The FTC Will Never Ask You For Money Because You Won The Lottery. We Promise.

Apparently, some group of geniuses has been calling people and pretending that they are from the FTC. They start out with some nonsense like “Hi, I’m calling from the Federal Trade Commission to tell you that you have won $250,000…”

They try to tell you that you won the lottery or some other bogus prize, and that you should give them money in order to collect your winnings. There are so many things wrong with this picture (not least of which is the fact that the FTC doesn’t collect money from consumers, period) that we don’t even know where to start.

The FTC says:

The FTC is the nation’s consumer protection agency. It investigates fraud and provides free information, but it never collects money directly from consumers. FTC staffers don’t have any involvement with this sweepstakes scam, but they do want you to avoid it.

The caller might suggest that the FTC is supervising the giveaway. He or she might even use the name of a real FTC employee. Your Caller ID might display the Federal Trade Commission’s name or a Washington, DC area code. Don’t be surprised if you receive repeated calls and follow-up faxes.

No matter how convincing the impersonation, you should never send money to claim a prize. No FTC employee will ever call to ask you to send money. Legitimate sweepstakes companies won’t either. Many older consumers and their families have reported this kind of scam, but anyone could be contacted.

Don’t pay people to collect prizes! Ever! Argh!

Scammers Exploit the FTC’s Good Name, Promise Phony Sweepstakes Prizes [FTC] (Thanks, Viola!)
(Photo: Johnny Vulkan )

Comments

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  1. Scoobatz says:

    I shouldn’t send money to claim a prize? Sorry, you lost me already.

  2. JollyJumjuck says:

    What if I wanted to win a good old fashioned scamming? Can I send money to win that?

  3. MyPetFly says:

    I can’t believe I feel for it again.

  4. Red_Flag says:

    If anyone has any idea of what the FTC does, would they really think it could be legit?

    “Hi, I’m calling from the Central Intelligence Agency to tell you that you have won $250,000…”

    “Hi, I’m calling from the Federal Bureau of Investigation to tell you that you have won $250,000…”

    “Hi, I’m calling from the Federal Emergency Management Agency to tell you that you have won $250,000…”

    Well… maybe the last one…

  5. Traveshamockery says:

    “Hi, we’re from the government, and we’re here to help.”

    /runs screaming into the hills

  6. SkokieGuy says:

    What if I work for a larger investment firm and I get a call from the gub’ment telling me they are giving me billions?

    Legit or scam?

  7. blackmage439 says:

    Meg,

    Maybe it might be about time to have a monthly Consumerist newsletter posted on the site that outlines the most obvious scams that people continuously fall for. Just a few to get started:

    1. Do NOT send in money to claim a prize.

    2. freecreditreport.com is NOT free. Free reports can only be had from annualcreditreport.com.

    3. Do not wire money to Nigeria to claim your great-grandmother’s buried treasure.

    4. Do not sign over your mortgage to someone who claims they can make the payments for you.

    • Outrun1986 says:

      @blackmage439:

      5. NEVER buy from a door to door salesman.

      • catastrophegirl chooses not to fly says:

        @Outrun1986: unless it’s a little girl wielding a box of thin mints or peanut butter samoans…. then i’m all for door to door sales. but now they just ambush you at the supermarket or make their parents sell them at work

        • bluewyvern says:

          @catastrophegirl: No, not even then. I am not down with that. Children should not be made to go door-to-door/stand in front of stores/make their parents pass around forms and guilt co-workers into ordering things. That goes for scouts, bands, choirs, teams, clubs, classes, underfunded school systems, EVERYTHING. It needs to stop!

          Kids should be either studying or playing, not shilling for whatever their group or activity is. Are we training them to be future footsoldiers of the next big MLM to come along? And I shouldn’t be shamed for not buying three to support the little angel, either.

          Did I mention I hate fundraisers?

          • Outrun1986 says:

            @bluewyvern: Most of the fundraisers specifically say NOT to go door to door with them, so if a little girl shows up at your house with candy or magazine subscriptions, they shouldn’t be. You don’t know where that money is going anyways, and if its even going to the proper organization. If you really want to donate to an organization, donate directly to them, not through a door to door salesman.

            I REALLY, REALLY hate being ambushed at Walmart as I am walking out with my 2-3 items that I needed because another store didn’t have them. I never get ambushed at Target or another store, its only Walmart. I live in NY state and these kids are still standing in the weather and they stand all through our frigid cold winters, and make their parents do it with them. This is simply just another form of soliciting, they are soliciting for donations.

