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Sweepstake Scams Shot Up 33% In 2020

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CBS4's Anna Werner explains.

Video Transcript

ELIOTT RODRIGUEZ: Now to a CBS4 News consumer alert. The amount of money Americans lost in prize and lottery scams last year shot up 33% compared to 2019.

- According to the Better Business Bureau, about $227 million were stolen. CBS News consumer investigative reporter Anna Werner reveals the red flags that we all should watch out for.

KATHY CHAPMAN: I never would have thought my dad would be susceptible. This, it really shocked me.

ANNA WERNER: Kathy Chapman can't believe her 84-year-old dad fell victim to a sweepstakes scam. It started with calls to his Michigan home in January, she says, from someone who claimed to be from Publishers Clearinghouse. They told him he'd won money and more, just like the people in those familiar ads. In his case, $2.5 million, a brand-new BMW, and gold medallions. All he had to do was pay some taxes and fees.

But after he withdrew thousands of dollars at multiple locations, his credit union alerted police, who called his daughters. And when they asked him about it--

KATHY CHAPMAN: He said, I just have to pay some taxes and fees, and then I'm going to get this big prize. And I said no, Dad, that's not how it works.

ANNA WERNER: Chapman discovered her dad had been instructed by the scammers to mail them packages of cash. In all, he lost $72,000.

KATHY CHAPMAN: I'm still really angry. He's done nothing to anybody. You know, he's worked hard his whole life and got taken advantage of.

STEVE BAKER: This is huge organized-crime business.

ANNA WERNER: And Better Business Bureau investigator Steve Baker says those scammers are professionals. His report says those con artists often talk to victims every day, building trusting relationships. They take careful notes of the victim's family and try to isolate them from family and friends, and they'll use any method they can.

STEVE BAKER: Sometimes it's through the US mail, text messages, emails, social media.

ANNA WERNER: Like this fraudulent email claiming to be from Publishers Clearinghouse with photos of winners and a message from the board chairman. But a closer look reveals clues like typos-- for example, how the company pleases to advice its supposed winners of their delivery and presentation date.

Chris Irving with Publishers Clearinghouse.

CHRIS IRVING: If your viewers get an email, a call, any contact, a letter that says you've won a prize but you have to send money, rip up the letter, hang up the phone, and report it to law enforcement because that's a scam.

ANNA WERNER: A scam Chapman says took much of her father's life savings. Anna Werner, CBS News, Berkeley, California.

- Now if you've lost money to a scam, report it to the Better Business Bureau, the FTC, and local law enforcement.