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How to Avoid Foreign Lottery Scams

USPS(NEW YORK) -- By any accounts Clifford Curtis is an intelligent man.  He completed high school at age 16, and later became an engineer and an attorney.

So his daughter Laura was shocked when she noticed a Western Union receipt indicating her 83-year old dad had wired some unknown person $3,000.

Curtis was sending the money to collect his lottery winnings.  At least that's what he thought.  He'd received calls telling him he had won a foreign lottery.  All he had to do was pay fees and taxes and the millions would be his.

The elderly Washington State man had fallen victim to an increasingly common scam.

"There is just no question that this is really massive, and it really hits older consumers," said C. Steven Baker, director of the Federal Trade Commission's Midwest Region.

The FTC estimates that Americans are losing $1 billion a year to foreign lottery scams.

The U.S. Postal Service is so concerned that it teamed up with AARP and this week sent out 25 million mailers to older Americans, warning them to be on guard.

"Jamaica is the latest hot spot," said Paul Krenn, Assistant Inspector-in-Charge for the U.S. Postal Inspection Service.

So many scam artists are promising unsuspected Americans that they've won the Jamaican lottery, that officials are warning don't even answer phone calls from Jamaica's 876 telephone prefix.

There have been victims in 21 states, according to the U.S. Senate Committee on Aging, which will hold a hearing on this type of fraud next week.

"All foreign lotteries are scams," said Doug Shadel, a former fraud investigator who now heads ups AARP's Washington State office.  "It's illegal to participate in foreign lotteries, so that is the biggest red flag."  

He added, "Anytime anyone tells you you've won something and …you have to pay a fee, it's a scam, period."

Shadel says big losses are not uncommon: "We've seen people lose $300,000, $400,000.  And you might say to yourself, well they must be rich, so they can afford to lose that money.  No, that's ALL of their money."

The group has a nationwide Fraud Fighter Call Center (1-800-646-2283) for victims, or for those who want to question whether an solicitation they've received is fraudulent.

AARP says the most common victims of lottery scams are over age 70, often women, and with lower incomes and education levels.  Yet, as the Curtis case shows, it can happen to anyone.

"People think this only happens to dumb and senile people," said Baker.  "I can tell you that's not true."

Copyright 2013 ABC News Radio

ABC News Radio