            I also don’t agree with office selling, that kind of thing should be banned from all workplaces and simply does not have a place. We go to work to make money not to spend it while at work on someone’s bootleg purse party or tupperware party.

            I can understand the girl scouts selling cookies at the mall, or a group holding a fundraiser car wash, because they are selling a product or giving you a service (plus they have to work for the money they are getting, so your teaching them to work for money instead of just standing and begging) but this donation begging at retail stores has to stop because its simply begging, nothing else.

            When I go to Walmart and I am asked to donate to Children’s Hospital at the register, asked to buy a candy bar by the receipt checker and then ambushed by a group of kids at the door all in the same trip there is a problem with our society.

            • catastrophegirl chooses not to fly says:

              @Outrun1986: wow, times sure have changed. my brownie troop had to go around selling cookies and then when they came in we delivered them in my little red wagon. i am not kidding. of course someone’s mom was always with us and we only went to the houses of people we knew. but that’s how we earned money to go away to girl scout day camp for a week in the summer and to pay for our uniforms.
              door to door was the standard mode of operation at the time. i must be getting oooooold

  8. thebluepill says:

    Heck, this woman STOLE $12,000+ from her employer to pay someone in a nigerian scam!

    [news.postbulletin.com]

    • easy2panic says:

      @thebluepill: I am at the airport with ten million cash of your money, but to pay for the plane ticket, I need you to send me some of your money.

      I guess people just don’t understand logic.

    • econobiker says:

      @thebluepill: And a preachers wife in Selmer TN shot and killed her husband because she was kiting checks and he was cracking down on her.

      • frodo_35 says:

        we here in tn know she shot him because the ho shoes she had to wear were to tall.

      • RedwoodFlyer says:

        @econobiker: That’s what he gets for @crackalacker:

        Same thing whey you buy a $100 product with $50 instant rebate at Costco…you pay tax on the $100. I wonder how price adjustments work with VATs…especially on loss leaders?

  9. AlteredBeast (blaming the OP one article at a time.) says:

    What if the Nigerian Trade Commission calls me saying I won millions of dollars, but just need to send them a few thousand? Seems worth it, right?

    • Scoobatz says:

      @AlteredBeast: Personally, I would send money just in case. You can’t take the chance of it being real and you missing out. Your family and friends will never let you live that one down.

      By the way, do you have any idea when Bill Gates will be done with his BETA testing? I’ve been forwarding emails like crazy these past 10 (or so) years and I still haven’t received my first check yet.

  10. crackalacker says:

    Actually if you win a non-monetary prize you have to pay all federal taxes before you can claim it. I won a car a couple months ago and had to pay the income taxes on the value of the car befor i could have it. You can’t even take a loan out on the prize you won becaue you don’t have possession of it.

    • AlteredBeast (blaming the OP one article at a time.) says:

      @crackalacker: I’ve been wondering about a scenario like that, thinking that perhaps if I was so lucky then I could sell the vehicle to cover the taxes.

      Just wondering, how much was the value of the vehcile, and how much was the taxes?

      • crackalacker says:

        @AlteredBeast:
        The value of the car was $22,096 and they had me pay $5,524 (25%) directly to the orginization and then another ~$950 to the dealership to cover state sales taxes. I will get a portion of that back when i file but it will be just enough to cover my state income taxes. So when all is said and done it will cost me around $6,000 to $6,500 to win my car, but I can’t complain, I was already looking for a car.

        • thebluepill says:

          @crackalacker:

          Man.. thats hard to swallow.

          I understand that there are no taxes on winnings or prizes in Canada, that sounds cool.

        • mythago says:

          @crackalacker: That sounds sketchy. Why would you owe sales taxes? They bought the car, they’re giving it away to you. I understand that the car is a thing of value, but why isn’t that included in the prize? Also, why are you paying 25% to the organization? You owe income taxes to the government, not to private entities. Of course you would have to pay the IRS taxes based on the value of the car, but they’re not the IRS.

          I’m not questioning your credibility but I don’t understand how you can be told “Here’s a free car! Please pay us $6.5K to claim it.”

        • mythago says:

          @crackalacker: quick update – I ran your situation past my mom, a tax attorney. (I am an attorney, but I am allergic to tax law.) She said she had never heard of this being done, but it is certainly possible. You should:

          – get a receipt from the organization clearly stating that they are taking that money as “federal withholding”, and for the state, exactly what the withholding is for.

