ONLINE PRIZE SCAM REQUIRING REPEATED FEES
(Philippine Context, in English)

1. Introduction

An “online prize scam” (sometimes called a “lottery scam” or “raffle scam”) typically starts with a notice claiming that an individual has won a large sum of money, a high-value item, or a luxurious vacation. The catch: the supposed “winner” must pay certain fees—such as “processing fees,” “taxes,” or “delivery charges”—in order to claim the prize. After each payment, the scammer often demands more fees under new pretenses. Despite repeated payments, the victim never actually receives the promised prize.

In the Philippines, these scams continue to proliferate due to increasing internet accessibility and social media usage. This article discusses how these scams operate, the legal framework that applies, warning signs, and remedies available to victims under Philippine law.

2. How the Scam Typically Operates

Unexpected Message
- Scammers contact their targets through various means: text messages, emails, social media messages, or phone calls.
- The message typically congratulates the recipient for “winning” a significant prize or raffle.
Legitimacy Through Fake Documentation
- Victims may receive fake documents or images of trophies, checks, or official-looking certificates.
- These materials often bear counterfeit logos from well-known organizations, government offices (e.g., Department of Trade and Industry, Bureau of Internal Revenue), or private sponsors.
Immediate Fees
- Victims are asked to pay initial fees, labeled as “processing,” “delivery,” “customs duties,” or “taxes,” allegedly required to release the prize.
- The scammer stresses urgency, pressuring the victim to deposit money or send payments through remittance centers or digital wallets.
Repeated Requests for Additional Funds
- Once the victim pays the initial fee, the scammer introduces new costs—insurance fees, foreign exchange charges, administrative fees, etc.
- The victim is repeatedly coerced into making more payments, sometimes until the victim’s financial capacity is exhausted.
Empty Promises and Disappearance
- Ultimately, no prize is delivered. The scammer may cut off communication, delete or block accounts, and vanish once they sense the victim will no longer pay or becomes suspicious.

3. Relevant Philippine Laws and Legal Framework

3.1. Revised Penal Code (RPC) – Estafa/Swindling

Estafa (Swindling) under Articles 315 and 316 of the Revised Penal Code is the principal law addressing fraud in the Philippines.
It penalizes acts where a person, by means of deceit, defrauds another.
Key Elements often include: (1) deceit or fraud; (2) damage to the offended party (financial loss); (3) the direct link between deceit and damage.
In an online prize scam, the scammer deceives the victim into parting with money based on a false claim of “winning a prize.”

3.2. Republic Act No. 10175 – Cybercrime Prevention Act of 2012

This law broadens the scope of criminal liabilities for offenses committed through information and communications technology.
Online Fraud: If estafa is committed using a computer system or the internet, it may be prosecuted under the Cybercrime Prevention Act.
Penalties for cyber-facilitated estafa can be one degree higher than those provided in the Revised Penal Code.

3.3. Department of Trade and Industry (DTI) Regulations

In the Philippines, any legitimate sales promotion or raffle must be registered with the DTI.
Official raffles and promotional campaigns must have a DTI permit number, typically displayed in advertising materials.
Scammers often misuse or fabricate DTI permit numbers; verifying a permit with the DTI can be a good precaution.

3.4. Data Privacy Act of 2012 (R.A. 10173)

While primarily concerning the protection of personal data, the Data Privacy Act underscores the importance of data security and privacy.
Scammers often gather personal information (bank details, IDs, phone numbers) that can be misused for identity theft or further scams.
Victims can report unauthorized collection or use of their personal data to the National Privacy Commission.

4. Warning Signs and Red Flags

Unexpected Win
- You receive a message claiming you won a prize from a contest you never entered.
Request for Immediate Payment
- Legitimate contests in the Philippines do not require winners to pay up-front fees.
- Charges such as “processing,” “insurance,” or “taxes” demanded in advance are strong indicators of fraud.
Poor Grammar or Generic Greetings
- Many scam messages contain grammar errors or generic salutations (e.g., “Dear Winner,” instead of your actual name).
Pressure and Urgency
- Scammers push victims to pay quickly to “avoid losing the prize.” High-pressure tactics are classic signals of fraudulent schemes.
Suspicious Sender Information
- Fake email addresses (e.g., free mail services) or phone numbers that are difficult to trace.
- Social media profiles that look new or contain few personal details.
No Verifiable DTI Permit
- Promotional campaigns in the Philippines must have a verifiable DTI permit. If a “lottery” or “raffle” is not DTI-registered, it is likely illegitimate.

5. Legal Remedies and Enforcement

5.1. Reporting to Law Enforcement

Philippine National Police – Anti-Cybercrime Group (PNP-ACG)
- Victims may file a complaint at the PNP-ACG for fraud committed via the internet.
- The PNP-ACG coordinates with other agencies to locate scammers and gather digital evidence.
National Bureau of Investigation – Cybercrime Division (NBI)
- The NBI Cybercrime Division handles complex or large-scale online scams.
- Victims may be required to submit proof of transactions, conversations, bank or remittance receipts, and relevant screenshots or messages.

5.2. Filing a Criminal Complaint

Estafa Complaint: Victims can file a complaint in the appropriate City or Provincial Prosecutor’s Office, attaching evidence of deceit and financial loss.
Once probable cause is found, the case may proceed to trial under the Revised Penal Code in conjunction with the Cybercrime Prevention Act.

5.3. Civil Action for Damages

Apart from criminal prosecution, victims may file a civil case to seek the return of the defrauded amount plus damages and legal costs.
However, recovery can be difficult if the scammer is not identified or has insufficient assets.

6. Preventive Measures and Best Practices

Verification
- Always verify any claim of a prize by checking with the supposed organizing entity.
- Confirm the authenticity of the DTI permit for any raffle or promotional campaign.
No Upfront Fees
- Genuine raffle or lottery wins do not ask you to shoulder any cost to claim your prize. Taxes or shipping fees (if any) are either deducted from the prize or covered by the organizer.
Secure Personal Information
- Limit sharing of personal information online.
- Be wary of providing sensitive details (ID numbers, banking details, etc.) to unverified persons or websites.
Watch Out for Pressure Tactics
- If someone demands money immediately under threat of losing a “huge prize,” it is almost certainly a scam.
Check Official Channels
- Government agencies (DTI, NTC, SEC) and legitimate organizations post warnings about ongoing scams.
- Stay updated on advisories through official websites or social media pages.
Report Suspicious Messages
- Report scam messages to the relevant platforms (Facebook, Instagram, etc.).
- Notify your mobile phone operator of spam/scam text messages.
- File a formal complaint with the PNP-ACG or NBI Cybercrime Division if you have already lost money.

7. Conclusion

The “Online Prize Scam Requiring Repeated Fees” is a persistent form of fraud in the Philippines. It exploits the hopes of unsuspecting individuals by deceiving them into paying multiple fees for a non-existent prize. Philippine laws—primarily the Revised Penal Code on Estafa, supplemented by the Cybercrime Prevention Act—provide legal remedies against such scams, and government agencies like the PNP-ACG and the NBI Cybercrime Division are equipped to investigate these cybercrimes.

However, prevention remains the best strategy. Recognizing red flags, verifying the legitimacy of promotions (especially checking for a valid DTI permit), and reporting suspicious activity to authorities are crucial steps to avoid becoming a victim. Ultimately, a combination of public awareness, diligent law enforcement, and responsible online behavior is key to curbing these fraudulent schemes in the Philippines.