the focus of a new OFT campaign.
Thousands of UK residents have already received unsolicited phone
operating out of Canada.
How does the scam work?
People respond to an unsolicited mailing or phone call telling them
they are being entered into a prize draw. Their names are then added
to a target or 'sucker' list which is made available to numerous
direct-marketing and telemarketing operators.
Victims then receive an unsolicited phone call from Canada
congratulating them on winning the 'big prize' in a National Lottery
such as the Canadian, Australian or Spanish. The victim is told that
before they can claim the prize, they must send money to pay for
taxes and processing fees.
The OFT is aware of people who have lost up to £67,000 as they
respond to more and more telephone calls demanding payments to cover
costs in order to receive their prize. The prize doesn't exist, and
they never receive any winnings in return for their cash.
Why do people respond to the calls?
People are led to believe that they have won hundreds of thousands of
pounds so sending one or two thousand pounds in taxes to claim the
prize seems like a small cost in comparison. As people send more and
more money to claim their prize, it becomes difficult for them to cut
their losses and they become caught in the trap of, 'well, I've sent
£3,000 already, I might as well send more.'
Who is at risk?
The elderly are particularly at risk. Over 80 per cent of victims are
more than 65 years-old, but anybody can receive a phone call. In many
cases victims have received a number of phone calls from somebody who
tries to befriend them, asking them about their family and interests,
before they call them again to tell them they have won a prize. The
caller may pose as a government official, customs officer or lawyer.
Evidence shows that most victims do not report the crime through
embarrassment. Some fear that they may lose control of their finances
because of their age.
How big is the problem?
Over the past year there has been a large increase in the number of
cases reported to the OFT about the Canadian lottery, with more than
300 complaints since August 2003 alone. It is estimated that UK
consumers have already paid out £10-£15m to the scam. Research
has also shown that there are 15 call centres in Canada solely
targeting the UK. One centre is already known to have defrauded UK
consumers of around £450,000.
The OFT Campaign
The OFT is launching a campaign to make people aware of the 'Canadian
lottery' scam. It is urging people not to respond to these telephone
calls and to encourage them to alert their family and friends to the
scheme and it dangers.
The OFT is working closely with the Canadian authorities to try and
take action against the fraudsters. The Canadian authorities have
already had some major successes arresting over 50 people and closing
down numerous call centres. Where the Canadian law enforcement
officers have been provided with evidence, they have also been able
to disrupt the fraudsters' activities and intercept maildrops.
A telephone hotline has been set-up by the OFT to collect evidence
which the Canadian authorities can use to prosecute the fraudsters.
Although, the OFT cannot take up cases on behalf of individuals,
anybody who has received a phone call and/or sent money to the
Canadian lottery can call the hotline to give their evidence and help
put a stop to the scam. The number is: 020 7211 8111.
What to do if you receive a phone call?
If you receive a phone call the general advice is:
- be cautious: if you have doubts about a caller - hang-up
- never send any money in order to receive a prize
- don't give out private f inancial information
- Canada doesn't have a national lottery like the UK.
How to spot a scam
There are a number of key behaviours that people can look for to spot
- if it sounds too good to be true, it probably is
- you are often asked for money up front to release your 'win'
- you are asked for your bank account, credit card details or other
- the caller is more excited than you
- the stranger who calls wants to be your best friend
- you must reply straight away or the money will be given to someone
Penny Boys, OFT executive director, comments:
'This is a professionally organised operation and the people involved
are very persuasive. By alerting consumers to such scams we hope
people will recognise the tactics they use and will think again about
sending their money away.'
Visit the OFT website for more information: www.oft.gov.uk/consumer
Real life case studies:
- Mr J received a phone call from a representative of the First
National British Holdings in Canada and was told he had won
£225,000 on the Canadian National Lottery. The caller told him that
under Canadian Law he was required to pay a tax of 1% of the
winnings, £2,250. Mr J then received a series of calls from
individuals who claimed to be Canadian and UK customs officials,
lawyers and file administrators. He sent six further payments for
customs fees, insurance levies, and legal release fees due to the
series of convincing calls which included claims that First
National British Holdings had gone into administration. By the time
Mr J received a call claiming to be from UK Customs, asking for
£2,000 he felt he couldn't afford to cut his losses and sent the
Mr J lost £18,750 in total. At no point did he contact any UK or
Canadian Authorities and was only tracked by materials seized in an
arrest in Toronto.
- Ms T received a call from a representative of Global Call Centre
stating that he knew a guaranteed way of winning the Canadian
lottery. The caller said that all Ms T had to do was forward a
cheque for £49 to an address in Vancouver. Within a month of
this contact Ms T received a series of telephone calls asking her
to send money to pay for the tax on her winnings. She sent a total
of approximately £200 in tax payments but has never received any
form of prize.
- Mr N received a call from the 'Head of the Legal Department' and
told he had won £250,000; he would just need to send a 1.5% tax of
£3,750 to the Toronto Authorities. Within a month he had received
another call claiming the tax was also payable to the Vancouver
Authorities and he would need to send a further £3,750. Mr N never
saw his prize but he did receive more calls from an individual
claiming he had won £250,000; again the release of this prize was
subject to a £3,750 payment for tax.
- Mrs K received a number of different phone calls claiming she had
won between £4,500 and £135,000. The callers claimed to be from
Canada and Australia and she sent a number of payments of between
£60 and £2,000 for taxes and release fees. She never received any
1. A new gateway for disclosure to overseas public authorities under
Enterprise Act 2002 (Section 243) has made it easier for the OFT to
work with overseas counterparts by enabling the sharing of
information which will allow civil proceedings and the investigation
2. The OFT will be holding an emergency summit with a number of
consumer organisations and those who represent the interests of
senior citizens such as Age Concern and Help the Aged.
3. The OFT is also coordinating the response from UK Law Enforcement
agencies including the Met Police, National Criminal Intelligence
Service, Th e Royal Canadian Mounted Police Interpol and Trading
4. The OFT is working with the Royal Mounted Canadian Police, the
Competition Bureau of Canada, Phonebusters, the Ontario Provincial
Police, the Toronto Police, Ontario Ministry of Consumer and Business
Services and the Attorney General's Office for British Colombia.
5. Canada does not have a state backed national lottery. Super Sevens
and the 6/49 are legitimate private lotteries which operate
nationally in Canada, neither is state funded and the calls do not
emanate from them.