The elderly are often targeted by prize draw scams
Victims of a prize draw scam are being unwittingly groomed as money launderers for other victims' savings, says a national watchdog.
The elderly scam victims have been duped into acting as "money mules" - banking cheques and then transferring money abroad, investigations show.
The Office of Fair Trading says this is the first case of its kind in the UK.
At least 22 pensioners have been caught up in the scam, which has collectively cost them £350,000.
Victims in Westminster, London, have been tricked into handing over their own money before being groomed by scam-artists into "processing" other payments.
This type of scam has been seen previously in the US and Canada, according to Sue Jones at Westminster Trading Standards.
How the scam works
Victim A receives a letter telling him or her that they have won a large amount in a prize draw, but must send money to "release" their prize
Victim A sends a cheque as instructed by the scam-artist to a UK address
The cheque arrives at the address of victim B
Victim B is told to send the same amount by untraceable electronic transfer to the scam-artist abroad
Victim A loses their money, having thought their money was going to a legitimate UK address
Victim B - who is still waiting for a prize from a previous scam - does not make or lose any money, but believes this is evidence that transactions are being made and their turn for a payout is coming
She urged people to ignore any unsolicited emails, letters or telephone calls claiming that they have won a prize draw.
Victims were told to send cheques, often for thousands of pounds, to UK agents in order to "release prizes held at UK airports".
The victims were less likely to be suspicious about the fraud because they were sending their cheques to UK addresses.
But these agents were in fact other victims who were told to pass on the money via electronic transfer to the fraudsters in Canada.
They did not receive any payment for being "money mules". They were told this money was from sponsors and would have been more likely to believe in the prize draw story, as they were seeing money changing hands.
It is the first time this combination of money mule and lottery scams has been seen in the UK.
"Prize draw scammers are becoming ever more sophisticated and devious in their attempts to con victims out of their life savings," said Mike Haley, OFT director of consumer protection.
One victim was encouraged by the fraudsters to borrow money once his own savings had run out - so he remortgaged his house.
He has since defaulted on his loan repayments and his bank has threatened legal action.
A 92-year-old man from Warwickshire lost thousands of pounds of his own money and laundered more than £17,600.
The scammers targeted him after his wife died. She was the scammers' original target and had already lost £15,000.