This is part three of our 10-part series taking a closer look at the top scams of 2012. The number three scam reported to NCL’s Fraud Center in 2012 was fake prizes, sweepstakes, and free gifts scams. To see an overview of our complete report on the top scams of the year, visit our Web site at nclnet.org. This year, the third most common type of scam reported to National Consumers League involved fake prizes, sweepstakes, and prizes.
These scams, which are may be advertised via phone calls, direct mail or email, generally claim that a consumer has won an a sweepstakes or other prize and must pay an upfront fee (such as fake “taxes” or “processing fee.”) The prize never materializes and the consumer lost the money spent on the “fees.” The widely reported “Jamaican Lottery Scam” is one of these types of frauds. However, this scam comes in many other variations, with scammers posing as representatives of well known sweepstakes such as Publishers Clearing House and Reader’s Digest. Consumers should look for the following red flags of possible fraud:
- If you’re asking to pay money in order to collect winnings from a sweepstakes, lottery or other prize offering, it’s a scam
- If you are told that you’ve won a lottery or contest you’ve never entered, it’s a scam
- If you’re asked to wire money in order to collect winnings, it’s a scam
- The “promoter” asks for sensitive personal information such as a credit or debit card number, Social Security Number or bank account number
- The advertisement states that a purchase is necessary to win
- The “promoter” guarantees that you will win if you send funds
Consumers who have responded to an advertisement for one of these fraudulent lotteries or sweepstakes or who have sent money to the scammer should expect that they will be contacted by the scammer and the scammer’s accomplices frequently with additional demands. Scammers engaged in fraudulent sweepstakes schemes have been known to use threats to extract more money from their victims or even impersonate law enforcement (and ask for additional money to set up “stings” against the scammers). Additional information on these scams is available here.