Prizes and
Sweepstake Scams
Variations of
the Prizes, Sweepstakes and Lotteries scam have been around for years. These
types of scams play on consumers' desire of instant riches. For further
information see the Factsheet on Lottery Scams.
Some
variations are listed below;
Pay to Play
A company may
claim that the consumer has won a prize, however, they require the winner to pay
a fee, or purchase a product in order to win or claim a prize.
Claim the
prize, but must pay taxes now
A company
claims the consumer has won prize winnings, however, they must pay taxes on the
winnings before they can claim the prize. Often, they require wire transfer
payment of taxes, bonding or some other ploy.
Advance
payment of winnings to pay taxes
This is
building on the previous variation. To build trust, the company sends a cheque
for part of the winnings with instructions to deposit it and wire transfer
payment to them for taxes. The normal time for the clearance of the cheque
occurs, and the consumer is able to transfer this amount.
After they
wire transfer the money back to the company, the cheque is returned as
fraudulent. The scam artists had changed the sort code and account number of the
cheque to buy time for the cheque to clear and the money to be transferred.
A consumer
enters a competition, but is it legitimate?
To build trust
and gather personal details, some fraudulent companies will actually sell you
tickets to a competition. There are many companies that sell legitimate
competition tickets in busy places such as shopping centres, but fraudulent
companies are doing the same. In these instances, everyone who entered the
competition will be told they have won.
Some of these
companies use names similar to, or the same as, legitimate companies. They may
also ask for bank account or credit card details to verify the winner's
identity. Details may be used for fraudulent charges, or in an identity theft
scheme.
Prevention
Be cautious
when purchasing competition tickets in busy places such as shopping centres or
when approached on the street. Legitimate companies tell you how the competition
works, the odds of winning and the value and description of all prizes. They
also tell you when the contest ends and how to find out who won.
Be aware if
you are contacted as the winner of a prize. You should know if you have entered
a competition. If you haven't entered the particular competition you are the
winner of, contact the authorities immediately.
Never pass any
money whatsoever back to the company, either before they release a prize, or if
they have paid part of a prize. If you have won then why should you pay them to
receive the prize?
|
