Canadian Council of Better Business Bureaus: Sweepstakes Fraud Alert

Canadian Council of Better Business Bureaus - the governing body of the 14 Better Business Bureaus (BBB) across Canada

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Canadian Council of Better Business Bureaus: Sweepstakes Fraud Alert

BBBs Issue International Alert: Cross-Border Sweepstakes Fraud is Surging

July 23, 2001-- Better Business Bureaus in the United States and Canada today issued an alert cautioning consumers about a surge in fraudulent cross-border sweepstakes notifications.

Consumers in states across the U.S. are contacting Better Business Bureaus to ask about the legitimacy of notices they receive by mail announcing that they have won substantial sums of money. Consumers are instructed to send a check totaling between $20 and $40 to an address in Canada in order to collect their "entire award package." The promised winnings range from thousands to hundreds of millions of dollars. The prize notifications are mailed from U.S. addresses, but typically the return envelope is imprinted with a Canadian address.

"For the past several weeks the Canadian Council of Better Business Bureaus (CCBBB) has been tracking this increase and inviting U.S. consumers to send the original sweepstakes notice and related information to the CCBBB office. Preliminary findings indicate that the payments are directed to mailbox drops in the Toronto, Ontario, Canada area. We are working with Canada Post, the Canadian Competition Bureau, and police agencies on this matter," said the president and CEO of the CCBBB.

Such fraudulent mail offers don't just victimize consumers; they divert funds that might otherwise be spent for legitimate products and services, according to Whitelaw. He estimates that $25 billion is leaving the real North American economy and going into the pockets of these scam artists operating "you've won money" and similar "get rich quick" schemes.

"Raising public awareness to this fraud is crucial. Everyone loves to be a winner, but don't allow enticing dollar signs to obstruct your common sense," said Ken Hunter, president and CEO of the U.S. Council of Better Business Bureaus. "Legitimate sweepstakes do NOT require a fee to collect your winnings. Contact your BBB if you are uncertain about a particular offer."

Information provided by consumers who have recently received fraudulent sweepstakes promotions reveals the following typical scenarios:

Linda W., Kingsburg, CA - Requested to send $26 to receive $6,000. General Services International 5863 Leslie Street, Suite 1004 Willowdale, Ontario M2H 1J8 (Toronto) (Mailbox drop)

Donald H., Tumacacori, AZ - Requested to send $26 for a prize payment of $7,500 to Center for International Disbursements, Office of the Treasurer, 3219 Yonge Street, Suite 342, Toronto, Ontario M4N 2L3 - (Mailbox drop)

David A., New York, NY -Requested to send $20 to share between $70 million and $420 million. Sent check to MMA World Headquarters 3219 Yonge Street, Toronto M4N 2L3 (Mailbox drop). Check was cashed in Vancouver, British Columbia - 2,500 miles from Toronto.

Kristin K., Oconomowoc, WI - Received a letter June 27, 2001 with an announcement that she had won a $5,000 cash award from Security Express, 3219 Yonge Street, Suite 342, Toronto M4N 2L3. (Mailbox drop is the same one used by MMA World Headquarters above). Ms. K. was asked to send $26 to claim her prize.

BBBs advise consumers to remember the following if they receive a letter or phone call announcing that they have won money:

Are you being directed to pay a fee upfront or purchase a product in order to "win" a sweepstakes contest or collect a sweepstakes prize? Legitimate sweepstakes don't require you to pay "taxes" or "shipping and handling" or any other fee, no matter how small, to get your prize. U.S. law prohibits requirements that you buy something to enter a sweepstakes contest or to receive sweepstakes mailings.

Ask yourself if you had ever actually entered this company's sweepstakes? You probably did not.

Read the fine print on the sweepstakes offer or entry form. Usually it says something to the effect that you win, IF your number is selected or IF your number is one of the winning numbers.

Be wary of any check enclosed with the promotion. The mailing of fake checks that don't clearly state that they are non-negotiable and have no cash value is against the law.

Don't be deceived by seals, names or terms that imply an affiliation with or endorsement by the federal government. It's illegal for a promoter to misrepresent an affiliation with a government agency or other well-known organization.

One final word of advice: Most questionable sweepstakes or prize promotion businesses don't stay at one address long enough for BBBs or state consumer protection offices to develop reports on their marketplace records.

"You cannot assume that an absence of complaints means the offer is legitimate. Fraudulent businesses quickly close shop, discard their cell telephones, abandon the 1-800 numbers, and move to another address to avoid law enforcement detection," Whitelaw said.

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