Legitimate sweepstakes cannot require a fee payment or purchase of merchandise in order for a person to enter the sweepstakes. Scams are the fourth largest consumer complaint according to the Federal Trade Commission. In 2013, a California scam was stopped which sent out 3.7 million letters and collected over $11 million from victims who were mainly 65 years and older.
Sweepstakes scams that require the victim to pay a small fee of $10, $25, or $35 are fraudulent. The scam letter implies that you have won a prize but must send a ‘processing fee’ to collect the prize money. There is often a disclaimer in small print on the back of the certificate that says the ‘processing fee’ is for the victim to receive a report on the status of the sweepstakes. The fraudsters make their money collecting the fees.
Sweepstakes scams that include a valid looking check to offset taxes are fraudulent. The check is deposited into the victim’s account and the victim writes a larger check to pay for the taxes on the ‘supposed’ winnings. The check from the sweepstakes company bounces and the victim loses the money that was sent to the scammers.
Telephone initiated solicitations often accompany sweepstakes scams and are reported as one of the most profitable methods that fraudsters use to contact victims. The fraudsters typically set up phone rooms, called boiler rooms, where they run sweepstakes scams that ‘guarantee’ you are a winner for a fee. Seniors are favorite targets because they can be more gullible and desperate for attention.
To protect yourself:
- Do not remit any fee payments to participate in a sweepstakes
- Be wary of charities using sweepstakes to gather donations
- Ask a trusted friend to review any offers before you act on them
- Find something constructive to fill the senior’s time.