Congratulations, it’s your
lucky day! You’ve just won $5,000!
You’re guaranteed to win a fabulous diamond ring, luxury
vacation or all-terrain vehicle!
If you receive a letter or phone
call with a message like this, be skeptical. The $5,000 "prize" may
cost you hundreds of dollars in taxes or service charges - and never
arrive. Your "fabulous" prize may not be worth collecting. The diamond
is likely to be the size of a pinhead. The "vacation" could be one
night in a seedy motel, and the ATV, nothing more than a lounge chair
on wheels!
Scam artists often use the promise
of a valuable prize or award to entice consumers to send money, buy
overpriced products or services, or contribute to bogus charities.
People who fall for their ploys may end up paying far more than their
"prizes" are worth, if they get a prize at all.
What these people are likely to get
- especially if they signed up for a contest drawing at a public place
or event - may be more than they bargained for: more promotions in the
mail, more telemarketing calls and more unsolicited commercial email,
or "spam." This is because many prize promoters sell the information
they collect to advertisers.
Worse yet, contest entrants might
subject themselves to a bogus prize promotion scam.
And The Winner Is...
Everyone loves to be a winner. A recent
research poll showed that more than half of all American adults
entered sweepstakes within the past year. Most of these contests were
run by reputable marketers and non-profit organizations to promote
their products and services. Some lucky winners received millions of
dollars or valuable prizes.
Capitalizing on the popularity of
these offers, some con artists disguise their schemes to look
legitimate. And an alarming number of people take the bait. Every day,
consumers throughout the United States lose thousands of dollars to
unscrupulous prize promoters. During 1999 alone, the Federal Trade
Commission received more than 10,000 complaints from consumers about
gifts, sweepstakes and prize promotions. Many received telephone calls
or postcards telling them they'd won a big prize - only to find out
that to claim it, they had to buy something or pay as much as $10,000
in fees or other charges.
There's a big difference between
legitimate sweepstakes and fraudulent ones. Prizes in legitimate
contests are awarded solely by chance, and contestants don't have to
pay a fee or buy something to enter or increase their odds of winning.
In fraudulent schemes, however, "winners" almost always have to dip
into their pockets to enter a contest or collect their "prize."
Skill Contests
There's one notable exception: skill
contests. These are puzzles, games or other contests in which prizes
are awarded based on skill, knowledge or talent - not on chance.
Contestants might be required to write a jingle, solve a puzzle or
answer questions correctly to win.
Unlike sweepstakes, skill contests
may legally require contestants to buy something or make a payment or
donation to enter.
It's important to recognize that
many consumers are deceptively lured into playing skill contests by
easy initial questions or puzzles. Once they've sent their money and
become "hooked," the questions get harder and the entry fees get
steeper. Entrants in these contests rarely receive anything for their
money and effort.
Consumer Protections
Several consumer laws help protect
consumers against fraudulent sweepstakes and prize offers promoted
through the mail or by phone.
Telephone Solicitations
Telemarketers frequently use sweepstakes
and prize contests to sell magazines or other goods and services.
These telemarketers make an initial contact with consumers through
"cold calls," or take calls from consumers who are responding to a
solicitation they received by mail.
The Telemarketing Sales Rule helps
protect consumers from fraudulent telemarketers who use prize
promotions as a lure. In every telemarketing call involving a prize
promotion, the law requires telemarketers to tell you:
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the odds of winning a prize. If
the odds can't be determined in advance, the promoter must tell you
the factors used to calculate the odds.
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that you don't have to pay a fee
or buy something to win a prize or participate in the promotion.
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if you ask, how to participate in
the contest without buying or paying anything.
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what you'll have to pay or the
conditions you'll have to meet to receive or redeem a prize.
The Telemarketing Sales Rule
prohibits telemarketers from misrepresenting any of these facts, as
well as the nature or value of the prizes. It also requires
telemarketers who call you to pitch a prize promotion to tell you
before they describe the prize that you don't have to buy or pay
anything to enter or win.
Written Solicitations
Many sweepstakes promotions arrive by mail as a letter or postcard
that instructs the consumer to respond by return mail or phone to
enter a contest or collect a prize.
The Deceptive Mail Prevention and
Enforcement Act helps protect consumers against fraudulent sweepstakes
promotions sent through the mail. The law prohibits:
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claims that you're a winner
unless you've actually won a prize.
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requirements that you buy
something to enter the contest or to receive future sweepstakes
mailings.
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the mailing of fake checks that
don't clearly state that they are non-negotiable and have no cash
value.
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seals, names or terms that imply
an affilia-tion with or endorsement by the federal government.
Skill Contests
Skill contests also are covered by the
new Deceptive Mail Prevention and Enforcement Act. The law requires
the sponsors to disclose in a clear and conspicuous way:
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the terms, rules and conditions
of the contest.
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how many rounds of the contest
you must achieve to win the grand prize.
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the time frame for the winner to
be determined.
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the name of the contest's
sponsor.
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an address where you can reach
the sponsor to request that your name be removed from the mailing
list.
Just Say "No"
Another way to protect yourself is to request that your name be
removed from mail and telephone solicitation lists.
