Hundreds of thousands of people have been conned by fake lottery scams, the Office of Fair Trading said.
The Office of Fair Trading (OFT) said the growing problem was costing the public an estimated £260 million, with 140,000 adults falling victim each year.
The average loss was £1,900 per victim - yet only 6 per cent of victims reported it to authorities, the OFT said.
Heather Clayton, senior director of OFT's Consumer Markets Group, said: "Lottery scams are a serious issue affecting 140,000 adults in the UK each year which is why we want people to recognise the warning signs. Remember that if a win looks too good to be true, then it probably is."
The scams often start with a promise of cash winnings and visions of a millionaire lifestyle in a letter, email or telephone call, the OFT said.
Paul Jay, of Camelot, added: "We never advise players that they have won a prize via an unsolicited letter, email or telephone call and we never ask for upfront fees or personal information.
"If you haven't purchased a ticket for The UK National Lottery, you won't have won a prize - and we would urge players to treat letters, emails and phone calls telling you otherwise with absolute caution."
Consumer minister Kevin Brennan said the Government was working to "stamp out" the scam.
He added: "We already have 'scambusters' teams throughout the country and, as we announced earlier this year, we are planning to set up new internet enforcement teams to target online scams in order to protect consumers."
For information on stopping people falling foul of lottery scams, visit www.consumerdirect.gov.uk/lotteryscams .