$12.5B
FTC-reported fraud losses in 2024
FTC says consumers reported losing $12.5 billion to fraud in 2024.
sweepstakes processing fee scam
Victims receive official-looking letters or emails claiming they won a sweepstakes but must pay a processing fee to receive their prize check.
“lottery scam”
↑ 72%Key indicators
Usually targetsOlder adults
Often hitsFreelancers and contractors
Common regionUnited States
Last updated2026-04-04
Estimated impact
$640
median reported loss
Typical range$40 – $4.0K
Recovery rate~15%
Scam breakdown
1
Scammers send convincing sweepstakes winning notices, sometimes including a fake check as proof
2
Victims are instructed to deposit the check and wire back a portion to cover processing fees
3
The original check bounces days later, and the victim is responsible for the full amount they wired
What to do first
Never pay any fee to claim a sweepstakes prize as legitimate sweepstakes cover all costs
Related terms
sweepstakes fee scamfake prize processing chargeadvance fee sweepstakes fraudLottery and prize scamsEmailRisingOlder adultsLow-income householdsFreelancers and contractorsSmall business ownersPayroll, HR, and finance teamsUnited StatesCanadasweepstakes fee scamfake prize processing charge
Real-world example
How this scam plays out in practice
Based on reported patterns. Names and details are illustrative.
The setup
Carlos, 35, a older adults, encountered what appeared to be a legitimate lottery and prize scams situation while using Email. Scammers send convincing sweepstakes winning notices, sometimes including a fake check as proof
Step 2
What happened next was calculated: Victims are instructed to deposit the check and wire back a portion to cover processing fees
Step 3
The pressure escalated quickly: The original check bounces days later, and the victim is responsible for the full amount they wired
The outcome
Carlos realized something was wrong when winning notification requires a processing or handling fee before the prize is released. By that point, significant damage had already been done — money sent, personal information shared, or trust exploited.
The lesson
Never pay any fee to claim a sweepstakes prize as legitimate sweepstakes cover all costs Carlos's experience shows why winning notification requires a processing or handling fee before the prize is released and check or money order is included that you must deposit and return a portion of are the clearest early warning signs.
How to identify it
- Winning notification requires a processing or handling fee before the prize is released
- Check or money order is included that you must deposit and return a portion of
- Sweepstakes organization cannot be verified through independent research
- 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
- ✓Never pay any fee to claim a sweepstakes prize as legitimate sweepstakes cover all costs
- ✓Do not deposit checks from unknown sources and wire a portion back as this is a classic check fraud scheme
- ✓Report sweepstakes fraud to the FTC and your state attorney general's office
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.
- ✓Keep the full sender address, domain, attachments, and—if possible—the raw email headers.
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 were the second-most reported fraud category in 2024
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.
- ✓Never pay any fee to claim a sweepstakes prize as legitimate sweepstakes cover all costs
- ✓Do not deposit checks from unknown sources and wire a portion back as this is a classic check fraud scheme
- ✓Report sweepstakes fraud to the FTC and your state attorney general's office
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 were the second-most reported fraud category in 2024
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
Older adults, Low-income households
Geographic concentration
United States, Canada
Primary channel
Email — Lottery and prize scams
Why this group is vulnerable
Older adults 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 were the second-most reported fraud category in 2024
Source notes
- FTC Consumer Sentinel 2025
Frequently asked questions
Common questions about sweepstakes processing fee scam
How does the sweepstakes processing fee scam work?+
Scammers send convincing sweepstakes winning notices, sometimes including a fake check as proof Victims are instructed to deposit the check and wire back a portion to cover processing fees The original check bounces days later, and the victim is responsible for the full amount they wired
What are the warning signs of sweepstakes processing fee scam?+
Winning notification requires a processing or handling fee before the prize is released Check or money order is included that you must deposit and return a portion of Sweepstakes organization cannot be verified through independent research
What should I do if I encounter sweepstakes processing fee scam?+
Never pay any fee to claim a sweepstakes prize as legitimate sweepstakes cover all costs Do not deposit checks from unknown sources and wire a portion back as this is a classic check fraud scheme Report sweepstakes fraud to the FTC and your state attorney general's office
Who is most at risk for sweepstakes processing fee scam?+
This scam primarily targets Older adults, Low-income households. It is most commonly reported in United States, Canada and typically appears on Email.
Is sweepstakes processing fee scam on the rise?+
sweepstakes processing fee scam is currently on the rise with growing reports. It has been reported across US, CA. 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.