Fighting Fraud
By Better Business Bureau Serving Greater Cleveland
Sweepstakes scams continue to target older adults by email, phone and postal mail. They claim that you or a member of your family has won a large prize. In order to claim the winnings, however, you must first pay for taxes, shipping costs or other fees by wire transfer, prepaid debit card, gift card or other methods.
In another version of this scheme, an official-looking letter arrives in the mail notifying the recipient they’re the winner of a jackpot, often from a foreign lottery (it is illegal in the U.S. to enter a foreign lottery by phone or mail). The letter includes a seal or other insignia to make it look authentic. In some cases, a check is included to cover the taxes on the winnings. The instructions then specify to deposit the check into a personal bank account and wire or use a prepaid debit card to send the “taxes” to a third party. However, the check is fake and will bounce, causing the account holder to pay overdraft fees in addition to the amount of the check.
According to BBB Scam Tracker, a Cuyahoga County resident lost nearly $8,000 to representatives falsely identifying themselves as Publishers Clearing House. They received a check in the mail for $9,154.38 and were told to deposit it at the bank. Once deposited, the scammers instructed the consumer to write a check for $7,800 to pay for the sweepstakes customs fee, put it between the pages of a magazine, and send it via FedEx to a Cross Bank. Unfortunately, the original check bounced and caused the account to be overdrafted. Once the check was sent, the scammer ended their communications with the consumer.
BBB has the following tips to help you avoid being victim to a sweepstakes scam:
- You’ve got to play to win. If you receive a notification that you have won a prize in a contest you do not remember entering, consider it a red flag. Keep track of all sweepstakes entries so it’s easy to check if a legitimate contest-related company is confirming winnings. When entering, read the fine print and rules for how prizes are claimed.
- Don’t pay up-front fees to claim a prize. It is illegal for a sweepstakes to require you to pay a fee or buy something to enter or improve the chances of winning — that includes paying “taxes,” “shipping and handling charges,” or “processing fees” to receive your winnings.
- Checks will bounce after the bank allows the account holder to withdraw cash from the deposit. Check processing is a confusing business, as is the terminology. Even if a bank representative tells you that a check has “cleared” you can’t be sure it won’t be detected as a fake weeks later. One thing you can be sure of is that you will be on the hook for any funds drawn against the amount.
- Be suspicious of irregular communication. Real sweepstakes will not notify you via text or bulk mail. They will not send a check in the mail without first confirming with you. And you won’t be notified that you are a winner and have to respond or act within 24 hours to collect your prize.
If you have spotted a scam (whether or not you’ve lost money), report it to BBB Scam Tracker. Additional Questions? Reach out to your BBB at 216-241-7678 or [email protected]. For more news and tips visit BBB.org.
Image courtesy pexels.com
