The phrase, “You get a prize!” isn’t always good news
Sweepstakes scams are among the most highly reported to the U.S. Federal Trade Commission (FTC). A typical loss is over $900, but you can learn how to spot the signs and avoid becoming a victim.
Legitimate Contest Facts
Real sweepstakes do exist. Here are some things to remember about them.
- You must enter to win. A legitimate sweepstakes would never inform you that you have won a contest you didn’t enter.
- Nothing bad will happen if you don’t participate. Legitimate sweepstakes will never mention negative consequences if you don’t respond to their communication immediately.
- You will never be required to pay. You should never be asked to pay money or provide private financial information to enter a legitimate sweepstakes.
Finally, winning isn’t guaranteed. In fact, you enter a legitimate sweepstakes knowing there is a high chance that you won’t win.
How the Scams Work
In contrast to the practices described above, sweepstakes scams use malicious tactics. For example, they may disguise snail mail to make it look like it’s coming from a trusted source. These mailings may have fancy fonts, seals, and official-looking signatures. But their purpose is to tell you that you have “won” a sweepstakes, in hopes you will follow instructions to fork over payment to claim your “prize.”
Phishing emails use the same tactics and goals. They inform you that you have won big and must provide money, a credit card number, or other financial information to collect the prize. The same strategy can be deployed using phone calls, text messages, or social media.
Telltale Signs
Scammers have come up with sophisticated and effective ways to con you out of your money. But you can outsmart them by learning their tricks. Watch for these telltale signs:
- You never entered the contest. If someone informs you that you have won a contest that you never entered — especially if they also tell you that you need to provide payment or something else of value to collect your prize — it’s almost certainly a scam.
- You are addressed generically. When you enter a legitimate contest, you provide your name and other identifying information. If you receive mail or other communication that addresses you as “Sir” or “Madam,” it’s because the sender doesn’t know anything about you.
- You receive an unexpected check from an unknown source. Some scammers will send you a check from out of the blue, tell you to deposit it, and direct you to send a portion of it to a third party. By the time your bank informs you the check you deposited is bad, you’re already out the sum you sent.
- You are rushed into action. Scammers will push you to claim your “prize” immediately to quickly get their hands on your money or financial information.
Other Scams to Avoid
Sweepstakes scams are just one style of deception that criminals can use to trick you out of your money or financial information. To avoid becoming a victim, learn about others they may deploy. Here are a few to watch out for this year:
Check cooking. In this scam, thieves steal paper checks and, using chemicals, wash away the name of the recipient and the dollar amount. Leaving the valid signature in place, they then fill in a new name and amount.
- To stay safe: Bring checks to be mailed to the post office instead of dropping them in a mailbox and continually monitor your checking account.
Voiceprint scam. Here, the scammers get you on the phone and make a recording of your voice, which they use to impersonate you. For example, they can use it on a call to your financial institution to move funds from your account to theirs.
- To stay safe: Don’t answer phone calls, especially from numbers you don’t recognize. Anyone who knows or does business with you will likely have other ways to reach you.
Paris Olympics scam. Criminals often use current events to play their tricks. One example is a scammer hacking the email account of someone you know to email you with a message saying the person is at the Olympics in Paris, got their wallet stolen, and needs gift cards or cash.
- To stay safe: With urgent requests, resist the impulse to act immediately. Contact the person another way, such as via text message, to verify the story.