She thought her dreams had come true when she was told she’d won $1 million in the Publishers Clearing House sweepstakes. In fact, the 72-year-old Pennsylvanian was swindled out of nearly $17,000.
Her first mistake: Believing she had won a sweepstakes she never entered. Her second: Calling, as instructed, the “claims agent” listed in the congratulatory letter she received in September. He told her she needed to deposit the check she’d received into her account and then wire back a portion of the amount to pay for expenses related to awarding the jackpot. After she sent the first wire, the agent persuaded her to wire three more payments—until she finally contacted police.
This type of scam is common. “Winners” of contests, lotteries or sweepstakes receive a “teaser” check, and they’re told that once they send the fees for insurance, processing fees or other expenses, they’ll get the balance of the jackpot.
The teaser check inevitably proves to be counterfeit, but it can take up to two weeks for a bank to discover that. The “winner” is nonetheless responsible for any money wired, and could even face fraud charges for depositing a fake check. And of course there is no jackpot.
It’s a classic scam, and the fact that it falsely uses the Publishers Clearing House name makes it all the more convincing: The company, based in Port Washington, N.Y., has instant name recognition for surprising people with sweepstakes winnings and has awarded more than $200 million in cash and prizes since 1967.
Here are some clues for spotting sweepstakes scams, which tend to target older people:
• You never pay to win. Publishers Clearing House or any other company holding a legitimate sweepstakes never requires any payment from its true winners. “If someone contacts you about winning a prize and requests that you send money back in return for any reason—STOP—you have not heard from the real Publishers Clearing House,” warns Chris Irving, the company’s assistant vice president for legal and consumer affairs. In authentic lotteries or sweepstakes, there are no fees of any kind that winners must pay.
• Check the amount. The checks mailed in this kind of scam may look authentic—complete with the real corporate logo and names of bona fide banks—but notice the amount. Typically, they are for less than $5,000 even though the prize may be 10 times that amount or more. The reason:
Scammers know that, unlike checks for higher amounts, those for less than $5,000 are not subject to bank deposit holds. The crooks depend on victims making wire transfers immediately after they deposit their checks. So while you should be suspicious of any check awarded as a prize—especially for a contest you didn’t enter—be even more wary of those with amounts just shy of five grand, such as $4,985.
• The bogus claims agent. The congratulatory letters that come with these fake checks instruct you to contact a claims agent. Don’t. These smooth talkers are the key to making these scams successful. On the phone, they can persuade many people to wire them money for prize fees (usually sent to Canada). Once you make a wire transfer, you can expect a barrage of calls and letters asking for more money. Excuses range from new, “unexpected” fees to the promise of a higher jackpot. Just realize they are phony—a ruse to bleed you dry. What’s more, you could be put on a sucker’s list, and your name and contact information would be sold to other scammers.
• Did you even enter? There is no way you can win a sweepstakes, lottery or contest you don’t enter. And even if you did, legitimate awards from U.S. companies are not issued from Canada, Jamaica or any other foreign country.
Your best bet: Call the real company—looking up the phone number yourself—to check the legitimacy of any sweepstakes claims. Many companies, including Publishers Clearing House, operate telephone fraud lines or run warnings on their websites to help you separate fact from fleecing.
If you receive any e-mails stating you have won a sweepstakes, lottery or prize, forward it to the FBI’s Internet Crime Complaint Center. Snail mail letters should be reported to the U.S. Postal Inspection Service; find your local office here.
Sid Kirchheimer is the author of Scam-Proof Your Life (AARP Books/Sterling).