Capitalizing on the popularity of legitimate sweepstakes and prize offers, con artists disguise their schemes to look legitimate. And, an alarming number of people take the bait. Every day, consumers throughout the United States lose thousands of dollars to unscrupulous prize promoters. In fact, the Federal Trade Commission (FTC) and the Arizona Attorney General receive thousands of complaints each year from consumers about gifts, sweepstakes and prize promotions. Many consumers received telephone calls or postcards telling them they'd won a big prize - only to find out that, to claim it, they had to buy something or pay as much as $10,000 in fees or other charges.
There's a big difference between legitimate sweepstakes and fraudulent ones. Prizes in legitimate contests are awarded solely by chance, and contestants don't have to pay a fee or buy something to enter or increase their odds of winning. In fraudulent schemes, however, "winners" almost always have to dip into their pockets to enter a contest or collect their "prize."
A Dozen Ways to Protect Yourself
The next time you get a "personal" letter or telephone call telling you "it’s your lucky day," remember that:
- Legitimate sweepstakes don’t require you to pay or buy something to enter, improve your chances of winning, or pay "taxes" or "shipping and handling charges" to get your prize. If you have to pay to receive your "prize," it’s not a prize at all.
- Sponsors of legitimate contests identify themselves prominently; fraudulent promoters are more likely to downplay their identities. Legitimate promoters also provide you with an address or toll-free phone number so you can ask that your name be removed from their mailing list.
- Bona fide offers clearly disclose the terms and conditions of the promotion in plain English, including rules, entry procedures, and usually, the odds of winning.
- It’s highly unlikely that you’ve won a "big" prize if your notification was mailed by bulk rate. Check the postmark on the envelope or postcard. Also be suspicious of telemarketers who say you’ve won a contest you can’t remember entering.
- Fraudulent promoters might instruct you to send a check or money order by overnight delivery or courier to enter a contest or claim your "prize." This is a favorite ploy for con artists because it lets them take your money fast, before you realize you’ve been cheated.
- Disreputable companies sometimes use a variation of an official or nationally recognized name to give you confidence in their offers. Don’t be deceived by these "look-alikes." It’s illegal for a promoter to misrepresent an affiliation with — or an endorsement by — a government agency or other well-known organization.
- It’s important to read any written solicitation you receive carefully. Pay particularly close attention to the fine print. Remember the old adage that "the devil is in the details."
- Agreeing to attend a sales meeting just to win an "expensive" prize is likely to subject you to a high-pressure sales pitch.
- Signing up for a sweepstakes at a public location or event, through a publication or online might subject you to unscrupulous prize promotion tactics. You also might run the risk of having your personal information sold or shared with other marketers who later deluge you with offers and advertising.
- Some contest promoters use a toll-free "800" number that directs you to dial a pay-per-call "900" number. Charges for calls to "900" numbers may be very high. You can find out more about charges related to toll-free numbers at : https://www.fcc.gov/guides/900-pay-call-and-other-information-services.
- Disclosing your checking account or credit card account number over the phone in response to a sweepstakes promotion — or for any reason other than to buy the product or service being sold — is a sure-fire way to get scammed in the future.
- Your local Better Business Bureau may help you check out a sweepstakes promoter’s reputation. Be aware, however, that many questionable prize promotion companies don’t stay in one place long enough to establish a track record, and the absence of complaints doesn’t necessarily mean the offer is legitimate.
“Congratulations! You may receive a certified check for up to $400,000,000 U.S. CASH!
One Lump sum! Tax free! Your odds to WIN are 1-6.”
“Hundreds of U.S. citizens win every week using our secret system!
You can win as much as you want!”
Scam operators — often based off shore — are using the telephone and direct mail to entice U.S. consumers to buy chances in high-stakes foreign lotteries from as far away as Australia and Europe. These lottery solicitations violate U.S. law, which prohibits the cross-border sale or purchase of lottery tickets by phone or mail.
Still, federal law enforcement authorities are regularly intercepting and destroying millions of foreign lottery mailings sent or delivered by the truckload into the U.S. And consumers, lured by prospects of instant wealth, are responding to the solicitations that do get through — to the tune of $120 million a year, according to the U.S. Postal Inspection Service.
The Federal Trade Commission (FTC), the national consumer protection agency, says most promotions for foreign lotteries are likely to be phony. Many scam operators don’t even buy the promised lottery tickets. Others buy some tickets, but keep the “winnings” for themselves. In addition, lottery hustlers use victims’ bank account numbers to make unauthorized withdrawals or their credit card numbers to run up additional charges.
Words of caution for consumers who are thinking about responding to a foreign lottery:
- If you play a foreign lottery — through the mail or over the telephone — you’re violating federal law.
- There are no secret systems for winning foreign lotteries. Your chances of winning more than the cost of your tickets are slim to none.
- If you purchase one foreign lottery ticket, expect many more bogus offers for lottery or investment “opportunities.” Your name will be placed on “sucker lists” that fraudulent telemarketers buy and sell.
- Keep your credit card and bank account numbers to yourself. Scam artists often ask for them during an unsolicited sales pitch.
The bottom line: Ignore all mail and phone solicitations for foreign lottery promotions. If you receive what looks like lottery material from a foreign country, give it to your local postmaster.
If you believe you’ve responded to a sweepstake or lottery scam, file a complaint with: