Prize Winning Scams | 1 out of 5 prizeFraudulent Sweeps-Stakes 1 Of 5 Prize
The 1-in-5 scam is one in which a telemarketer tells you that you have the best chance to win a huge prize out of any game on the market. Of course, the sale of "valuable merchandise" at inflated prices is expected, but you're told that if you invest "a small amount of money" the valuable prize you'll win will more than make up for it. It's important to understand that, even though you may win a prize, that and the purchased merchandise will only amount to about 30% of what you actually spent.
The problem is that there are so many scams in today's marketplace it's hard to tell the con from the real thing. Additionally, the trusting nature of the human psyche makes it difficult to believe that someone would knowingly take advantage of others. Some people may wonder what's wrong with spending a little if it makes you feel better and you could end up winning something great in the end. The problem is that many have lost their life savings in some cases and many others have spent hundreds to thousands of dollars before they realize they've been duped.
Congress is very concerned with these practices and recent Senate hearings brought the problem to light. One witness explained that $74,000 had been lost during a one year period to fraudulent practices whereas an 80-year-old explained she had turned over her entire monthly retirement income because she had been told she'd already won a prize. In one scheme 18,527 signed up for credit card protection where the con artist received $1.15 million from their customers. In actuality they were working with a legitimate company who actually only charged $10 per person for the protection program and earned only $34,523 for their efforts.
It's important to remember that con artists are masters at "double speak." This is where they talk in circles until you're convinced you've won a prize in exchange for a small processing fee, customs, duties, and taxes, and that upon receipt of your check by overnight mail, your prize will be forwarded immediately. Finally, you will be told that you have won one of five prizes, but in order to claim it you would have to make a small purchase. Con artists are very convincing as to why making a sale makes it possible for the company to give away such lavish prizes and that this will make sure you're in compliance with the sweepstakes rules which require that you buy something.
The products offered vary in value as well as usability and often include brand names, or something that sounds like a brand name. And, of course, the 1-in-5 prices are highly desirable. They might include such things as cars, diamonds, trips abroad, cell phones, or even DVDs and satellite dishes. Of course you're told that the more times you call to make a purchase, the more likely you'll win the most valuable prize of the vehicle. This is just an example but, in actuality, games and prizes will vary greatly. Basically the only thing that even might be won is a fake, low grade, diamond and sapphire necklace that probably cost about $5 wholesale.
The FTC has successfully settled with various companies using deceptive prize-promotion telemarketing schemes. One of the most recent settlements was for $1.5 million which was agreed to without the companies admitting they had actually committed any criminal actions. In some cases 900 numbers were used which charged customers per call. The longer they could keep customers on the phone, the more they earned.
It's important that individuals use caution when dealing with unknown companies. We all want to be big winners in life, but there are much safer ways to feel like a winner without losing financial security along the way. There are so many scams today it's very difficult to tell a con from a legitimate promotion. If in doubt call the Better Business Bureau to determine the status of the company sending the material. If they have no record it's probably a new scam that just hasn't been identified yet.