FTC Reveals Current Sweepstakes Scams

FTC Reveals Current Sweepstakes Scams

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Con artists are always at work, coming up with ways to get people to part with their money. Some scams are small, involving the selling of a product that doesn’t live up to its reputation while others involve the pilfering of entire life savings.

The Federal Trade Commission (FTC)

The Federal Trade Commission (FTC) is an independent arm of the United States federal government tasked with providing consumer protection for U.S. citizens. The FTC monitors allegations of fraudulent, deceptive, and unfair business practices in the marketplace, providing information to consumers to help them spot, stop, and avoid them.

One scam that has received a lot of attention lately are sweepstakes prizes designed to lure people to send money in to claim a prize that they supposedly won. The money is a fee to cover service charges and taxes, but no prize is ever delivered.

Old Scam, New Twist

The latest twist on this particular scam is that the thieves are using names of various government agencies and legitimate phone numbers which mask where they’re calling from. In the May 2008 FTC report outlining the scam, the commission says that the callers will identify themselves as being representatives of “the national consumer protection agency” or the bogus National Sweepstakes Bureau, with even the boldest crooks asserting that they represent the FTC itself!

Internet technology allows scammers to make it look as if they are calling from a government phone or from your own area code, both of which can catch unsuspecting people off guard. People who fall for this ruse will wire money via Western Union which ends up in the hands of a scammer who is usually based overseas.

The FTC offers some tips on how consumer can prevent being victimized including:

  • Don’t pay to collect sweepstakes winnings. If you have to pay to collect your winnings, you haven’t won anything. Legitimate sweepstakes don’t require you to pay “insurance,” “taxes” or “shipping and handling charges” to collect your prize.
  • Hold on to your money. Scammers pressure people to wire money through commercial money transfer companies like Western Union because wiring money is the same as sending cash. If you discover you’ve been scammed, the money’s gone, and there’s very little chance of recovery. Likewise, resist any push to send a check or money order by overnight delivery or courier. Con artists recommend these services so they can get to your money before you realize you’ve been cheated.
  • Look-alikes aren’t the real thing. It’s illegal for any promoter to lie about an affiliation with — or an endorsement by — a government agency or any other well-known organization. Disreputable companies sometimes use a variation of an official or nationally recognized name to try to confuse you and give you confidence in their offers. Insurance companies, including Lloyd’s, do not insure delivery of sweepstakes winnings.
  • Phone numbers can deceive. Some con artists use Internet technology to call you. It allows them to disguise their area code: although it may look like they’re calling from Washington, DC or your local area, they could be calling from anywhere in the world.
  • Take control of the calls you receive. If you want to reduce the number of telemarketing calls you receive, place your telephone number on the National Do Not Call Registry. To register online, visit www.donotcall.gov. To register by phone, call 1-888-382-1222 (TTY: 1-866-290-4236) from the phone number you wish to register.
  • File a complaint with the FTC. If your number has been on the National Do Not Call registry for at least 31 days, and a telemarketer calls, file a complaint with the FTC. To file a complaint online, visit www.donotcall.gov. To file a complaint by phone, call 1-888-382-1222 (TTY: 1-866-290-4236). If you receive a call from someone claiming to be a representative of the government trying to arrange for you to collect supposed sweepstakes winnings, file a complaint at ftc.gov. It’s most helpful to enforcement officials if your complaints include the date and time of the call and the name or phone number of the organization that called you. Although scammers may call using a telephone number that disguises their location, law enforcers may be able to track that number to identify the caller.

To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(Source: Federal Trade Commission)

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Categories: Consumer Financing

Comments

  1. Rick NHS
    Rick NHS 8 July, 2008, 14:07

    Great advice, although some of it is a little bit obvious… like, “Don’t pay to collect sweepstakes winnings.” LOL! Still great advice for those susceptible to these scam artists.

    Your post reminds me of an episode of Judge Judy, where the defendant claimed she couldn’t pay the plaintiff because she was waiting to be paid from an overseas investment that she had paid into after receiving an email offering her millions!

  2. Matthew C. Keegan
    Matthew C. Keegan Author 8 July, 2008, 14:18

    Rick, our government thinks we’re a bunch of idiots, hence the advice. Then again, the number of people who are getting pulled in on obvious cons is sad and amazing.

    Judge Judy rocks — some of the people who appear in her court room boggle the mind!

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