          – when you get the Form 1099 for the year in which this income to you is reported, the amounts paid as tax (income not sales) should be listed and so labeled on that form to evidence what you paid in as withholding.

          – you then take this amount as withholding on your federal return just like a W-2.

          Good luck – I still think the ‘sales tax to the dealer’ is shady.

          • crackalacker says:

            @mythago:
            I was good and kept everything. I got receipts for everything with an itemized statement.

          • RevRagnarok says:

            @mythago: Your mom hasn’t heard of a W2G as I posted above? Crackalacker paid the charity, and next January, they should send her a W2G, not just a receipt. Just like your employer sends a W2, it shows (items 2 & 14) how much federal and state tax has been withheld. The federal amount withheld is 25% since they don’t know what tax bracket you are in. The PDF is linked above.

    • RevRagnarok says:

      @crackalacker: Yeah, you get a W2G. Same thing when I won a Segway from buy.com many years ago. But, since I took the cash equivalent, they withheld 25% and sent it to the IRS. It’s standard for many large prizes (see below). Obviously, if you took a car, they can’t do that. ;)

      Of course, if it were a few months ago, I would’ve taken the cash and then bought a car myself since you can probably get an awesome deal nowadays AND the car you want…

      From the IRS W2G:

      The payer must furnish a Form W-2G to you if you
      receive:
      1. $600 or more in gambling winnings and the payout is at
      least 300 times the amount of the wager (except winnings
      from bingo, keno, and slot machines);
      2. $1,200 or more in gambling winnings from bingo or slot
      machines;
      3. $1,500 or more in proceeds (the amount of winnings
      less the amount of the wager) from keno; or
      4. Any gambling winnings subject to federal income tax
      withholding.
      Generally, report all gambling winnings on the “Other
      income” line of Form 1040. You can deduct gambling losses
      as an itemized deduction, but you cannot deduct more than
      your winnings.

      • crackalacker says:

        @RevRagnarok:
        I couldn’t take the cash equivalent the car was donated, it was a raffle for a charity. And btw I checked it out with my attorney and my CPA before i sent the check.

        @mythago:
        Its just like a cell phone, you may be paying $200 for it but you have to pay the sales tax on the entire amount it’s worth, the phone company paid $400, so you would have tax on that amount. and its like RevRagnarok put it, the charity is on the hook if I don’t pay so they collect it and pass it on.

  11. NikkiSweet says:

    I’m surprised no one has commented on the fairly obvious joke… “Scammers Exploit the FTC’s Good Name”

  12. frodo_35 says:

    But what if the prize is realllllly realllllly good.

  13. my_imaginary_friends_bore_me says:

    another reason why I don’t have a home phone

  14. aerick79 says:

    what about its the IRS saying that you have a lot of unpaid taxes, and if you don’t paid they will come and get you?

  15. Anonymous says:

    Last year, a county treasurer in Michigan embezzled from the county after getting suckered by these guys. He took over 1 million in county funds. This was a small county, the total yearly budget was only 4 million. The bank tried to warn him; he’s now serving 9+ years in prison.

  16. Pious_Augustus says:

    These people are idiots. I used to work for an Collection Agency and for the love of god some people actually went into debt because they recieved checks in the mail for people who they didn’t know cashed them and found out they were bad checks and they were scammed and then they had the nerve to think banks needed to eat up that debt because they were scammed.

    Why would anyone cash checks or buy into something that they don’t know the person or the source? I loved to try and collect from these people because they deserved it. You bought a car? Okay sell it and give me the money?

    Oh you don’t have the money to pay us? Tell me how much food you have in your fridge?

  17. Anonymous says:

    “Many OLDER consumers and their families have reported this kind of scam, but anyone could be contacted.”
    My grandfather use to be inundated with this kind of crap. Dozens of calls a day and 100s of letters per week. There are a large number of companies that deliberately prey on old people, convincing them to send away money for any reason you can think of. We had to move his money to an account controlled by my uncle to prevent him from giving his retirement fund away. We also changed his number and ordered the post office to deliver his mail to a PO box so we could check it and dump all the scams before they got to him. This wasn’t a stupid person, he was an engineer with radio design patents. This is simply someone who is very old and “could really use that money” the scammers were tempting him with. Even smart people can be tempted if they feel desperate.