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Every day, thousands of American consumers receive sweepstakes promotions by phone, over the Internet or in the mail. Legitimate sweepstakes are advertising and marketing techniques that offer participating consumers a chance to win a prize or money with no purchase or entry fee required. But if you have to pay to play or pay to receive your “winnings,” the promotion is a scam.
You should never have to pay to enter a sweepstakes. That includes paying shipping and handling fees, taxes, or buying a product to receive your “prize”. Those sweepstakes that notify you by a postcard that you’ve won a free prize are run by con artists whose sole purpose is to rip you off. And that “free prize” could end up costing you hundreds of dollars.
A legitimate sweepstakes will never charge you to win. If you receive a promotion congratulating you on winning a prize, but requiring a shipping and handling fee, it is not a sweepstakes and may be fraudulent. You should never have to pay any fee in order to receive a prize in a sweepstakes.
Ask the following questions to evaluate the legitimacy of sweepstakes or other promotions:
• Are the rules and entry instructions for the promotion easy to find and understand? If you can't understand what you must do to be eligible, think twice about responding.
• Does the advertising copy state that no purchase is necessary to win? Remember, you never have to pay to play when the contest is legitimate.
• Are the prizes worth winning? Make sure the prizes you are trying for are desirable and worth the effort. Do you really want to win them? Is there a cash option?
• Does the prize company ask for your credit card number, bank account information or social security number? No legitimate prize company asks for this information to declare you a winner.
To learn more on how you can prevent being scammed, visit: http://www.usps.com/postalinspectors
Play a Foreign Lottery and You’re Guaranteed to Lose!
If you’ve ever thought about buying that foreign lottery ticket and winning millions of dollars, think again. It’s illegal to play foreign lotteries in the United States. But the best reason not to play a foreign lottery through the mail is that you are pretty much guaranteed to lose. And once you play, you’ll be put on a list and you can count on receiving more “chances” to play – and lose.
Don’t play!
• It’s illegal. A federal statute prohibits mailing lottery tickets, advertisements, or payments to purchase tickets in a foreign lottery.
• It’s impractical. Unlike playing in your state’s lottery, many foreign lottery agents take your money and don’t even buy the tickets.
• It’s a losing proposition. Some scammers will tell you you’ve won and try to charge you a fee to collect nonexistent winnings.
• Don’t give out personal or financial information to anyone over the Internet or phone who tells you you’ve won – but need to pay taxes or a fee to collect your winnings.
Be aware. Be smart. Don’t take a chance on a foreign lottery. For more information on foreign lotteries and to order the free DVD, Longshot, go to http://www.usps.com/postalinspectors/dvdorder.htm or call 1-800-STAMP-24.
The latest scam to hit American consumers involves counterfeit financial instruments. It’s costing victims millions of dollars each month. Counterfeit checks and money orders—including postal money orders - are used in the scam, which often starts with what appears to be an innocent contact via an Internet chatroom or by email.
Con artists posing as students, tourists, and overseas military personnel ask for help in cashing checks and money orders, or target people looking for love or companionship, in order to exploit their vulnerability. Online auctioneers are also at risk. Scammers buy goods or services on the Web and offer payment by check or money order—often in excess of the actual value of the goods or services.
In most cases, con artists ship the check or money order and ask the victim to cash it, keep a portion as a “gift,” and wire back the rest, usually to an overseas address.
Bank customers are responsible for the checks they deposit, and victims must repay the bank for bad checks. Federal law requires banks to make the funds you deposit available quickly, but it’s important for consumers to know that, just because you can withdraw the money, it doesn’t mean the check is good. Banks often release funds from a cashier's check or money order before it clears.
Why are there so many victims?
Con artists have found a means of exploiting the charitable nature of Americans. This confidence scam plays to our core values as a society, which often blinds our judgment in dealing with the real issue. Additionally, the Internet brings this scam into our home, where we feel most secure and are more vulnerable.
There are also “non-victims.” Anyone who agrees to cash the instruments on behalf of a foreign citizen and keep a portion for themselves are not victims, they are accomplices.
Why Postal Money Orders?
Americans trust the U.S. Postal Service and the security provided by the U.S. Postal Inspection Service. Consumers often believe, incorrectly, that postal money orders and cashier’s checks are “good” if they’re cashed by a bank and are not subject to recourse. This is not true.
Postal Money Order Security Features
Similar to U.S. currency, postal money orders are designed with colored inks, watermarks, and security threads. Become familiar with the security features of genuine postal money orders:
• Watermarks of Benjamin Franklin, visible when held to the light, run through the white oval on the left front side of the money order. Watermarks are also visible from the reverse side.
