Federal court shuts down massive sweepstakes scam

ID-100128578It’s one of the most common scams we hear about at BBB. You get a letter in the mail telling you you’ve won a sweepstakes. All you have to do is send in a payment. After you do, you never hear back, because there really is no sweepstakes. The scammer does it to a lot of people and rakes in a lot of money.

A federal court just shut down a major sweepstakes scam being run out of California, at the request of the Federal Trade Commission. The scam sent out 3.7 million letters in the past two years and took in over $11 million since 2009 from people in the U.S., Canada, the UK, France, Japan, and many other countries—156 countries in the first half of 2013.

Most of the victims appear to be over 65 years old.

According to the FTC, Liam O. Moran of Ventura, California and his companies have been mass mailing personalized letters to millions of consumers claiming they have won a large cash prize. The letters typically have large, bold statements stating things like “Over TWO MILLION DOLLARS in sweepstakes has been reserved for you.”

Consumers are told to send in a fee of $20 to $30 to collect their winnings and are often told they are “guaranteed” to get the prize money if they pay. The scammers make it seem urgent by telling the consumer it’s a limited-time offer. Fine print on the back directly contradict the prize claim on the front. The company only claims to be providing a list of available sweepstakes.

The court order temporarily stops operation and freezes its assets..

Moran’s co-defendants are Applied Marketing Sciences LLC; Standard Registration Corporation, also doing business as Consolidated Research Authority and CRA; and Worldwide Information Systems Incorporated, also doing business as Specific Monitoring Service, SMS, Specific Reporting Service, SRS, Universal Information Services, UIS, Compendium Sampler Services, and CSS.

Just because this particular sweepstakes scam got shut down, don’t relax and assume other letters or calls you receive are legitimate. There are many scams just like this and worse. In fact, Moran’s scheme is rather tame compared to some sweepstakes scams.

Not long ago we had someone call in who was being asked to wire an “advance fee” of over thousands of dollars overseas with a Money Pak card. He was so excited, thinking he was about to win millions of dollars. Luckily we were able to convince him that wiring the money wasn’t a good idea.

If you think you might have won a sweepstakes BBB offers the following advice:

  • Don’t expect to win a contest you never entered. You can only win a sweepstakes you enter. If you have entered a sweepstakes, keep track of who you’re entering with.
  • Don’t get tricked by “official-looking” material. Seals, official-sounding names and terms that imply affiliation with or endorsement by a government entity are commonly used by scammers to fool consumers into thinking they are legitimate.
  • A true sweepstakes will not make its winner pay fees. If you are asked to mail or wire money to pay fees or taxes, you’re looking at a scam. Legitimate prizes do not come with processing fees and taxes are paid directly to the Internal Revenue Service (IRS) after winnings are collected.
  • Never agree to deposit a check and send a portion to someone else. This is a well-known scam. No matter how legitimate the check may appear to be, no matter what story or reasonable-sounding explanation you are given, you will get burned. A bank teller might accept the check, but when it turns out to be fake, you will have to reimburse the bank.
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2 Responses to Federal court shuts down massive sweepstakes scam

  1. Pingback: Federal court shuts down massive sweepstakes scam | Where to find suppliers

  2. Eileen Turcotte says:

    I am over 65 and for a period of 4 months I collected all the “Lottery” mail I received asking for a processing fee. I totaled these requested fee up and had and out put of $984.50 for the 4 months. Take that times a year’s worth of 4 months and you have $2953.50. Now take that times the number of Seniors who did not know any better and sent the money in. That is a big rip off of our Seniors. If it requests a fee I throw it in the trash.

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