Lottery and sweepstakes scams are increasing and more Americans are falling victim according to the FTC (Federal Trade Commission). The New York State Consumer Protection Board reports that in the last seven months alone, more than 400 New Yorkers have lost money on these scams.

Lottery and sweepstakes scams work by tricking the consumer into thinking he or she has won a large cash prize, but insist on collecting taxes or insurance from the victim before the prize can be issued. In some cases a bogus check is sent to the victim with instructions to deposit it and then wire a smaller amount of money to the operators of the scam. In a few days the bogus check has bounced, but the money the victim sent is gone forever. Worse, these scam artists now have all the information they need to set up credit accounts in the names of the victims. This information can be sold to other scam artists as well.

The FTC warns:

Don’t pay to collect sweepstakes winnings. If you have to pay to collect your winnings, you haven’t won anything. Legitimate sweepstakes don’t require you to pay “insurance,” “taxes” or “shipping and handling charges” to collect your prize.

Hold on to your money. Scammers pressure people to wire money through commercial money transfer companies like Western Union because wiring money is the same as sending cash. If you discover you’ve been scammed, the money’s gone, and there’s very little chance of recovery. Likewise, resist any push to send a check or money order by overnight delivery or courier. Con artists recommend these services so they can get to your money before you realize you’ve been cheated.