Sweepstakes Scams – Recovery Schemes

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 Sweepstakes and Lottery Scams

Who wouldn’t like to win thousands, or even millions, or the opportunity to take a lavish vacation? There are numerous reputable sweepstakes and competitions, and the possibility of winning a fantastic reward can be very appealing. Con artists are aware of this and take advantage of your desire for the big payday or dream vacation.

Scams involving sweepstakes and the lottery have been for a while and are still prevalent today. More than 148,000 reports of fraud involving prizes, sweepstakes, and lotteries were filed with the Federal Trade Commission (FTC) in 2021, a 27 percent increase from the previous year. Victims suffered a $255 million loss as a group.

In a sweepstakes scam, the first point of contact is frequently a phone call, email, social media post, or a piece of direct mail congratulating the victim on winning a significant prize. However, there is a catch: to receive your prize, you must pay a fee, taxes, or customs duties. The con artists might ask for the details of your bank account, nag you to pay money via wire transfer, or advise you to buy gift cards and provide card numbers.

Once they have someone in their clutches, they will continue to contact them, keeping in touch for months or even years, promising the big prize is just one more payment away and frequently using their victims as unsuspecting “money mules” to transfer money that has been stolen from others.

According to the U.S. Embassy in Jamaica, the place of origin for many lottery scams, if you stop making payments or break off contact, they might threaten to hurt you or a loved one or report you to the police. (Be wary of any unexpected calls from numbers beginning with the Jamaican country code, 876.)

People over 55 make up 72% of the victims of sweepstakes scams reported to the Better Business Bureau, making them frequent targets (BBB). According to a June 2021 BBB research, 9 out of 10 victims suffered financial losses, with an average cost of $978, more than quadrupling the price for younger victims.

Some people suffer much greater losses. According to the U.S. Department of Justice, two Jamaican men who pleaded guilty to federal fraud charges earlier this year obtained tens of thousands of dollars from numerous individual victims and more than $9.4 million overall while operating sweepstakes scams out of a call center in Costa Rica for eight years.

Additionally, a felon recently received a prison sentence and was ordered to pay back more than $7.7 million that he had stolen from Californians. California Lottery representatives have responded by emphasizing that:

  • The lottery NEVER charges players to redeem their prize or requests any money upfront.
  • Before submitting a formal claim form, a lottery representative will NEVER personally approach you about winning a jackpot.
  • If you don’t participate in a lottery game, there is ZERO CHANCE that you will win a prize.

Danger Signals

You receive a call or an email stating you have won a reward in a sweepstakes you don’t remember entering or have never heard of.

You are informed that a deposit is required to claim the reward.

Someone contacts you on the phone and claims to have a winning state lottery ticket, but they need assistance with the fee to cash it in. According to the North American Association of State and Provincial Lotteries, no money is ever needed to claim a reward once a ticket has been purchased.

How to Avoid Falling Victim to this Con

Examine the mailers for alleged sweepstakes carefully. If your entry form or letter of congratulations was mailed at a bulk rate, many other people also received the same mailing.

When receiving a cold call claiming to be from a popular competition like the Publishers Clearing House (PCH) sweepstakes or the Mega Millions lottery, hang up. They won’t randomly call you to congratulate you on winning.

Check the small print on a contest form to ensure it contains all the legally necessary information, including the contest’s start and end dates, entry requirements, prize descriptions, and other legal disclaimers. Something is funny if that material is missing.

Check the odds of winning with care, and be especially wary of competitions that don’t state them.

Watch your own impatience. According to an FTC survey, people who said they were willing to take more chances were three times more likely to fall for phony prize solicitations than those who said the opposite.

Never spend money to increase your chances of winning or to claim a prize you think you might have won.
Never give any person who contacts you about a lottery jackpot your personal or financial information.

A check for alleged winners that includes instructions to repay a portion to the contest sponsors shouldn’t be deposited. When the check bounces, you’ll probably have to pay back your bank for all withdrawals made from the deposit, including what you sent the con artists.

Don’t call back if you receive a call about a prize from an 876, 809, or 284 area code number. These codes are from nations in the Caribbean (Jamaica, the Dominican Republic, and the British Virgin Islands, respectively), which have grown to be hotspots for phone scams and other forms of contest fraud.

What Exactly Is a Recovery Plan?

After a victim has already lost some money to a telemarketer or postal scam, a recovery strategy is used. A recovery service may contact the victim once they have reached the point where they will no longer fall for the old sweepstakes scam. A telemarketer will phone the victim as part of the recovery service and promise to locate and return the stolen funds in exchange for a nominal “finder’s fee.”

How Are Recovery Services Operated?

Recovery services may function in a number of ways, including:

  • They might say they’ve already located your money and will ensure that it is returned to you in exchange for payment.
  • They might say they are coordinating with federal agencies to get your money back.
  • They might even make the assertion that they work for a government entity that is looking for your money.

Some may claim that they will just provide you with the addresses of the complaint filing offices for a price.

Is There a Catch?

These services are typically completely bogus or, if they are authentic, aren’t worth the money you have to spend on them. Sometimes the telemarketer attempting to con you into paying for the service of recovery is the one who conned you. They’re only attempting to get your money back, and once they have it, they’ll either take off or offer a basic service for an exorbitant price.

For instance, despite the fact that some recovery services may charge a fee to provide addresses of consumer advocacy organizations and governmental entities, you can typically obtain these addresses for free or at a very cheap cost from your local library. There are situations when the company would refund you some money, but you can bet that the amount you paid for the service was far higher than the amount you received.

How Should I Respond If a Scammer Contacts Me?

You can report sweepstakes scams to regional or national consumer protection organizations if you’ve been contacted by one. Additionally, you have the option to complain to the Federal Trade Commission (FTC). Deceptive advertising is regulated by the FTC, which also has the authority to sue the perpetrators.

Additionally, you ought to submit a complaint to the U.S. Postal Inspection Service, which will look into any possible mail fraud if you have received correspondence about a scam. And finally, notifying the Better Business Bureau will let other customers know.

Should I Get in Touch with a Lawyer?

You should speak with a consumer lawyer if one of these services has accepted your money without keeping half of the bargain or acting otherwise than how they initially promised. Your lawyer will be able to help you understand your alternatives and determine whether you have a claim for damages in a lawsuit against the con artist.

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