• A dark security thread runs from top to bottom to the right of the Franklin watermarks. When held to the light, the thread reveals the microprinted letters “USPS” alternating right-side up and upside down throughout the thread. The letters are not visible if not held to the light.
Additional features you should be aware of:
• Warning instructions are printed on the reverse of postal money orders.
• Denominations are displayed in two locations, on the front, with no discoloration around the dollar amounts (discoloration may indicate alteration).
• Maximum value of $1,000 on domestic/$700 on international postal money orders.
Where the Counterfeits Come From
Most counterfeits originate overseas. They’re produced by an off-set printing process, which creates a document with an authentic appearance. However, fraudsters can’t replicate the security features of genuine postal money orders.
For additional information and resources on fraudulent money orders, call the Money Order Fraud Hot Line, run by the Inspection Service’s Criminal Investigative Support Center, at (800) 372-8347.
You think cashier's checks and money orders are as good as cash, but really they're just like any other check - they are only as good as the person sending it to you, whether it’s an online acquaintance or a buyer.
A seller advertises an item or service over the Internet, (i.e. roommate). A "buyer” often from a foreign country, contacts the seller about purchasing the item or service with a cashier’s check issued from a bank in the United States. The buyer tells the seller that he either mistakenly sent too large a check or that he will be sending a check for more than the purchase price.
In friendship cases, the scam starts in chat rooms on the Internet where participants tell a hardship story; usually involving having a large check they cannot cash in their own country. The scammer tells their chat room friend that, if they will cash the check, they can keep a portion of the proceeds for themselves.
In either event, the seller or friend is instructed to immediately wire the "balance" back to the buyer. The unsuspecting victim then deposits the cashier’s check in their bank account and waits until they think the check clears. Because a cashier’s check is used, a bank will typically release the funds immediately, or after a one or two day hold. At that time, the victim is able to withdraw the "overpayment" before the check winds its way back to the bank that supposedly issued it. That can take two to three weeks, or even longer. Of course, after wiring the money back to the buyer, the scam artist is nowhere to be found and the victim learns from his bank that the check was counterfeit, and he must refund the full amount to the bank.
These fake cashier’s checks and money orders appear to be authentic -- including the name of a legitimate United States bank and even containing the magnetic routing codes that appear along the bottom of the check.
Read More About Counterfeit Check Schemes at these links:
http://www.usps.com/missingmoneyorders/security.htm
http://www.fraud.org/tips/internet/fakecheck.htm
http://www.ftc.gov/opa/2004/12/checkoverpayment.htm
Phishing is a type of Internet piracy where thieves gain access to your personal account information, like your Social Security number, bank account numbers, and other confidential information that they can use to loot your checking account or use your credit card. In the worst case, you can become a victim of identity theft, and with the sensitive information obtained from a successful phishing scam, these thieves can get a loan or obtain credit cards in your name. This can do damage to your financial history and personal reputation that can take years to undo.
How to protect yourself:
- Never provide your personal information in response to an unsolicited request, whether it is over the phone or over the Internet. Emails and Internet pages created by phishers may look exactly like the real thing. They may even have a fake padlock icon that ordinarily is used to denote a secure site.
- If you believe the contact may be legitimate, contact the financial institution yourself. You can find phone numbers and Web sites on the monthly statements you receive from your financial institution, or you can look the company up in a phone book or on the Internet.
- Never provide your password over the phone or in response to an unsolicited Internet request. A financial institution would never ask you to verify your account information online.
- Review account statements regularly to ensure all charges are correct.
If you fall victim to an attack, act immediately to protect yourself. Alert your financial institution and place fraud alerts on your credit files. Monitor your credit files and account statements closely. You can report suspicious emails or calls to the Federal Trade Commission through the Internet at http://www.consumer.gov/idtheft, or by calling 1-877-IDTHEFT.
The Fair and Accurate Credit Transactions Act, also known as FACTA, gives new rights to free credit reports. FACTA also provides new rights to obtain your credit score.
FACTA affects your ability to obtain your credit report and your credit score in the following ways:
- You now have the right to obtain one free copy of your credit report from each of the three major credit bureaus every 12 months. FACTA also requires the major credit bureaus to provide a single point of contact so you can request your reports from all three companies with one toll-free phone call, letter, or Internet request.
- As of December 1, 2004, you have the right to obtain your score from a credit bureau as well as an explanation of the key factors used in computing the score.
- Title V of the FACTA established the Financial Literacy and Education Commission with the purpose of improving the financial literacy and education of persons in the U.S. The Commission has a website (http://www.mymoney.gov) and a toll-free number (1-888-696-6639) to coordinate the presentation of educational materials from across the spectrum of federal agencies that deal with financial issues.
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