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Prize Lies: How to Spot a Sweepstakes Scam

Hand with marker writing the word Enter to WinTrue, you can’t win if you don’t play. But here’s how you certainly lose by entering a scam sweepstakes or lottery.

You’re instructed to pay a fee or buy something to enter, improve your chances of winning, or claim an already “won” prize. You will not only lose that money (what you purchase may be junk merchandise), but you will also likely face an onslaught of additional requests for supposed taxes, shipping and handling charges, or processing fees — sometimes with the promise of an even larger jackpot. That could continue until you finally realize there’s no prize or you’re bled dry.

• “Winnings” come as a partial-payment check, with instructions to send back a portion. The check that you’re told to deposit (used to pay the required fees) is counterfeit. Although the deposit may immediately show up in your account, it can take up to two weeks for your bank to discover a fake check. If the check proves fake (and it always does), you’ll lose all money drawn from its deposit — including the forwarded amount, likely thousands of dollars for “big” jackpots — and will likely have to repay your bank.

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• You’ll be targeted again. Those who enter sham contests usually wind up on sucker lists that contain victims’ names, contact information and details on their scam-type vulnerabilities. At the least, your data may also be sold to allegedly legitimate advertisers, who will blast you with junk mail, spam or telemarketing calls.
How can you tell legitimate contests from the scams?

1. It’s a scam if you have to pay anything to enter or collect winnings. With the exception of skill contests — where a fee is legally allowed in sweepstakes requiring that you answer questions, submit a recipe, solve a puzzle, etc. — it’s illegal to run a “pay to play” contest. Avoid skill contests that are too easy; their real purpose is to collect entry fees and personal information. Legitimate contests may withhold taxes and other possible fees from your winnings, but only fraudsters require up-front payment.

2. Scammers request that their “pay-to-claim” fees be paid via wire transfers or prepaid debit cards, since they are hard to trace and can be redeemed anywhere. Legitimate contests require no money; other above-board businesses don’t mandate those scammer-preferred payment methods.

3. If you didn’t enter that specific contest, you didn’t win; so don’t believe claims you were “automatically entered” or other lies that come with “you won”
notifications. If you play a legitimate Powerball or state lottery and win, it’s up to you to produce the ticket as proof; lottery officials don’t contact you.

4. If entry forms or congratulations letters are mailed bulk rate, assume it’s a scam. Bulk-rate postages mean oodles of others got the same notice — so figure needle-in-haystack odds for entering, and there’s no prize if you’re told you have already won. Besides the postmark, other red flags include patriotic images (American flags, eagles) and a “Don’t tamper with under federal penalty” notice, to suggest these letters are from the U.S. Postal Service. All are purposely used by scammers to trick government-trusting older recipients, who fall for sweepstakes scams three times as often as younger folks.

Some fraudulent contests go even further, notes the Federal Trade Commission, using official-sounding names such as the nonexistent National Sweepstakes Bureau or claiming the contest is held by (or at least overseen by) a federal agency. Notices from Publishers Clearing House or Reader’s Digest, which run legitimate sweepstakes, can be vetted by contacting the company or its website.

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5. It’s a scam contest if any of the following legally required info is missing in print material: start and end dates; judging date; methods of entry, including judging criteria; type of proof of purchase required; description of prizes and approximate retail values; legal disclaimers; and sponsor’s name and address. Telemarketers are legally required to tell you the odds of winning, the nature or value of the prizes, that entering is free, and the terms and conditions to redeem a prize, according to the FTC. Sweepstakes mailings also reveal that you don’t have to pay to participate and can’t claim that you’re a winner unless you’ve actually won a prize. Never provide personal information such as a driver’s license, passport number or bank account information. Legit contests will request only your name, address or phone number.

Photo: nickylarson974/iStock

For information about other scams, sign up for the Fraud Watch Network. You’ll receive free email alerts with tips and resources to help you spot and avoid identity theft and fraud, and keep tabs of scams and law enforcement alerts in your area at our Scam-Tracking Map.

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