Sweepstakes Scams: How to recognize a scam sweepstake or prize game

Sweepstakes, Promotion and Prize Scams - How to Recognize Them

Congratulations!
You're guaranteed to win a fabulous diamond ring, luxury vacation or all-terrain vehicle!

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 $15,000 "prize" may cost you hundreds of dollars in taxes or service charges - and never arrive. Your "fabulous" prize may not be worth collecting; especially if you have to sit through a high-pressure sales pitch for time-share condos. The diamond is likely to be the size of a pinhead. The "vacation" could be one night in a seedy motel, and the ATV, nothing more than a lounge chair on wheels!

There are two general types of sweepstakes scam winning notifications:

  1. the notification comes from a real business organization, but the prizes are a scam or misdirection (usually for MLM, vacation time shares, etc.)
  2. The notification comes a scammer who is unaffiliated with any real organization.  The name of the sweepstakes may be real, but he's just using the name!

An example of the first type is the Reader's Digest Sweepstakes, which faced legal action over exaggerated prize claims. Scam artists also often use the promise of a valuable prize or award to entice consumers to send money, buy overpriced products or services, listen to real estate sale pitches or contribute to bogus charities. People who fall for their ploys may end up paying far more than their "prizes" are worth, IF they get a prize at all. People generally know that they cannot win a lottery if they didn't buy a ticket, (see lottery scams here) but sweepstakes catch more victims because they are like a sponsored lottery: you don't have to buy anything to be able to win in a sweepstakes.

More common are second type of sweepstakes scam; the completely fake prize notifications that come from scammers, usually from Nigeria. Although they never say so in the initial emails, eventually they will tell you you must pay fees or taxes. This page has some examples of these scams.

Remember: You do not have to pay to enter a sweepstakes or collect a prize. If you're asked to pay, the sweepstakes is a scam.


What is a Sweepstakes?

By definition, a sweepstakes is an advertising or promotional device by which items of value (prizes) are awarded to participating consumers by chance, with no purchase or entry fee required to win and NO FEES or taxes to be paid prior to receiving the prize(s).  If any purchase or payment is required to collect winnings, then, by definition, it cannot be a sweepstakes or promotion, but may be a lottery. It is not possible for an event to be both a lottery AND a sweepstakes.


How do the scammers disguise the scams?

Some con artists use the lure of a sweepstakes 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 scam, crooks are getting bolder, using names of government agencies and legitimate phone numbers that mask where they're calling from. Claiming to represent "the national consumer protection agency," the non-existent National Sweepstakes Bureau, and even the Federal Trade Commission (FTC), they say that the delivery of the sweepstakes 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, 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) 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."

Skill Contests

There is a third type of promotion scam: skill contests. These are puzzles, games or other contests in which prizes are awarded based on skill, knowledge or talent - not on chance. Contestants might be required to write a jingle, solve a puzzle or answer questions correctly to win.

Unlike sweepstakes, skill contests may legally require contestants to buy something or make a payment or donation to enter.

Some of these skills contents are legitimate. Having said that, it's important to recognize that many consumers are deceptively lured into playing skill contests by easy initial questions or puzzles. Then, once they've sent their money and become "hooked," the questions get harder and the entry fees get steeper.

Entrants in these contests rarely receive anything for their money and effort.


How to protect yourself

Click here for page 2;  to find out how to protect yourself.


Names of Scam / Fake / Fraud Lottery 

Click here for the huge list of the names of the currently identified lottery scams companies

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