A fake prize scam begins by making the victim feel richer before any money has changed hands.
The message may announce cash, a car, electronics, or a sweepstakes win. It may borrow the name of a familiar company. The important part comes next: before the prize can be released, the supposed winner must pay taxes, shipping, handling, customs charges, or a processing fee.
The Federal Trade Commission’s rule of thumb is pleasantly simple: real prizes are free.
See the FTC’s guide to prize and sweepstakes scams and its 2026 prize-scam warning.
The fee changes the meaning of the prize
A legitimate prize gives value to the winner.
A scam prize first asks the winner to send value in the opposite direction.
That payment may be described as a small administrative step compared with the promised reward. A person who believes millions are waiting may see a few hundred dollars in fees as trivial.
That comparison is part of the trap. The large imaginary balance makes the smaller real payment feel reasonable.
Scammers also use urgency because verification is dangerous to them. The victim may be told the offer expires today or that the claim will be forfeited unless payment is made immediately.
Verify the award outside the notification
If you did not enter the contest, that is an obvious reason to be skeptical. Even if you did enter something, do not use the phone number, link, or payment instructions in the winning message as your proof that the message is real.
Find the organization independently and contact it through information you located yourself.
Do not send money, gift-card numbers, cryptocurrency, or account information to obtain a prize.
A prize notification should survive independent verification.
If the entire reward disappears the moment you refuse to pay a “processing fee,” there was never much of a prize to process.