Promotion Prize Scams - How to Recognize Them
Prize Offers: You Don’t Have to Pay to Play!
Sound great? It's a fraud. If you receive a letter or phone call with a message like this, be very skeptical. The prize is a scam. Their game is to get you to reply and give them personal identification information which they can use for identity theft, and then to con you into paying "fees", "courier charges" or "taxes" to receive your "winnings".
How do the scammers disguise the scams?
Some con artists use the lure of a free promotion to convince consumers to send in money to claim a “prize” they’ve supposedly won. They tell consumers that the only thing that separates them from their “winnings” is a fee to cover the taxes or service charges. But as all too many consumers know, the winnings as described never materialize.
In a new spin on the age-old sweepstakes and lotteries scams, crooks claiming sponsored "promotions" winnings are getting bolder, using names of companies and legitimate phone numbers that mask where they’re calling from. Claiming to represent “Microsoft” the non-existent National Sweepstakes Bureau, and others, they say that the delivery of the promotional prize is being supervised by the supposed government agency. And they’re using Internet technology to make it appear that they’re calling from Washington, DC, the nation’s capital, a legitimate lottery headquarters overseas or the consumer’s own area code.
These scammers then convince consumers to wire money to a foreign country — they usually suggest using a commercial money transfer company like Western Union or Money Gram to wire the money — to an agent of “Lloyd’s of London” or some other well-known insurance company to “insure” delivery of the “prize.” In fact, no insurance company is involved; con artists take the money and disappear.
And the (fake) Prize Winner Is...
Everyone loves to be a winner. A recent research poll showed that more than 50% of all American adults entered sweepstakes within the past year. Most of these contests were run by reputable marketers and non-profit organizations to promote their products and services. A few lucky winners even received millions of dollars or valuable prizes.
Capitalizing on the popularity of these offers, some 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. During 1999 alone, the Federal Trade Commission received more than 10,000 complaints from consumers about gifts, sweepstakes and prize promotions. Many 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 never 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."
How to protect yourself
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