Florida Consumer E-Newsletter
January 2009
Charles H. Bronson
Commissioner
A Message from the Commissioner
Dear Friends:
Phony prize and sweepstakes/lottery promotions have become all too commonplace in recent years. The Federal Trade Commission (FTC) reports that these types of promotions generate the largest number of complaints in their “Consumer Sentinel Network” database than any other type of telemarketing. Telephone, direct mail and e-mail are the most common instruments used to perpetrate this fraud. The target audience tends to be both young and old alike, and although the vast majority of these scams are foreign-based, a good number of them do originate within our own borders.
In this issue of the Florida Consumer E-Newsletter, we have compiled some key information regarding sweepstakes scams. Remember, education is the best defense against fraud and deception. The Florida Department of Agriculture and Consumer Services is here for you - our Consumer Hotline will answer any questions you may have or direct you to the best resource for assistance. If you are calling within Florida simply dial 1-800-HELP-FLA (435-7352), outside of Florida 850-488-2221 or en Español 1-800-FL-AYUDA (352-9832). You can also visit us online at www.800helpfla.com for additional information.
Sincerely,
How Does it Work?
It should first be stated that foreign lottery solicitations violate U.S. law, which prohibits the cross-border sale or purchase of lottery tickets by phone or mail. The perpetrators of this type of fraud contact their target through various ways, informing them that they have won a large cash prize in a lottery or sweepstakes they never entered. The amount that they indicate you have won may range from $250,000 to several million dollars. In many instances, a check (which appears to be drawn on a legitimate U.S. bank) accompanies the initial contact. The amount of the check is usually between $1,000 and $5,000, and a claim is made that this is the first installment of your so-called “grand prize winnings.” Consumers may be instructed to call a phone number to receive directions on how to claim the remainder of their winnings. The bogus operator instructs them to deposit the check in their bank account, then wire transfer an amount of money that is considerably less than that first installment check - the fraudster claims that this is to cover the fees or taxes associated with their “winnings.”
Unfortunately, what most people don’t realize is that sending money in this manner is just like sending cash in an envelope. There is very little way to track it. The victim soon learns that the original “first installment” check was counterfeit and the money that was wired for “fees” or “taxes” will probably never be recovered. In some cases, instead of receiving a counterfeit check, consumers are cold-called by telemarketers who persuade them to send the taxes or fees required to claim their “grand prize winnings.” These consumers also receive nothing in return for their payment, despite sending individual payments that may total thousands of dollars.
A recent variation to this scam notifies the victim via email that they have won $500 in the “Daily Pepsi Draw”. This announcement appears to come from the Promotions/Prize Award Department of the United Kingdom’s Pepsi Bottling Company, making it seem very official. They claim to have put the winnings on an ATM card that you may use anywhere in the world. After calling the ATM Card Service Center contact person and giving him your name, address, phone number, and bank name, you are prompted to simply wire $49.99 which will “procure your approval slip containing the Personal Identification Number (PIN) that activates the ATM card” and the card itself will be mailed to your home address.
Keep from falling for the lure of sweepstakes scams by taking a few precautions:
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Don’t pay to collect sweepstakes winnings. If you have to pay to collect your winnings, you haven’t won anything. Legitimate sweepstakes don’t require you to pay “insurance,” “taxes,” or “shipping and handling charges” to collect your prize.
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Hold on to your money. Scammers pressure people to wire money through commercial money transfer companies like Western Union because wiring money is the same as sending cash. If you discover you’ve been scammed, the money’s gone, and there’s very little chance of recovery. Likewise, resist any push to send a check or money order by overnight delivery or courier. Con artists recommend these services, so they can get your money before you realize you’ve been cheated.
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Look-alikes aren’t the real thing. It’s illegal for any promoter to lie about an affiliation with — or an endorsement by — a government agency or any other well-known organization. Disreputable companies sometimes use a variation of an official or nationally recognized name to try to confuse you and give you confidence in their offers. Insurance companies, including Lloyd’s of London, do not insure delivery of sweepstakes winnings.
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Phone numbers can deceive. Some con artists use Internet technology to call you. It allows them to disguise their area code: although it may look like they’re calling from Washington, DC, or your local area, they could be calling from anywhere in the world.
File a complaint with the Florida Department of Agriculture and Consumer Services as well as the FTC. If you feel that you may have been targeted in a sweepstakes scam, file a complaint at www.800helpfla.com or by calling 1-800-HELP-FLA. You should also file a complaint at ftc.gov or call 1-877-FTC-HELP. Try to include the date and time of the call, the name or phone number of the organization that called you, any names that are mentioned, the prize amount, the amount of money requested, the payment method, and any other details that may be important.
Additional Resources
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The links below are for your information only. The goal of the Division of Consumer Services is to provide additional information to consumers. The Florida Department of Agriculture and Consumer Services does not review or confirm these sites for accuracy.
Federal Trade Commission
The most common cross-border frauds pushed by telemarketers, spam emailers or misleading advertisements involve phony prize promotions, foreign lottery schemes, advance-fee loan rip-offs, travel offer scams, and unnecessary credit card loss “protection.”
FakeChecks.org
They say you won a foreign lottery or sweepstakes, but that's impossible unless you traveled to that country to enter. It is illegal to buy or sell tickets across the U.S. border.
Federal Citizen's Information Center
Foreign lottery promoters continue to target Americans with illegal lotteries by using new ways to avoid legal regulations. The latest scheme con artists are using is to send lottery letters in boxes shipped and labeled as cargo in anticipation of inspection by customs officials.
Florida Attorney General
The Attorney General is urging consumers to beware of a foreign lottery scam that adopts the name of Spain’s largest lottery prize, “El Gordo,” to con consumers out of substantial sums of money. According to the Spanish government, consumers in the United States may receive phony letters, as well as forged materials purporting to be from Spanish banks, that claim that these consumers have been the “lucky winners” of a large cash prize.
