Unexpected lottery winnings are No. 1 scam
Joel Kulaszewicz's first thought was "Eureka!" when he opened his mail last week and found an unexpected check.
The check for $6,500 came with a letter from "Novation Capital Financial Services," announcing that Kulaszewicz had won a second prize of $255,000 in the USA Mega International Sweepstakes. All he needed to do was cash the enclosed check for $6,500 to help pay "for processing and tax fees" in the amount of $4,500.
Kulaszewicz said he smelled a rat.
"I started thinking, 'Why in the world would they choose me?'" the Cloquet resident said. "I don't enter contests anyway."
So Kulaszewicz started making phone calls. He called the Better Business Bureau, the State Attorney General's office, the Federal Trade Commission and even the local post office.
They all identified the letter as a scam.
"The state attorney's office had heard about this particular scam," the savvy senior citizen said. "They all told me the same thing -- don't cash the check."
According to the Minnesota State Attorney General's office, letters like the one Kulaszewicz received are the No. 1 consumer scam. Here's what the website (http://www.ag.state.mn.us/Consumer/Fraud) said were the top five scams:
1. Foreign Lotteries: The Foreign Lottery Scam is initiated by a call, letter, email or fax claiming that the consumer has won a prize in a foreign lottery or contest. Oftentimes this scam is combined with the Fake Check Scam. The fraudulent operator may also ask the victim to send money to cover fees for processing, legal operations, foreign customs, taxes, etc. No one has ever received their supposed winnings through this scam, and such scams violate federal law.
2. Advance Fee Fraud: Advance Fee Fraud is a long-running scam whereby an unscrupulous actor convinces a consumer to send payment or an "advance fee" in exchange for a line of credit.
3. Fake Check Scams: Another form of Advance Fee Fraud is known as the Fake Check Scam. Rather than paying the exact amount of a certain online transaction, however, the "buyer" will send a cashier's check for an amount in excess of the agreed upon value, asking the seller to wire the difference to the "buyer's" agent (oftentimes located in another state or country). Once the seller has sent the extra money onward, they learn that the check or money order is fraudulent and never hear from the "buyer" or the "agent" again.
4. Foreign Advance Fee Fraud: In this variation of the Advance Fee Fraud, the target of the scam receives a letter, email or fax from someone claiming to represent a foreign government entity, attorney, or relative of a foreign dignitary requesting "help."
5. Phishing: Fraudulent operators may try to "phish" for a consumer's private banking information in order to make unauthorized withdrawals from the consumer's account. Phishing begins with a call, letter, email or fax purporting to come from the victim's financial institution or another company that the consumer does business with. The correspondence typically requests that the consumer disclose or "verify" their private financial information.
Kulaszewicz said he wanted to share his story so other people would not be taken in by this or a similar scam.
"I figured other people get scammed to cash [the check] and then they're stuck," he said, noting that people are asked to wire $4,500 of their own money to claim their prize after cashing the check, which would eventually bounce. "The only prize I ever won was in a Cracker Jack box, so I figured it had to be a scam."
A call to the claim agent phone number listed on the letter ended with a voicemail message stating that the inbox had not been "initialized," or set up, by its owner, a definite red flag.