Sweepstakes Scams – The “1 Out of 5 Prizes” Scheme

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 What Is the "1 Out of 5 Prizes" Scheme?

In a “1 Out of 5 Prizes” scam, a telemarketer typically calls to let you know that you’ve been chosen to win one or more prizes. The prizes will be listed for you by the telemarketer. A “free” annual subscription to a particular magazine is occasionally the award.

Sometimes, there is a choice of possible prizes, such as a watch, a bracelet, a car, a truck, or a fishing boat. In any instance, the telemarketer will inform you that you must make a financial contribution in order to be eligible to win this prize.

The motivation for the financial contribution will differ:

  • You must purchase a product to enter the contest.
  • The funds are donated to a good cause, and you will get a gift in appreciation for your generosity.
  • Processing costs are required to dispatch the gift to you.

As a result, you must plan for payment via a check, money order, credit card, or even your bank account number.

What’s the Catch, then?

The problem is that you most likely spent a lot of money on something that was not worth your “donation,” which is the catch. Compare the “discount” pricing for the magazine subscription to the cost of buying a regular subscription directly from the magazine.

With all the extra expenses, you will probably discover that you paid more than a subscription purchased directly from the magazine.

Regarding the list of rewards you might be eligible for, the truth is that you will never be able to win the most expensive prizes.

A bracelet or watch that is less expensive will likely be a poor counterfeit that is not nearly as nice as the telemarketer represented it and is not nearly worth the price you paid for it. You might not even get the present you were promised in some circumstances.

This can be especially upsetting for customers who have been duped into revealing their credit card or bank account credentials to these telemarketers because the con artist now has full access to your credit line to make purchases.

Warning Symbols for Contest Scams

A fantastic sweepstakes win would be a dream come true. However, if what you initially believe to be a genuine win notification turns out to be a sweepstakes fraud, your dream could quickly become a nightmare. Therefore, it’s crucial to know scam indicators before responding to prospective wins.

Sweepstakes scams should be avoided at all costs, but it’s crucial to know how to spot them when you have a good cause to believe you may have won.

Scams involving sweepstakes can have serious repercussions. If you’re unlucky, you can lose money, face harassment from con artists, or even be added to a list of potential victims, increasing your likelihood of falling victim to a scam again.

Check out some crucial things to be on the lookout for when you receive a reward announcement to assist you in avoiding all of those problems.

Do you need to pay money to claim your prize according to your notification? If that’s the case, you’re probably dealing with a con. You will never be required to pay a charge to enter a contest or receive a legitimate sweepstakes reward.

Scammers may claim that you must pay for the following before they deliver your prize:

  • Taxes on sweepstakes
  • Handling fees, shipment expenses, or customs fees
  • Service charges
  • Withholding
  • Any additional fees

But you never have to pay in advance to win a genuine prize. Sweepstakes taxes are submitted with your normal tax return to the IRS.

Anyone who asks you to pay taxes on prizes directly to them instead of the IRS is committing fraud, with a few rare exceptions such as port fees for a cruise prize or a small sum for hotel taxes.

Check the email address that issued the notification if you get one if you win. Be cautious if it comes from a free email account, such as Gmail or Yahoo Mail; it could be a red flag of a hoax.

A few extremely small businesses genuinely inform winners using a free email account, but not many. Most legitimate businesses have them now because there are many ways to obtain email addresses relevant to your industry.

Business email accounts are necessary for large businesses. You may be certain that you are dealing with a sweepstakes scam if you receive a win notification purporting to be from a business like Publishers Clearing House or Microsoft. Yet, the email originated from a free account.

Additionally, be cautious of email addresses that resemble those from legitimate businesses but are not the same.

To make it appear as though the email is coming from a trustworthy company, con artists will occasionally fake the email address even when it isn’t. Be on the lookout for scam emails.

You can only win sweepstakes that you have entered. It’s a warning sign if you get a win notification from a contest that you don’t recall entering.

It’s likely that you entered and promptly forgot about it, or you utilized an approach that was simple to miss, such as scanning your membership card from the grocery shop. But take the time to conduct further research before you answer.

Finding the sweepstakes sponsor’s phone number and calling to confirm that you won is another approach to ensure that your prize win is legitimate.

Use a different phone number if it came from your suspicious win notice. Find a reliable number from a different place, such as the company’s website or the phone book.

You can be certain that you’ve won if your win notification includes a check as your prize, right? Wrong. If the check is for more than $600, you are undoubtedly the victim of fraud.

Con artists distribute fake cheques and their false win announcements to lead victims to believe that sweepstakes frauds are real. An example of this is bogus check fraud.

False checks are risky in several ways: Not only do you not receive the money from the check, but it is also illegal to cash a fake check. You risk paying fines and having your bank account closed if you deposit the check. Finally, any money you transfer to the con artists will be lost.

Remember that reputable sweepstakes must send affidavits before awarding rewards worth more than $600.

What Do I Need to Do if I Fall For One Of These Prize Scams?

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.

You should 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 consult a consumer attorney if you believe that misleading advertising or a deliberate scam has deceived you into purchasing something.

Your lawyer can inform you of your alternatives and assist you in choosing the best line of action. You might even be eligible for restitution and punitive penalties in a lawsuit against the individual or business that embezzled your money.

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