What Sweepstakes Scammers Want and How to Stop Them

Avoid Becoming a Victim of Contest and Sweepstakes Fraud

Photograph of a hacker; learn how to stop him from stealing your information.
How Hackers Work, and How to Stop Them!. selimaksan / Getty Images

Knowing the signs of a sweepstakes scam is a good first step to protecting yourself from falling victim to them. But it's also helpful to know what scammers' goals are. Why do criminals use contests and sweepstakes to defraud people, and what are they trying to accomplish by doing so? Here is how some common sweepstakes and contest scams work.

Sweepstakes Scam Goal: Convince You to Give Your Money Away

Outright theft is a common goal of sweepstakes scams.

In this scenario, the goal of the scam artist is to try to convince you to send them cash under false pretenses.

  • How These Scams Trick You: Usually, this type of scam goes something like this: you are contacted by someone who claims that you won their giveaway. All you have to do to receive your prize is to wire them money to cover taxes (or service fees, or shipping, or import fees, or any number of other illegitimate excuses). They are usually in a big hurry to get you to give them your information, and they don't want to give you time to think over your response. Act now or never!
     
  • How to Recognize and Avoid This Sweepstakes Scam: Legitimate sweepstakes do not place strings on their prizes. You won't have to pay taxes to anyone but the IRS. Also, most legitimate giveaways won't have a problem with you taking the time to receive their response. And remember, any prize worth more than $600 will require an affidavit before a legitimate sponsor can deliver it.

    Sweepstakes Scam Goal: Gain Access to Your Bank or Credit Card Accounts

    If scammers can't get you to hand them money directly, they look for another way to part you from your cash. They do this by convincing you to turn over your bank account or credit card information so that they can clean out your accounts.

    • How These Scams Trick You: Here's one of the methods that scammers use to get your account numbers: you are contacted and told that you have won a prize, but that you need to verify your identity or prove that you can afford the taxes on the prize. A simple bank account check would give them the information they need to be able to release the prize.
       
    • How to Recognize and Avoid This Sweepstakes Scam: Legitimate sweepstakes do not need any form of payment identification. They are not required to check your income, nor do they have any good reason for doing so. Some sweepstakes sponsors require social security numbers, however; this is a legitimate piece of sensitive information that many sponsors will need before releasing a prize. Why? They need to be able to report the prize winner to the IRS for tax purposes.

    Sweepstakes Scam Goal: A Hard Sell

    Sometimes, the goal of a contest scam is not to rob you but to pressure you into buying something that you wouldn't normally buy.

    • How These Scams Trick You: This type of scam works something like this: you receive a phone call telling you that you've won a prize, but you need to go to a certain location to pick it up. When you get there, you find out that you need to listen to a 90-minute sales pitch before you can get your prize. 

      Even worse, the prize may be far less attractive than it sounds at first. For example, a common tactic for this sweepstakes scam was to tell people that they have won one of five prizes, including a new car or a trip. What wasn't mentioned was that the fifth prize (the one which everyone actually "won") was a discount coupon, a very cheap watch, or something else that wasn't worth your time.

      And you'll be very lucky if you manage to walk away without signing up for a timeshare or for a Ponzi scheme.
       
    • How to Recognize and Avoid This Sweepstakes Scam: Legal wins never have strings attached, including having to listen to sales pitches or making any kind of purchase. Just turn down any of these so-called "prizes."

    Sweepstakes Scam Goal: Identity Theft

    A very subtle type of sweepstakes scam leads to identity theft, where criminals attempt to trick you into giving them enough of your personal information for them to be able to pose as you and to open credit cards, take out loans, and even perpetrate crimes in your name. Be sure you know what kind of information is legit to share with sweepstakes sponsors so that you don't overshare.

    What to Do About Sweepstakes Scams

    Some people are so concerned about sweepstakes scams that they hesitate to enter contests at all. But here's the thing - most of the time, scammers don't know whether you're a sweeper or not. They'll contact people randomly, sending out hundreds of thousands of letters or emails, hoping to hit the few people who will fall for their tricks.

    Not entering sweepstakes won't help you - but recognizing the warning signs of a sweepstakes scam will. Be sophisticated enough to know how to tell legitimate wins from scams and you can safely enjoy entering sweepstakes and contests.

    If you are contacted by a scammer, here's where you can report sweepstakes fraud and help shut them down.

    Continue Reading...