By Guest Blogger, Donna DeClemente, Donna's Promo Talk
If it sounds too good to be true, then in most cases it's not true. No, you did not win $450,000 and a new Mercedes. We get dozens of calls each week from people who have received a phone call telling them that they have won a huge cash prize. Most of the time these people are senior citizens, on average 70+ years, and they will either call us or have someone from their family call. We inform that that, unfortunately, they did not win anything, it's a scam.
I recently read this blog post, "Top 10 Scams and Schemes Targeting Seniors Online", and one of the scams they write about is Lottery/ Sweepstakes scams. So I thought it was time that I wrote about them here as well. Many people think they have been contacted by us, the American Sweepstakes Company, and they search online and see the name American Sweepstakes and click on that link to get to our website and phone number. Even though we have a scam alert on our home page, people still call us.
These sweepstakes scams usually require that the winner must pay a fee or insurance of some type to receive their prize. We inform these people that any legitimate sweepstakes will never ask you to pay anything to receive a prize. No one should ever have to pay even one cent, no handling charges, service fees, or any other kind of charges up front. If so, then those are sure signs of a sweepstakes scam.
Some the stories we have heard from people that have called us are heartbreaking. They have sent thousands of dollars over a period of time and they're now looking for their cash prize, which of course hasn't materialized and they want some answers. All we can tell them is that most of the time these scammers are out of the country, so therefore hard to track. We then advise people to file a complaint with the FTC online at www.ftc.gov or by calling 877-FTC-HELP (877-382-4357).
This makes it hard for us do our real job when we inform actual winners that they have won a prize. I don't blame people for being suspicious because the world is full of scams, both online and over the phone. Many will say "I have never won anything!" and we say, "Well, someone has to win".
We then ask them if they remember entering the sweepstakes and in most cases they do, some however are still not sure since they many enter so many. Other times we have sweepstakes that automatically enter people such as in reward programs, or when people use a specific type of credit or store card or by signing up for a newsletter. This makes it a little more difficult to assure the winner that this is legit.
We will send winners a copy of the Official Rules that we drafted and which include the name of our company as either the Sweepstakes or the Contest Administrator. The sponsor of the promotion hires us to perform these administrative services on their behalf which include notifying winners and verifying their eligibility. To do this we ask the winners to send us some form of identification that shows their date of birth and state or province of residence. This need to be done to assure that they meet the eligibility requirements as outlined in the official rules. Most of the time they need to be 18 or older, however in a few states to be a legal citizen you must be 19 or even 21.
Prizes are also subject to federal taxes. The government requires that any sweepstakes or contest winner that receives a prize worth $600 or more in value must report that as income. Therefore we have to send the prize winner a 1099 form the following January to include when they file their yearly income taxes. To do this we have to collect their social security number which we ask them to include on a Affidavit of Liability and Publicity Release form that they must fill out and sign in order to receive their prize.
This is also why when we first notify winners we say that they are the "potential winner" because they have to first accept the prize by complying with these conditions in order to be the official winner. In some rare cases winners may not accept the prize because they don't want to pay the taxes or in the case of trip prizes, it may require additional expenses not included in the prize package.
So I do disagree somewhat with the advice this blog post on the Top 10 Scams gives people which is to not give out any personal information regardless of how appealing the prize sounds. Instead I would say that it is very important to be cautious when supplying any personal information and to make sure you know who you are actually giving it to and that they are a legitimate organization. First try and recall how and when you may have entered, read a copy of the Official Rules, look up the sweepstakes administrator online, and if all checks out, then accept and enjoy the prize! And never, ever, send any money to receive it!