Consumer Comeback Blog

No Money is Free Money: How to Spot a Fake Sweepstakes

FTC, FDA, CDC, SEC – how many Americans are vaguely familiar with the alphabet soup of government agencies, but they aren’t exactly sure what each agency does?

Scammers are counting on consumer confusion about these official-sounding acronyms when they make fraudulent calls and false promises of grand prizes. This time, a scammer tried to pose as the Federal Trade Commission, the very agency that protects consumers from scams, to trick consumers into thinking they had won a lottery or sweepstakes.

Naturally, to redeem this fictitious prize, the consumer has to send a check for the taxes and insurance on the prize ranging between $1,000 and $10,000. It’s a clear rip-off, but people fall for it all the time.

The FTC is warning consumers to be wary of callers who pose as government agencies, specifically those who claim to work for the FTC. This agency is never involved in a sweepstakes contest, and they will never ask consumers for money over the phone.

“The caller might suggest that the FTC is supervising the giveaway. He or she might even use the name of a real FTC employee. Your Caller ID might display the Federal Trade Commission’s name or a Washington, DC area code. Don’t be surprised if you receive repeated calls and follow-up faxes,” the FTC wrote in a press release.

“No matter how convincing the impersonation, never send money to claim a prize. No FTC employee will ever call to ask you to send money. Legitimate sweepstakes companies won’t either. Nevertheless, many consumers and their families have sent money and lost it before realizing and reporting that they were scammed.”

The FTC recommends the following precautions:

  • Don’t pay to collect sweepstakes winnings. Legitimate sweepstakes don’t require you to pay “insurance,” “taxes,” or “shipping and handling charges” to collect your prize.
  • 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 and you have little chance of recovery. Don’t send a check or money order by overnight delivery or courier, either.
  • 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.
  • Phone numbers can deceive. Some con artists call using Internet technology that 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.

Any consumer who receives a suspicious call from that appears to have come from a government agency should file a complaint at ftc.gov or call 1-877-FTC-HELP.

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