The FTC received 1.8 million consumer complaints in 2011. Scams related to prizes, sweepstakes, and lotteries were third on the list of top complaint categories with more than 100,000 complaints. Identity theft and debt collection were the top two complaint categories.
Falling for a sweepstakes scam can be costly; you might be out of hundreds or thousands of dollars. Thieves may even scam you out of enough personal information to commit bank fraud or identity theft, which are both costly and time-consuming crimes to deal with.
Scammers go through great lengths to make their notifications look legitimate so recognizing them might be difficult. Some have even impersonated the FTC and other government agencies in their scams. Knowing the signs of a scam is critical.
Scams May Ask You to Wire Money
Sweepstakes scams often try to get you to pay some advance fee to collect your prize. They may claim that you’ve won a certain amount of money but you’ll have to pay taxes and fees before they can send you the prize. But why can’t they just deduct the taxes from the prize, if there really is a prize?
These advance fee sweepstakes scams often get you to wire the money because it’s difficult to get your money back after you’ve wired it. Some scammers never send back anything after you’ve paid the fees. Others send something back, but “prize” may be worth even less than the fees you paid.
In another type of scam, scammers send a fake prize check and ask you to wire back the fees and taxes owed. (Would a legitimate company really trust a consumer to send back fees?) Cashing a fake check is a crime and the bank may not realize the check is fake until after you’ve cashed it and after you’ve wired back the required “fees.” Once the bank figures out the check is a fake, they’ll look to you to repay any money you’ve already spent, including money you may have wired to the scammer.
Winning a Contest You Never Entered
Being asked to wire or send money to collect a prize is just one of the signs of a scam. Another sign is that you’ve won something in a contest you never entered. If you know you never enter contests or sweepstakes, chances are notification of a win is just a scam.
But, if you have entered a contest, do some due diligence to see if you’ve won. Use the internet to find the true contact information for the sweepstakes owner and contact them directly to see if you’ve won.
Be on the lookout for lottery-related scams, too. Note that you must have purchased a lottery ticket with the winning numbers to win the lottery. Many major lotteries put the winning lottery numbers online, so you can confirm whether you’ve really won or not. And, playing a foreign lottery is illegal unless you visited that company and purchased a lottery ticket there.
Other signs of a scam: you’re never addressed by name, the notification is from a government agency or bureau (who never offers sweepstakes), or the notification was sent by bulk mail.
Stop Unsolicited Sweepstakes Calls
If a telemarketer calls you about a prize, they’re required to give you certain information about the promotion including your odds of winning, a disclaimer that no fee is required, and the conditions you’ll have to meet to redeem your prize.
To stop telemarketers from calling you, you can register with the National Do Not Call Registry at www.donotcall.gov
or by calling 1-888-382-1222 from the phone you want to register. You’ll have to renew your registration every five years. If somehow a company slips through the cracks, you can ask them to place you on their do not call list. Stop mailings by writing or calling to remove your name from the mailing list.
Report any sweepstakes scams to the FTC by visiting www.ftccomplaintassistant.gov