Who doesn't want to win something? But before you drop a quick entry or follow instructions to claim a sweepstakes, lottery or prize, here are a few things to know. Plenty of contests are run by reputable marketers and nonprofits, but every day, people lose thousands of dollars to prize scams. Here are some signs you are dealing with a scam.
In a sweepstakes scam, scammers call, mail, text or email consumers to tell them that they have won a prize - anything from a few thousand dollars to a million dollars to a product like a home or car. The scammer then says in order to receive your prize, you must send them money to pay a "processing fee," taxes on your winnings, or for shipping and handling. Once you send them money, the scammer is never heard from again, and you never receive your prize, or you are contacted again for another fee, with scammers sometimes baiting you to reach another, higher level of the prize.
Additionally, any contest of chance is from outside the United States is prohibited by law. Entering these lotteries, either by phone or mail, is illegal. Be aware many sweepstakes organizations make money by selling the names and addresses of contest entrants to marketing firms. Then more companies know how to contact you so they can send you advertisements. This also makes it easier for scammers to purchase your information and send you even more mailings about scam sweepstakes.
BBB has received reports involving victims losing a few hundred to several million dollars. These types of scams can convince people it is real and the perpetrators, often international, are serious.
Scam Tracker, an online tool that allows consumers throughout the United States and Canada to report scams trending in their area, found that more than 6 percent of scams reported in BBB's service area concerned prize notification scams. According to Scam Tracker statistics, consumers have stated that fraudulent lotteries have promised pay outs up to millions of dollars in exchange for a few hundred dollars to cover fees.
Very few contests of chance require payment to enter. There is the lottery - which is run by the government - or gambling, which is highly regulated. In many states, even churches need to file license applications in order to hold bingo tournaments. If a sweepstakes or prize contest requires you pay to receive your winnings or prize, it is probably a scam.
BBB offers the following tips to consumers contacted about lottery, sweepstakes or raffle winnings:
- Remember that many of these notifications are fraudulent.
- Never send any payment to anyone as a requirement for receiving a prize. Any such request is a signal that the prize notification is probably bogus.
- Never send a wire transfer or give the access number to a prepaid money card to anyone you do not know. Wire transfers and prepaid cards are like cash and the money is almost impossible to recover.
- Report suspicious sweepstakes or other prize awards to BBB at bbb.org/scamtracker/stlouis or by calling 888-996-3887.
Consumers may obtain BBB Business Profiles or post Customer Reviews by going to midmobbb.org. Assistance also is available by calling 573-886-8965.
Sean Spence is the Mid-Missouri regional director for Better Business Bureau.