Some prize offers and sweepstakes that come in the mail are
scams by tricking consumers into thinking the offers are legitimate. They use
attention-getting gimmicks such as fancy certificates, official entry numbers,
or envelopes that look like telegrams. No matter how these are packaged, these
offers will cost you money.
Con artists lure consumers into calling a special telephone
number for more information. After making the call, consumers learn they must
pay claim fees, shipping and handling costs, and/or purchase other merchandise
in order to be eligible.
These companies use high-pressure tactics to convince people
to send money immediately. Some even offer to send a courier to collect
payment. Consumers are talked into giving their credit card numbers and then
are billed hundreds of dollars, or tricked into providing their checking
account or credit card numbers which enables an automatic withdrawal to be made
from their checking account or billed to their credit card.
You can be sure you will not win any prize with a brand
name, cash, or government bond. Prizes such as jewelry and watches are junk,
vacations are actually vacation certificates hardly worth the paper they are
printed on, and shopping sprees amount to coupons that are good only when
Sales people sometimes try to get consumers to purchase
overpriced products or services in order to claim these worthless prizes. Water
filters turn out to be little plastic discs. Vitamins and cosmetics can be purchased
at a local store for much less money. Credit card protection is often sold, but
federal law already protects consumers against unauthorized charges on missing
credit cards. Some telemarketers encourage people to buy pens or other products
with antidrug messages. Local schools and law enforcement can get that material
elsewhere at a greatly reduced cost.
Law on prize offers
Wisconsin law (Wis. Stat. s. 100.171) regulates unsolicited
prize notices given to individuals in Wisconsin. Under the law, solicitors may
not request or accept any payment for prize promotions before they provide a
written prize notice that contains:
The verifiable retail value of each prize.
The odds of receiving each prize.
Any shipping, handling, or other fees that must be paid.
Any requirement to attend a sales presentation.
The name and address of the solicitor and the sponsor.
Any limitation or conditions on receiving the prize.
The law even specifies how these disclosures must be
presented, including their location on the notice and the font type and size.
For instance, the odds and verifiable retail value must be in the immediate
proximity of each listing of the prize(s) and must be in the same size font and
boldness of type as the prize.
If a company violates this law, a lawsuit may be filed
asking for restitution for consumers and civil forfeitures of up to $5,000.
Intentional violations of the statute could result in fines up to $10,000 and
two year imprisonment. The law also includes a private remedy. This means you
could go to court and be eligible for an award of $500 or twice the amount of
your loss, whichever is greater, plus costs and attorney fees.
Even prize promotions that comply with the law may not be
worthwhile. Remember, if you have to pay to win a prize, it is not much of a
prize. Here are some precautions to take:
Do not pay a handling fee or provide a credit card number or
information about your savings or checking account in order to win a prize.
Do not wire a payment or send a check through an express
courier service without checking references and contacting the Bureau of
If you get a notice in the mail – throw it away. If the
offer comes over the telephone – hang up!
Finally, if you do lose money to a fraudulent telemarketer –
COMPLAIN! Most people are embarrassed and do not report it. This allows the
swindler to victimize other people in your community.
If you have lost money to a telemarketer, be cautious of
private companies that may contact you and offer to help you get some of your
money back – for a fee. Government agencies do not charge for that service.
These are known as “recovery room” scams, and a distraught consumer with their
guard down could stand to lose even more money to them.