Sweepstakes Scam Halted by the FTC

A bogus sweepstakes that duped consumers into paying a “processing fee” to collect “prize money” has been halted by a federal judge at the request of the Federal Trade Commission, the agency reported on Wednesday.

According to FTC allegations, the company sometimes posed as a government agency, and used tricky language and official-looking documents and seals to fool consumers into paying $20 to collect a fake multi-million dollar sweepstakes prize.

According to the FTC’s complaint, the fraudulent enterprise sent consumers notices in the mail that stated, “Your identification as recipient for reported cash award entitlements totalling over $2,500,000.00 has been confirmed! We are so pleased at having the honor of informing you of this wonderful news.”

Some of the mailings claimed they were affiliated with a government agency such as “State of Illinois Commissioners of Regulation” and “OFFICE OF THE PRESIDENT OFFICIAL NOTIFICATION,” along with language, symbols, and artwork such as “In God We Trust” and a bald eagle.

But consumers who sent their fee by the stated deadline did not receive a prize, the FTC alleges. Instead, consumers received literature on how to enter various sweepstakes, full of fine print in tricky language that stated the company was just a reporting service with information on different sweepstakes. They did not make it clear to consumers that no prize has been won.

The case is part of an ongoing FTC crackdown on scams that target financially strapped Americans, and the agency is seeking to make the defendants give up their ill-gotten gains.

Don’t fall for a sweepstakes scam! Here are a few ways to protect yourself from falling victim to a sweepstakes scam, and a few reg flags to watch for:

First of all, a legitimate sweepstakes does not make you pay a “processing fee,” a “collection fee,” or “upfront taxes” to collect your prize.

Also, by law, you are not required to purchase anything to enter a sweepstakes or to qualify for a prize that you may have won. If you are notified that you have won something but are required to pay anything before you can collect, consider it a scam.

In order to win a sweepstakes, you must have been entered into it. But who goes around entering other people’s names into legitimate sweepstakes? Be very skeptical if someone claims you have won a prize if you didn’t enter the sweepstakes.

If you receive a phone call from someone claiming you’ve won a prize, be aware that caller ID is not reliable. Crooks can disguise the number they’re calling from to make it look like they are calling from a legitimate agency or even a government entity. They hope to gain your trust so you let your guard down - so they can convince you to send money to collect your “prize.”

Also remember that anyone with a computer and printer can design and mail official-looking documents with a made-up agency’s name on it. Some even claim to be affiliated with real government agencies or well-known legitimate sweepstakes. Crooks have no problem with lying about who they are to scam consumers out of their money.

If you don't want to believe it’s a scam and have to check into it deeper, call the agency at the phone number listed in a public directory such as the phone book or on the web, rather than the number printed in the sweepstakes notification. If you can't find the agency in a public directory, be very suspicious. And finding them in a public directory is not a fool-proof way to know that it's a legitimate agency, but it's a start.

If you have been a victim of a sweepstakes scam, or have received mailings or phone calls from one that you suspect is a scam, report it to the FTC at www.ftc.gov.


Source:
Federal Trade Commission