August 4, 2001
BBB Alert: Cross-Border Sweepstakes Fraud is Surging
Better Business Bureaus in the United States and
Canada have issued an alert cautioning consumers about a surge in fraudulent cross-border
Consumers in states across the U.S. are contacting Better Business Bureaus to ask about
the legitimacy of notices they receive by mail announcing that they have won substantial
sums of money. Consumers are instructed to send a check totaling between $20 and $40 to an
address in Canada in order to collect their "entire award package." The promised
winnings range from thousands to hundreds of millions of dollars. The prize notifications
are mailed from U.S. addresses, but typically the return envelope is imprinted with a
"For the past several weeks the Canadian Council of Better Business Bureaus (CCBBB)
has been tracking this increase and inviting U.S. consumers to send the original
sweepstakes notice and related information to the CCBBB office. Preliminary findings
indicate that the payments are directed to mailbox drops in the Toronto, Ontario, Canada
area. We are working with Canada Post, the Canadian Competition Bureau, and police
agencies on this matter," said Bob Whitelaw, president and CEO of the CCBBB.
Such fraudulent mail offers don't just victimize consumers; they divert funds that might
otherwise be spent for legitimate products and services, according to Whitelaw. He
estimates that $25 billion is leaving the real North American economy and going into the
pockets of these scam artists operating "you've won money" and similar "get
rich quick" schemes.
"Raising public awareness to this fraud is crucial. Everyone loves to be a winner,
but don't allow enticing dollar signs to obstruct your common sense," said Ken
Hunter, president and CEO of the U.S. Council of Better Business Bureaus. "Legitimate
sweepstakes do NOT require a fee to collect your winnings. Contact your BBB if you are
uncertain about a particular offer."
Information provided by consumers who have recently received fraudulent sweepstakes
promotions reveals the following typical scenarios:
Linda W., Kingsburg, CA - Requested to send $26 to receive $6,000. General Services
International 5863 Leslie Street, Suite 1004 Willowdale, Ontario M2H 1J8 (Toronto)
Donald H., Tumacacori, AZ - Requested to send $26 for a prize payment of $7,500 to Center
for International Disbursements, Office of the Treasurer, 3219 Yonge Street, Suite 342,
Toronto, Ontario M4N 2L3 - (Mailbox drop)
David A., New York, NY -Requested to send $20 to share between $70 million and $420
million. Sent check to MMA World Headquarters 3219 Yonge Street, Toronto M4N 2L3 (Mailbox
drop). Check was cashed in Vancouver, British Columbia - 2,500 miles from Toronto.
Kristin K., Oconomowoc, WI - Received a letter June 27, 2001 with an announcement that she
had won a $5,000 cash award from Security Express, 3219 Yonge Street, Suite 342, Toronto
M4N 2L3. (Mailbox drop is the same one used by MMA World Headquarters above). Ms. K. was
asked to send $26 to claim her prize.
BBBs advise consumers to remember the following if they receive a letter or phone call
announcing that they have won money:
Are you being directed to pay a fee upfront or purchase a product in order to
"win" a sweepstakes contest or collect a sweepstakes prize? Legitimate
sweepstakes don't require you to pay "taxes" or "shipping and
handling" or any other fee, no matter how small, to get your prize. U.S. law
prohibits requirements that you buy something to enter a sweepstakes contest or to receive
Ask yourself if you had ever actually entered this company's sweepstakes? You probably did
Read the fine print on the sweepstakes offer or entry form. Usually it says something to
the effect that you win, IF your number is selected or IF your number is one of the
Be wary of any check enclosed with the promotion. The mailing of fake checks that don't
clearly state that they are non-negotiable and have no cash value is against the law.
Don't be deceived by seals, names or terms that imply an affiliation with or endorsement
by the federal government. It's illegal for a promoter to misrepresent an affiliation with
a government agency or other well-known organization.
One final word of advice: Most questionable sweepstakes or prize promotion businesses
don't stay at one address long enough for BBBs or state consumer protection offices to
develop reports on their marketplace records.
"You cannot assume that an absence of complaints means the offer is legitimate.
Fraudulent businesses quickly close shop, discard their cell telephones, abandon the 1-800
numbers, and move to another address to avoid law enforcement detection," Whitelaw
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