The “You’ve Won a Prize” Prize Money Scam
We all like to win prizes, and especially ones which entail winning large amounts of money, but beware! Cue the Prize Money Scam. If you know you're dealing with a legitimate company or organization (i.e. and not a fraud pretending to be that legitimate organization), then you've nothing to fear. However, too-easily winning large amounts from entities you've barely heard of, and maybe weren't expecting, is usually too good to be true. Even if they've already paid you!
What's the Prize Money Scam?
Okay, so you've so-say "won" some money. Maybe you were playing some online game and supposedly won, or maybe you were emailed out-of-the-blue that you'd won a prize in something that you didn't even know you'd entered, etc, etc. You get the idea. You can't believe your luck. And, best of all, after having provided your bank account details for them to pay you, lo-and-behold, a day or two later you see some of the "prize-money" arrive in your account. Satisfied that it wasn't a scam - they paid you after all - your defenses are lowered. Don't be so sure!
Now that the money has hit your account, you'll almost certainly get another communication from the scammer, asking you to send some, or all, of the money back, so as to confirm that you are really you, and that the details you provided were correct. They'll say something along the lines of needing to do this so they can verify/trust you, and once they've received the refund then you'll be entitled to receive the full prize money, which they will then send you.
Here's what happens:
- The scammers, posing as a legitimate company, say you've won a prize
- They ask for your bank details to send you a sizable amount of money
- You check your bank account, and sure enough they've sent you money
- They then contact you again, asking you to refund it, as a type of verification, so they can send you the full amount of prize money.
- Being as they already sent you money once, you trust them, and return it as requested
- However, the method by which you'll be required to return the money will be non-reversible. That is, there will be no way to stop or undo the transaction.
- Meanwhile, once you've refunded them as requested, they will reverse the transaction they used to send you the money in the first instance, and the so-called prize-money will disappear from your bank account.
- So, now you don't have the prize money, and you're also worse off to the amount which you refunded the scammers.
The whole basis for this scam is the fact that the method the scammers chose to send you the original money is a reversible type of transaction, whereas the method they'll insist that you use to refund them is not reversible.
What will happen if I don't send the refund?
Whether you send the refund or not, because the method they chose to pay you is reversible, the money will disappear from your bank account after a few days, regardless.
What do I do?
Very little. Whatever you do, you don't want to go spending the money or transferring it - the transaction will still get reversed. Plus, if the scam operation is laundering money then you want to be involved in no part of it.
If you want to do anything at all, just notify your bank that you believe the money may be part of a scam, so there's no perception of you being involved in doing anything dodgy. And, if you really wanted to, even though the chances of them doing anything are negligible, you may want to notify your police department.
The Moral of the Prize Money Scam
The age-old idiom: if it's too good to be true then it probably is.