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Lottery, prizes ‘top consumer frauds’

Dubai, January 31, 2012

Lottery and prize scams are among the leading consumer frauds globally, said an expert, advising consumers not to be fooled by imposters tempting them with big financial prizes and counterfeit checks.

It’s tempting to play a foreign lottery, especially when you hear you have better odds playing overseas. It’s also tempting to draw on your sweepstakes winnings of a million dollars, especially when the check looks legitimate and the funds are cleared for use by your bank in just a couple of days. If it sounds too good to be true, it usually is, said Shelley Bernhardt, director of Consumer Protection at Western Union, a leader in global payment services.

“Sophisticated scammers prey on people lured in by these ‘once in a lifetime’ offers and then take the money and run,” she added.

“We want to provide consumers with the right information so they can avoid these kinds of traps. After all, they’re the first and best line of defense against fraud.”

Victims get an unsolicited phone call, email, letter or fax from someone claiming to work for a government agency or claiming to represent a well-known celebrity, notifying them that they’ve won a lot of money.

The scammer gains their trust and explains that, in order to collect their winnings, they first have to send a small sum of money back to pay for processing fees or taxes. Following the instructions they’re given, they immediately wire the money. They never hear again from the person who contacted them and they’re out the money they paid for “fees and taxes.”

Victims may also get an unsolicited check or money order and directions to deposit the money and immediately wire a portion of it back to cover processing fees or taxes.
Weeks later, victims learn the checks are counterfeit, but they’ve already wired the money to cover the “taxes” and can’t get it back. And they’re on the hook to pay their banks back for any money they withdrew.

A legitimate sweepstakes company won’t make you pay-to-play or pay to receive your winnings, said Bernhardt.

Scammers also lie to lure a victim in and may use appealing devices, such as celebrity names, to make their offer seem more authentic, she warned.

Victims are tempted by a legitimate-looking check and mistakenly think that banks verify the authenticity of checks before paying out on them. This is false—by law banks must make the funds deposited available within a few days, but it can take weeks to uncover a fake check. When the check bounces, the bank will deduct the amount that was originally credited to your account.

Said Bernhardt, “Lottery and prize scams are one of the leading fraudulent schemes we see people fall victim to but people can protect themselves by keeping in mind a few simple rules.”

The rules include:

• Never send money to people or organizations you don’t know; only send money to people you personally know and trust.

• Never send money to pay for taxes or fees on lottery or prize winnings. Legitimate sweepstakes don’t require you to pay or buy something to enter or improve your chances of winning; or to pay taxes or processing fees to get your prize.

• Never provide your banking information to unknown individuals or businesses.

• Never withdraw or send funds from a check in your account until it officially clears, which can take weeks.

• Be alert. If an offer sounds too good to be true, it usually is.

• Do your research. Check out the company that contacted you with local law enforcement or your local consumer protection agency, or other trusted sources.

• Read the fine print—legitimate offers clearly disclose the terms and conditions of the promotion, including the rules, how the entry process works, and your odds of winning.

• Don’t play foreign lotteries. It’s illegal.

Western Union provides a trusted and reliable way for people to send money to family members and friends, Bernhardt said.

However, it is important to remember that a money transfer can be paid out to the receiver within a short time—even minutes—and after the money is paid, consumers cannot obtain a refund from Western Union even if the transfer was the result of fraud, she added. – TradeArabia News Service




Tags: banks | Western Union | Fraud | Lottery | Prize | Scam |

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