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Prizes, Sweepstakes, and Lotteries

Free Prizes . . . Often Not Worth the Cost!
If you receive a letter, card, or phone call announcing that you are the winner of a "free" prize, beware!  Many of the free prizes end up costing you far more than the prize is worth.  The following are tips to help you avoid "free prize" scams:
  • If it sounds too good to be true, it probably is.  A great sounding deal offered on products that you have little use for, regardless of the price or any associated prize, is probably not a wise purchase.  For example, if you are not already in the habit of taking vitamins, purchasing a year’s supply just to qualify for a trip to an exotic sounding location may not be the best thing to do.
  • Look out for strings attached to the offer.  "Free" should mean exactly that.  If the offer requires you to purchase another item or imposes other obligations, it is not free.  Often scam artists will tell you that you have to pay a shipping or handling fee or some type of "membership fee" in order to receive your reward.
  • Never give out your credit card number.  Often a free prize offer requires you to disclose your credit card number to "validate" the offer.  This is likely a scam.
  • Don’t call "900" numbers.  You may be instructed to call a "900" number for more information or for "verification."  These numbers often charge exorbitant toll rates.  The prize offer is likely a ploy to get you to call the "900" number.
  • Read all the fine print of any prize notification.  You may be asked to invest money with the offer of winning a "big prize."  If you read closely, you will likely find that your chances of winning the prize are small.
  • Know your rights.  Federal and state laws require that if an offer for a free gift requires you to listen to a sales presentation of some type prior to receiving the gift, then that requirement must be made clear when the prize offer is made.  Often these sales pitches are high-pressure and very intense.  The prize might not be worth the time or effort required.

Lottery or Nigerian Scam
This scam is usually run out of a foreign country such as Nigeria.  Typically, the scam artist will notify you that you have won a lottery or other winnings, but that a portion of your winnings must be used to pay for taxes, transport fees, customs fees or other fees.  To help you with the costs, the scammer sends you a check in an amount to cover these costs.  The check is represented as an advance payment from your winnings.  You are instructed to deposit the check into your bank account, wait for it to clear your bank, and then wire transfer a portion of the amount deposited back to the sender to cover some of the initial fees.  Once the payment is wire transferred, you don’t hear back from your contact.  You learn later that the check was forged and that the check that you thought had cleared your account now has to be paid back.  Because the scam artist is located outside of the state and often outside of the United States, there is little likelihood that you will get your money back.

For additional information, visit the Federal Trade Commission at http://www.ftc.gov/bcp/menus/consumer/phone/prizes.shtm
For scams originating from Canada, visit:  www.phonebusters.com.


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