1
The victim receives a check and a letter claiming they have won a sweepstakes or lottery prize.
2
The letter instructs them to deposit the check and wire a portion back to cover taxes or processing fees.
3
The check is counterfeit, and the victim loses the money they wired plus any bank fees.
What to do first
Remember that legitimate sweepstakes never require upfront payment to claim a prize.
Related terms
sweepstakes check scamlottery winnings advance feeprize notification fraudCheck and money order scamsMailRisingSellersSmall business ownersJob seekersSmall business ownersCreators and online sellersRemote workers and job seekersUnited StatesCanadaUnited Kingdomsweepstakes check scamlottery winnings advance fee
Real-world example
How this scam plays out in practice
Based on reported patterns. Names and details are illustrative.
The setup
Andrew, 35, a sellers, encountered what appeared to be a legitimate check and money order scams situation while using Mail. The victim receives a check and a letter claiming they have won a sweepstakes or lottery prize.
Step 2
What happened next was calculated: The letter instructs them to deposit the check and wire a portion back to cover taxes or processing fees.
Step 3
The pressure escalated quickly: The check is counterfeit, and the victim loses the money they wired plus any bank fees.
The outcome
Andrew realized something was wrong when notification says you won a contest you never entered. By that point, significant damage had already been done — money sent, personal information shared, or trust exploited.
The lesson
Remember that legitimate sweepstakes never require upfront payment to claim a prize. Andrew's experience shows why notification says you won a contest you never entered and you must pay taxes, fees, or shipping charges before receiving the prize are the clearest early warning signs.
How to identify it
- Notification says you won a contest you never entered
- You must pay taxes, fees, or shipping charges before receiving the prize
- Check arrives from a foreign bank or unknown financial institution
- Pause before paying, clicking, or sharing information. Scammers rely on speed.
- Verify the sender, company, or agency using a phone number or website you already know is legitimate.
- Treat secrecy, urgency, and off-platform payment requests as strong scam signals.
What to do now
- ✓Remember that legitimate sweepstakes never require upfront payment to claim a prize.
- ✓Do not deposit checks from unknown contests — it may constitute bank fraud even if you are the victim.
- ✓Report prize scams to the FTC at ReportFraud.ftc.gov and your state attorney general.
What to save before reporting
- ✓Save the message, profile, phone number, email, or URL that was used.
- ✓Keep payment confirmations, receipts, and account alerts before you dispute or delete anything.
- ✓Write down the timeline while the details are still fresh.
How big is this problem
You are not alone — this scam affects millions of people.
These numbers come from government agencies and official reports. If you have been affected, know that this is a widespread problem — not something that only happens to careless people.
FTC 2024 fraud losses
Imposters
Most common FTC fraud category in 2024
FTC says imposter scams remained the most commonly reported fraud category in 2024.
History and evolution
- This scam family tends to persist because the social-engineering pressure works even when the exact scripts, platforms, and payment methods change.
- The specific packaging evolves over time, but the core pattern usually stays the same: create urgency, control the channel, and push action before verification.
- The FTC reports that prize, sweepstakes, and lottery scams resulted in over 300 million USD in reported consumer losses in 2023.
Recovery and follow-up
- ✓Save the messages, receipts, account alerts, and transaction details before you block or delete anything.
- ✓Report the scam through the official platform or government channel that best matches where it happened.
- ✓Remember that legitimate sweepstakes never require upfront payment to claim a prize.
- ✓Do not deposit checks from unknown contests — it may constitute bank fraud even if you are the victim.
- ✓Report prize scams to the FTC at ReportFraud.ftc.gov and your state attorney general.
Why this pattern keeps working
Even when the story changes, most scams still use the same pressure pattern: urgency, authority, and a request to move money or data fast.
The FTC reports that prize, sweepstakes, and lottery scams resulted in over 300 million USD in reported consumer losses in 2023.
FTC Consumer Sentinel 2025
Where to report it
If you have been targeted by this scam, reporting it helps authorities track the pattern and protect others. United States has dedicated agencies that handle fraud reports.
ReportFraud.gov
Federal Trade Commission
Central U.S. consumer fraud reporting portal.
File an IC3 complaint
FBI Internet Crime Complaint Center
FBI portal for internet-enabled crime reports.
Start identity theft recovery
IdentityTheft.gov
Official U.S. identity theft recovery plan builder.
Explore further
Understand the bigger picture
Who is most at risk
Who this scam targets
Primary targets
Sellers, Small business owners, Job seekers
Geographic concentration
United States, Canada, United Kingdom, Australia
Primary channel
Mail — Check and money order scams
Why this group is vulnerable
Sellers are particularly vulnerable because this scam exploits trust in familiar brands, authority figures, and time-sensitive decisions. The growing number of reports suggests that awareness among this demographic remains low.
Sources and methodology
How we verify this information
OpenScam tracks scam patterns using a combination of government consumer protection databases (FTC, IC3, Action Fraud), platform-specific fraud reports, and verified consumer complaint data. Each entry is cross-referenced against at least two independent sources before publication.
Severity ratings are based on financial impact potential, reversibility of damage, and volume of reports across multiple reporting channels. Trend velocity reflects the rate of change in report volume over the most recent 90-day window.
This page was last verified on 2026-04-04. Red flags, recovery steps, and reporting resources are reviewed quarterly against current agency guidance.
Evidence and indicators
- The FTC reports that prize, sweepstakes, and lottery scams resulted in over 300 million USD in reported consumer losses in 2023.
Source notes
- FTC Consumer Sentinel 2025
Frequently asked questions
Common questions about prize check advance fee scam
How does the prize check advance fee scam work?+
The victim receives a check and a letter claiming they have won a sweepstakes or lottery prize. The letter instructs them to deposit the check and wire a portion back to cover taxes or processing fees. The check is counterfeit, and the victim loses the money they wired plus any bank fees.
What are the warning signs of prize check advance fee scam?+
Notification says you won a contest you never entered You must pay taxes, fees, or shipping charges before receiving the prize Check arrives from a foreign bank or unknown financial institution
What should I do if I encounter prize check advance fee scam?+
Remember that legitimate sweepstakes never require upfront payment to claim a prize. Do not deposit checks from unknown contests — it may constitute bank fraud even if you are the victim. Report prize scams to the FTC at ReportFraud.ftc.gov and your state attorney general.
Who is most at risk for prize check advance fee scam?+
This scam primarily targets Sellers, Small business owners, Job seekers. It is most commonly reported in United States, Canada, United Kingdom, Australia and typically appears on Mail.
Is prize check advance fee scam on the rise?+
prize check advance fee scam is currently on the rise with growing reports. It has been reported across US, CA, UK, AU. Last updated 2026-04-04.
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Help someone avoid this scam.
Scammers succeed because people do not talk about it. If you or someone you know has been affected, there is no shame in it — it happens to millions of people every year. Share this page with friends and family so they know what to look for.
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