Beware the Phony Contest and Prize Scams
Do you think you’re a winner? Instead you’ll be a loser if you fall for these scams.
These phony prize scams take various forms. You can be invited to enter a contest; you can be advised you won a contest, sweepstakes, or lottery. You just have to send some money to claim your prize or provide identifying information to prove who you are, or both. Whatever form the scam takes, you could lose money, personal identifying information, or both.
Such scams have become a major problem, in that the Federal Trade Commission reported that nearly $170 million was stolen, and consumers lost an average of $1000 each, rather than winning cash or prizes, according to an August 21, 2021 ABC 7 On Your Side article “How to Avoid Falling for the Newest Sweepstakes Scams” by Nina Pineda. Worse, the problem is growing, since the Better Business Bureau reports that losses from these sweepstakes fraud is on a three-year high — up 35% during this time, and the most hard-hit victims are people over 55.
In a typical scam, the fraudster makes the initial contact by email, phone call, social media post, and sometimes direct mail, congratulating you for winning a big contest. But the catch is that to get your prize you have to pay a fee, taxes, or custom duties to obtain your winnings. Or sometimes you may be paid by a phony check that can take a few weeks to be discovered by your bank, after you pay the requested fees to the scammer. Even worse, the scammer may make off with your personal identity information and use that to wreak more havoc in your life by impersonating you to use your credit, access your computer, and launch other scams in your name.
An example of the persuasiveness of these scammers and the damage they can do is what happened to Alice. She found a cheerful email telling her that she had just won the Irish sweepstakes and she would be receiving a $10,000 prize. But Alice didn’t remember entering the sweepstakes, and when she checked her files, she saw nothing about her entry. When she asked the man who sent the email about this, he had a ready explanation in his email and later in a phone call to answer more questions. Apparently, a friend she hadn’t been in touch with for a while had submitted an entry for her as a surprise gift or she was a member of an organization which entered the sweepstakes. So the sales rep was good, oh, so good, in reassuring her that the company sponsoring the sweepstakes really did get an entry for her and she won. And now they hoped to feature her in their publicity about winners, which would go to her local weekly paper and national media, too, and she would gain community support by being a featured winner.
Finally, convinced by the contest reps persistence, enthusiasm, and stress on how the win would bring great things to her, Alice agreed to send $500 via Western Union to cover the taxes, custom documents, and express mailing costs to send her the check for her winnings. In addition, she agreed to fill out the forms with her personal information, bank account, and routing number to receive the check.
A couple of weeks later she did receive a $10,000 check drawn on the Irish Allied Bank, which looked quite real. Her bank even accepted it, and Alice excitedly went out to purchase some new items for her wardrobe for about $2000, thinking she had all this additional money in her account. But about four weeks later, she learned that her bank account was overdrawn because the check was phony. Though there is an Allied Irish Bank, there is no Irish Allied Bank, and her bank’s back office recognize the fraud. As a result, Alice not only didn’t receive the $10,000, but she lost the $500 she sent via Western Union, plus the $350 overdrafts charges on 10 purchases she made, because she didn’t have those funds in her bank. And later she began to get emails with phony offers and had to change her credit card numbers, because the scammers were using her personal information to make purchases in her name.
Thus, there can be all kinds of consequences if you enter a phony contest or seek to claim a phony prize in such a contest.
How the Contest Scam Works
Here’s how these contests work and how to avoid these scams.
The basic structure of the contest is very simple. The ruse is that you have won a prize in a contest, such as a lottery, sweepstakes, or competition. I you respond, the scammer will give you information on how to claim your prize, which typically involves your sending money like cash through a service like Western Union or a wire, so you can’t get it back. Additionally, the scammer will commonly ask you for personal identity information, and may often send a phony check. The upshot is you lose money, may be subjected to personal identity theft, and by the time you discover it’s a scam, the scammer is long gone — and often has created another scam under another name to defraud still other victims.
How to Avoid Being Scammed
Here are some typical signs of a contest scam, so you know to avoid being scammed, drawn from a number of articles about scams, including from the Federal Trade Commission, Attorney General for the District of Columbia, the BrandpointHub, Justia.com, Netsafe, and LiveAbout.com.
· If you didn’t sign up or buy a ticket for a sweepstake or lottery, you can’t win, so if you are offered a prize, it’s a scam, Certainly, there are legitimate sweepstakes and contests you can enter, but they should be from legitimate companies which you have heard of or which have obtained good ratings from organizations committed to consumer protection, such as the Federal Trade Commission or Better Business Bureau. If you do enter a competition, keep a record of your entries, so you can later check that you really entered a contest if you supposedly won an award.