The Telemarketing Sales Rule
requires telemarketers to keep a "do not call" list of consumers who
have asked not to be called again. Calling a consumer who has made
this request is illegal and can subject the telemarketer to a hefty
fine.
The Deceptive Mail Prevention and
Enforcement Act requires companies that use direct mail to maintain a
similar "do not mail" list for consumers who call or write and ask
that their name be removed from the mailing list.
This new law gives caregivers the
right to have the names of the friends and loved ones under their care
removed from the mailing lists of undesirable solicitors.
Another way to reduce mail and
telephone solicitations is to contact the Direct Marketing Association
to request that your name be placed on its "do not call," "do not
mail" and "do not email" lists. Association members agree not to
solicit consumers who have requested that they not be contacted.
To have your name removed from
direct mail marketing lists, write: Direct Marketing Association,
Preference Service Manager, 1120 Avenue of the Americas, New York, New
York 10036-6700. To have your name removed from telemarketing lists,
write: Direct Marketing Association, Preference Service Manager, 1120
Avenue of the Americas, New York, New York 10036-6700. To "opt out" of
receiving unsolicited commercial email, use the DMA's form at
www.e-mps.org.
To File a Complaint
The FTC works for the consumer to
prevent fraudulent, deceptive and unfair business practices in the
marketplace and to provide information to help consumers spot, stop and
avoid them. To file a
complaint or to get free information
on consumer issues, visit
www.ftc.gov or
call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The
FTC enters Internet, telemarketing, identity theft and other fraud-related
complaints into
Consumer Sentinel, a
secure, online database available to hundreds of civil and criminal law
enforcement agencies in the U.S. and abroad.
|
FEDERAL TRADE COMMISSION |
FOR THE CONSUMER |
1-877-FTC-HELP |
www.ftc.gov |
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Consumers who believe they have been victimized by
fraudulent promotional offers also should contact their local
postmaster or the U.S. Postal Inspection Service by phone, toll-free,
at: 1-888-877-7644; by email at:
www.uspsoig.gov; or by mail at: U.S. Postal Inspection Service,
Office of Inspector General, Operations Support Group, 222 S.
Riverside Plaza, Suite 1250, Chicago, IL 60606-6100.
If you have a problem with a
sweepstakes or prize promotion after participating, and you are unable
to resolve the problem directly with the company, contact:
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The Direct Marketing Association,
ConsumerLine, 1111 19th Street, NW, Suite 1100, Washington, DC
20036-3603; phone 202-955-5030; fax 202-955-0085.
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The Better Business Bureau where
the company is located.
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Call for Action, a network of
radio and television station hotlines that offer resolution services
for consumers. Call 301-657-7490 or write: Call for Action, 5272
River Road, Suite 300, Bethesda, MD 20816.
A Dozen Ways to Protect Yourself
The next time you get a "personal"
letter or telephone call telling you "it’s your lucky day," the
Federal Trade Commission encourages you to remember that:
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Legitimate sweepstakes don’t
require you to pay or buy something to enter or improve your chances
of winning, or to pay "taxes" or "shipping and handling charges" to
get your prize. If you have to pay to receive your "prize," it’s not
a prize at all.
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Sponsors of legitimate contests
identify themselves prominently; fraudulent promoters are more
likely to downplay their identities. Legitimate promoters also
provide you with an address or toll-free phone numbers so you can
ask that your name be removed from their mailing list.
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Bona fide offers clearly disclose
the terms and conditions of the promotion in plain English,
including rules, entry procedures, and usually, the odds of winning.
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It’s highly unlikely that you’ve
won a "big" prize if your notification was mailed by bulk rate.
Check the postmark on the envelope or postcard. Also be suspicious
of telemarketers who say you’ve won a contest you can’t remember
entering.
-
Fraudulent promoters might
instruct you to send a check or money order by overnight delivery or
courier to enter a contest or claim your "prize." This is a favorite
ploy for con artists because it lets them take your money fast,
before you realize you’ve been cheated.
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Disreputable companies sometimes
use a variation of an official or nationally recognized name to give
you confidence in their offers. Don’t be deceived by these
"look-alikes." It’s illegal for a promoter to misrepresent an
affiliation with – or an endorsement by – a government agency or
other well-known organization.
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It’s important to read any
written solicitation you receive carefully. Pay particularly close
attention to the fine print. Remember the old adage that "the devil
is in the details."
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Agreeing to attend a sales
meeting just to win an "expensive" prize is likely to subject you to
a high-pressure sales pitch.
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Signing up for a sweepstakes at a
public location or event, through a publication or online might
subject you to unscrupulous prize promotion tactics. You also might
run the risk of having your personal information sold or shared with
other marketers who later deluge you with offers and advertising.
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Some contest promoters use a
toll-free "800" number that directs you to dial a pay-per-call "900"
number. Charges for calls to "900" numbers may be very high.
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Disclosing your checking account
or credit card account number over the phone in response to a
sweepstakes promotion – or for any reason other than to buy the
product or service being sold – is a sure-fire way to get scammed in
the future.
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Your local Better Business Bureau
and your state or local consumer protection office can help you
check out a sweepstakes promoter’s reputation. Be aware, however,
that many questionable prize promotion companies don’t stay in one
place long enough to establish a track record, and the absence of
complaints doesn’t necessarily mean the offer is legitimate.