Consumer Basics

Sweepstakes & Prizes

Sweepstakes and lotteries may be scams in disguise.

How many times have all of us come this close to winning the Publishers Clearing House sweepstakes? Nevermind that the chance of winning is less than one in one billion, and that the company has spent $52 million over the years to settle charges that it misled customers. More than 100,000 consumers complained about sweepstakes and lottery scams in recent years, according to recent report released by the FTC.

How Sweepstakes Scams Work

It all starts with a phone call, e-mail, or letter letting you know that you have won a very large amount of money or some highly-appealing prize (a luxury car or a brand new iPad, for example). You are told that you can claim your prize by simply wiring a comparatively modest – but still very significant – amount of money (often several hundred dollars or more) to a given location in order to cover “processing” or “transaction” fees, maybe even “taxes” associated with the prize. Once the target wires the money, of course, the sweepstakes representative is never heard from again. This is typical, especially in E-mail, telemarketing or internet scam letting you know that you have won some fantastic sum of money (‘you’ve won $26.4 million dollars!’) and indicating that all that’s necessary to collect your cash prize is payment of a fee to ‘cover’ processing-related charges, taxes, and other transaction costs. You have a 100% chance of losing and even worse, participating in foreign lotteries is illegal. scams.

Another scenario involves ads that entice you to “claim your X-Box 360” by simply clicking on a link or making a toll-free phone call. You are then dragged through a host of questions seeking extensive levels of personal credit information, only to finally learn that you will need to apply for a mortgage or series of credit cards before you’re eligible to actually claim your prize.

To make matters worse, people who fall for these kinds of scams can find themselves added to “dupe” lists that are bought and sold by fraudsters on the black market. Ending up on one of these lists means that they will be hit again and again by scam artists in various schemes.

How You Can Protect Yourself

Federal law prohibits companies from requiring consumers to purchase any product, service, or subscription to become eligible to enter into a sweepstakes or drawing. This means that you do not – under any circumstances – have to buy a product or spend money to enter into a sweepstakes of any kind. The Publishers Clearinghouse Sweepstakes and their enormous checks? By law, you are not required to spend a dime on magazine subscriptions to enter.

And if, for any reason, you suspect that the sweepstakes that you are thinking about entering does involve an actual, tangible prize, be sure to review the disclosure materials (which the FTC mandates that these campaigns provide) to determine your actual odds of winning. To say that it’s usually quite a longshot would be an understatement.

Lastly, always remember the following:

  • Wiring money is just like sending cash. Once the money is out the door, it’s gone.
  • Never send money to someone you don’t know.
  • Never participate in a supposed “foreign” lottery (it’s illegal).
  • Do not respond to unsolicited messages – via phone, mail, or e-mail – seeking your personal credit information.
  • Avoid schemes that require you to deposit a check of any form into your account so that you may wire someone some portion of the proceeds.  These checks will prove worthless and leave you responsible for any money wired from your account to a third-party.

More of’s coverage of deceptive sweepstakes and prize advertising can be found here.

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