· If you are asked to pay any money to obtain your prize, that’s a sign of a scam, since a legitimate contest, sweepstake, or lottery won’t ask you to pay to get a prize, such as asking for a payment for sweepstake taxes, customs fees, handling charges, shipping fees, or service fees. This scam request for money is different from the money requested in contests in certain industries, where there is an entry fee to participate in the competition, such as entering a book in a writing competition or entering a film or screenplay in a film festival. In that case, as long as a reputable company is sponsoring the competition, that’s fine, though sometimes scammers will pose as a legitimate company to get entry fees but award nothing. So if the contest is unfamiliar or something about the pitch to enter seems off, check out that the real company is really behind the competition or it’s a scam.
· If you are asked to provide personal information beyond your name and email address, it is likely a scammer fishing for that information. For example, if the company asks for bank account, Social Security number, or other sensitive information, that’s the sign of a scam.
· If you get a check in the mail, it could be fake. It could look like a real check and be made out to be payable to you, but still be fake. And if you suddenly receive a large unexpected check, that is often part of a scam to get you to send back some of the money. Sometimes just showing a suspect check to your banker can be a way to tell if it is real or not, since the banker can detect discrepancies, such as if it’s a check on a non-existent or recently sold bank. But often the check looks so good that it can fool a banker, and it will take about three to four weeks before the fraud is discovered by the bank’s back-office department that verifies these checks. Thus, if you do deposit a check, don’t withdraw or send any funds from the amount you deposited until the check officially clears so you know it’s good.
· If you are invited to participate in a contest, survey, lottery, or prize giveaway on the social media, that can sometimes be a scam. A common strategy is asking people to share information about themselves, such a birth date, location where they live, or parent’s name, which scammers can later combine to create a profile of you they can use for a personal identity theft. Another strategy is asking people to “like” or endorse a product or service, and then they will receive money or a prize gift in return, which can open the door to the scammers getting personal information or later inviting you to participate in a phony contest scam.
· If the notice of a contest award claims to be from a government agency, it is a scam. That’s because a government agency, such as the Federal Trade Commission, doesn’t handle sweepstakes.
· If you are invited to pay to enter, improve your chances of winning, or obtain your prize, that’s a scam. Legitimate companies don’t ask you to pay anything. Some examples are the Monopoly sweepstakes offered from time to time in your supermarket or an award you can use for shopping to get you to go to a local retailer.
· If a foreign company contacts you about winning their lottery, that’s a scam. Even if you were invited to put in your name and email address to participate or are not asked to pay anything, that doesn’t matter, because it is illegal to participate in foreign lotteries, so you should not give any private information to any person who claims you won.
Still some other cautions provided by the Federal Trade Commission in their article “Fake Prize, Sweepstakes, and Lottery Scams” are these:
· Scammers might use the names of well-known companies, and some of these companies may conduct real sweepstakes. But the real companies won’t ask you for money to claim your prize, and you may find some discrepancies in the scam emails to you, such as an extra letter in the company’s name, such as in an email from “publisherweekly” instead of “publishersweekly.” If in doubt, contact the real company directly to see if they are really running this contest. And when you call, don’t use any link or number from the person contacting you, since this can go to a phony website or number.
· Scammers pressure you to act quickly to get your prize. They do so to get money from you before you have a chance to think about and question their legitimacy. Then, too, they can get the money or information quickly and run.
· Scammers want to make it seem like you are the only person who won the contest, but they have sent the same email, text, or letter to many other people. You can often tell if an email is from a scammer if it was sent as a blind copy to you or if you are addressed by a general term, such as “Dear Winner” or “Congratulations. You Won!” However, it is possible to use software that personalizes a mailing, so it addresses you directly. Thus. a personal salutation is not necessarily a sign of a legitimate win, since there can be other signs that this is a scam. So anytime you get an unexpected email about winning a contest, be wary and check for signs of a scam.
In sum, it you suspect a scam, you can always do some research to check it out, or as the Attorney General for the District of Columbia advises, the three keys to protect yourself from being scammed are: “Do Not Respond…Do Not Send Any Money…Do Not Give Out Personal Information.”
And if you do become a victim, you can file a complaint with the attorney general for your state, with the Federal Trade Commission (www.ftc.gov), or with the United States Postal Service (https://www.uspis.cov/report) if the original solicitation or phony check to you came through the mails.
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The author is internationally published author and film producer, Gini Graham Scott, PhD, who has published over 200 books, 50 for traditional publishers and 150 for her own company Changemakers Publishing, specializing in books on self-help, popular business, and social issues. She is the author of The Big Con: Scams Targeting Writers, the Victims, and How to Avoid Becoming a Victim and I Was Scammed about all types of scams and how to avoid them. She has written and executive produced 18 feature films and documentaries, featured on the www.changemakersproductionsfilms.com website. An inspiration for this article is that Changemakers Productions is now raising money for its first horror film Dark Cabin, which features 6 friends on a vacation up against Viking ghosts. It’s filming in the New York area in February 2022, and other horror films are planned. She also writes books and scripts for clients. Her website for writing is at www.changemakerspublishingandwriting.com.
For more information or to set up an interview, contact:
Executive Assistant to Gini Graham Scott
Changemakers Publishing and Writing
Lafayette, CA 94549 . (925) 385–0608