Claudia Buck: Sweepstakes scam is one of many consumer frauds out to get you
03/16/2014 12:00 AM
03/17/2014 11:52 AM
When he opened the letter, retiree James Thomas certainly wanted it to be true. In black and white, the congratulatory letter stated that he was one of “five lucky” winners in a Publisher’s Clearing House Sweepstakes Association lottery drawing. His prize: $3,998,000.10.
“It was about a dollar short of $4 million. It sounded so good that I almost fell for it,” said Thomas, 86, a retired federal employee at McClellan. But he didn’t.
There were too many red flags, including the request to keep the prize letter “strictly confidential,” the Canadian return address and the letterhead from Barstow. And then there was the enclosed $4,000 check, to help cover “processing fees.” Those fees, roughly $3,000, were to be payable through a Western Union money transfer.
The Roseville resident says he went online and quickly pulled up scam reports listing the exact same company name as in the letter he received.
Letters like the one that landed in Thomas’ mailbox aren’t anything new; nor do they show any signs of going away.
“We get calls like these every day,” said Dwight Johnson, spokesman for the Northeast California office of the Better Business Bureau, which covers 24 counties from Stockton to the Oregon border. Johnson said consumers have reported phony Publishers Clearing House calls, emails and even Facebook posts.
The phony sweepstakes letters prey on unsuspecting seniors and anyone else eager to believe they’re true.
“They’ve probably got a whole list of older, gullible folks,” said Thomas, who said he fears that others might be taken in and wire money.
According to law enforcement, this type of pitch usually follows a familiar pattern. The consumer is told to deposit the check, keep a portion for themselves, then wire the remainder for taxes, service charges or “processing fees.” Ultimately, the check bounces and the consumer is left responsible for the amount wired, as well as the bounced check amount. And certainly he or she never receives the promised “millions” in sweepstakes prize money.
Any contest “winner” who is asked to wire money or deposit an enclosed check to cover fees, taxes or other expenses, should run, says the BBB. “If you have to pay them first, that’s not winning,” said Johnson. “It’s a scam.”
Similarly, the FBI advises consumers to never send money, but report the fraud attempt to the FBI or, if it comes by mail, to the U.S. Postal Inspectors Service, which is the post office’s law enforcement arm.
“Stay informed and be a skeptic, not a believer,” said Gina Swankie, spokeswoman for the local FBI office in Sacramento, in an email. “We ask (consumers) to simply stop communicating with the individuals and bring us as much information as they can to help investigate the matter,” such as copies of emails and letters.
In Thomas’ case, the letterhead, from the Advance Lottery Finance Company LLC, listed a Barstow address that, on Google maps, appears to show a dusty tract home surrounded by a cyclone fence. The “claim agent” was listed as Peter Chung, with a British Columbia phone number.
On a call to that number, a man identifying himself as Chung refused to answer whether he was connected with Publishers Clearing House or the “Advance Lottery Finance Company.” He repeated several times, “Send me a copy of the letter and I’ll take a look at it,” then hung up.
On its website, the legitimate Publishers Clearing House warns consumers of phony letters that use its name, particularly those that enclose checks like the one that Thomas received. “If you are sent a check, told it’s a partial prize award, and (are) asked to cash it and send a portion back to claim the full prize award, don’t. The check is fake, but the scam is real,” the website says.
Publishers Clearing House says its prize awards are never announced by phone or email, but always arrive “the way you see them” in TV commercials: unannounced and by a team bearing balloons, champagne and flowers.
It may be a cliché, but with any scam, notes the BBB’s Johnson: “If it sounds too good to be true, it is.”
Other common scams
Fake sweepstakes letters are just one of many scams that regularly troll for targets by phone, mail, email, smartphones and social media. Recently, the national BBB office released its Top 10 Scams for 2013:
Affordable Care Act scam: Calling it the “scam of the year,” the BBB said fraudsters used Obamacare health care sign-ups to try to trick consumers into revealing personal information used in identity theft. Claiming to be from health care organizations or the government, scammers tell consumers they need a new health insurance or Medicare card. To receive it, verification must be provided, such as credit card, Social Security or bank account numbers.
Medical alert scam: Targeting seniors and their caretakers, it promises to send a “free medical alert system” that supposedly has been paid for by family members. Seniors are asked to “verify” their identity by providing bank or credit card information, then start getting charged a monthly service fee.
Auction reseller scam: Using eBay and other online auction sites, scammers fool sellers into shipping goods without getting payment upfront. Claiming it’s an emergency, such as a child’s birthday or a solider leaving for overseas, the buyer requests same-day shipping of the items. To further the fraud, the scammer sends a fake email “confirming” a supposed PayPal payment.
Arrest warrant scam: Last fall, fraudsters used fake caller ID to make incoming calls that appear to be from the local sheriff’s office or law enforcement agency. The “officer” claims that an arrest warrant had been issued but a fine can be paid to avoid criminal charges. Naturally, the “fines” can be paid only by wire transfer or put onto a prepaid debit card.
Home repair scams: Often done by unlicensed or untrained workers, the scams typically involve shoddy repairs/improvements to areas that aren’t easily visible: roofs, chimneys, air ducts, crawl spaces, etc. They might solicit business door-to-door, by email, telemarketing or even social media. To check if a home contractor is licensed, or has a complaint history, go to bbb.org or your state contractor licensing board.
Casting call scam: TV show like “American Idol” and “Project Runway” have inspired scammers to pose as talent scouts or agents seeking actors, singers, models, reality show contestants, etc. It can be a way to sell acting lessons, photo services or solicit fees for online applications or upcoming “casting calls.” And everything on the application can be used for identity theft.
Foreign currency scam: Investing in foreign currency, such as the Iraqi dinar, Vietnamese dong or the Egyptian pound, is often touted as a low-risk, high-return money-maker. In some cases, scammers even provide real currency. Tied to current events, investors are promised they’ll cash in when those foreign governments revalue their currency. In actuality, the currency is difficult to sell and is “extremely unlikely” to ever significantly increase in value, the BBB says.
Texting scams: Known as “smishing,” phony texts appearing on your smartphone are an attempt to steal personal financial information, such as PINs or ATM numbers. They often resemble a text alert from your bank, asking you to confirm certain information or “activate a debit card” by clicking on a link.
Do-not-call scams: The legitimate National Do Not Call Registry is a free way to reduce annoying telemarketing calls. But scammers, pretending to be government officials, are calling consumers urging them to verify information, pay a fee to sign up or disclose personal information, including Social Security numbers.
Facebook friend scam: Ever get a “friend” request on Facebook from somebody you already thought was your friend? Be wary of fake profiles that can pluck details about you, recommend “sketchy websites” that download malware, use your account to compile information about your friends, even impersonate a military member or other trusted person to perpetrate a romance scam. To stay safe: Be careful of what you share on social media and keep your privacy settings high.
About This BlogClaudia Buck is the Personal Finance columnist and business editor at The Sacramento Bee. She's worked at The Bee since 2005. Amid the financial turmoil of the recent recession, she became the personal finance writer, helping readers cope with some of the confusing, daunting and perplexing aspects of managing our financial lives. She serves on the journalism advisory board of her alma mater, Cal Poly State University, San Luis Obispo. Reach her at email@example.com or 916-321-1968. Twitter: @Claudia_Buck.
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