Lottery and Prize Scams: Why Winners Never Pay to Collect

A lottery or prize scam is a call, SMS or WhatsApp message telling you that you have won money, a car, a phone, or a foreign lottery you never entered — followed by a demand to pay a "processing fee," GST, or customs duty before the prize can be released. The single most important thing to know: a real prize never requires you to pay anything to collect it. If someone is asking you to scan a QR code or send money via UPI to "release" your winnings, hang up, do not pay, and do not scan anything they send you.

If this is happening to you right now, skip ahead to "If it is happening right now" below. Everyone else, keep reading — this scam has run in India for decades by post and phone, and it has simply moved onto WhatsApp, SMS and UPI.

How the scam actually works

The script barely changes; only the channel does.

Step 1 — The message arrives out of nowhere. A call, SMS, WhatsApp message or email tells you that you have won a lottery, a lucky draw, or a prize from a brand you recognise — a car, a smartphone, gold coins, or a large cash sum, framed as a "KBC Lottery," a courier company's "anniversary draw," or a foreign lottery. You are told your number was "randomly selected."

Step 2 — The excitement call. A person calls, warm and congratulatory, claiming to represent a well-known company, courier firm, or TV show. They ask you not to tell too many people "until the formalities are complete" — this isolates you from anyone who might tell you to stop.

Step 3 — The first payment. You are told a small "processing fee," "registration charge," or "advance tax" must be paid before dispatch. They send a UPI QR code or UPI ID and push urgency: "the prize will be reallocated if payment is not received today."

Step 4 — The fees multiply. Once you pay, a new charge appears — GST, customs duty (if the "prize" is framed as coming from abroad), a courier fee, an "RBI release code" fee, or a lawyer's "documentation charge." Each one is described as the last step.

Step 5 — The story adapts, then goes silent. If you hesitate, the caller may turn aggressive or send a fake courier number or a doctored "RBI approval letter." Eventually the phone goes unreachable or the WhatsApp number stops working. The prize never existed — every rupee paid to "release" it is a real loss.

A related version skips the call entirely: a WhatsApp message with a QR code says "Scan to claim your anniversary gift." Scanning a UPI QR code to receive money is not how UPI works — QR codes are for paying, not receiving — so any QR you're asked to scan to "collect" a prize is the fraud itself.

The red flags

None of these alone proves a scam, but even one should make you stop and think.

If it is happening right now

1. Stop. Do not pay any fee, tax, or charge to receive a prize, no matter what it is called or how small. A real prize is never conditional on paying first.
2. Do not scan any QR code sent to you to "claim" money. A UPI QR you scan is for paying out, not receiving — treat any such request as the scam itself.
3. Do not share OTPs, card numbers, CVV, or net banking credentials with anyone claiming to verify your eligibility.
4. Hang up or stop replying. You do not owe an explanation to someone attempting to defraud you.
5. Verify independently, if in doubt. Look up the company's official customer care number yourself — never the number given in the message — and ask directly whether the promotion is real.
6. Tell a family member before doing anything else. Saying it out loud is one of the fastest ways to break the pressure these scams create.

Checking a QR code before you pay anything

Some versions ask you to scan a QR to pay a disguised "fee." Before paying anything connected to a prize or lucky draw, check exactly who the money is going to.

The free Bachao UPI Scanner app decodes a UPI QR code with your camera and shows the payee's UPI ID, name, and amount before any payment happens; it never auto-opens or pays on its own. It gives a 0–100 risk score with plain-English reasons, flags look-alike or misspelled bank/PSP handles, and flags fraud-bait wording and pre-filled high amounts. High-risk scans get a short delay before you can proceed, and you can report a UPI ID as a scam directly in the app.

If you have already paid or shared details

Speed is what decides whether any money can be recovered — the longer the gap between paying and reporting, the further your money moves through other accounts and the harder it becomes to trace.

1. Call 1930 — the National Cyber Crime Helpline — immediately, to request a freeze on the receiving account before the money moves further.
2. File a complaint at cybercrime.gov.in, the government's National Cyber Crime Reporting Portal, with every detail: UPI ID or QR image, transaction ID or UTR number, phone numbers, screenshots, and any "certificates" sent to you.
3. Call your bank's official number — from their website or the back of your card, never a number given by the caller — and ask them to flag the transaction and attempt a freeze.
4. Preserve every piece of evidence. Do not delete messages, call logs, or the QR image until your complaint is filed.

Protecting family, especially elderly parents

Retired parents and grandparents are frequent targets — these scams exploit the hope of an unexpected windfall, and older family members may be less familiar with how UPI QR codes work.

1. Explain, plainly, that a QR code pays money out, never receives it — this single fact defuses most "scan to claim" messages.
2. Agree on a family rule: any call or message about winning something gets a phone call to you before any payment or scan, no exceptions.
3. Remind them that a genuine prize needs no payment first, and that you had to have entered something to win it.
4. If it has already happened, remind them gently that reporting immediately matters far more than feeling embarrassed — these calls are run by people who do this for a living, not a sign of anyone's carelessness.

The chart below is an illustrative breakdown of the kinds of fees scammers commonly invent to keep a victim paying — not a measured statistic.

This guide is published by Bachao.AI, a product of Dhisattva AI Pvt Ltd, a DPIIT-recognised startup working on scam awareness for Indian consumers.

For official guidance, see the Reserve Bank of India and NPCI, which runs UPI. To report a lost or misused mobile number tied to a scam call, use the government's Sanchar Saathi portal. Read more scam-awareness guides on the blog.