FTC Orders Sweepstakes Promoter To Pay $9.5M For Deceiving Consumers…Again

Just like some people have a habit of entering as many sweepstakes as possible, some scammers can’t break their addiction to promoting bogus sweepstakes. Just ask the woman who now must pay $9.5 million because she continued pushing fake sweepstakes even after being caught by the feds.

The Federal Trade Commission announced Wednesday that former sweepstakes promoter Crystal Ewing must pay a $9.5 million judgement to settle charges that she violated a previous court order by continuing to run a sweepstakes scam.

According to the proposed FTC settlement [PDF], back in 2007 Ewing and other defendants were banned from prize promotions as part of a deal with the FTC to settle charges they deceptively convinced consumers in the U.S., Canada and the United Kingdom to send money to collect large cash prizes that, in fact, did not exist.

Under the new settlement, Ewing admits she violated the 2007 order through her work with another FTC defendant, Glen Burke, and Puzzles Unlimited LLC, which allegedly duped consumers with the promise of sweepstakes winnings in exchange for processing fees.

The FTC claims that Puzzles Unlimited used direct mail ads to entice consumers to enter promotions by using terms like “Notice of Grand Prize Payout” and “Grand Prize Guaranteed,” which led consumers to believe they had already won thousands of dollars and just needed to fill out a form containing a simple puzzle and submit a “processing fee” of $10 to $15.

However, the vast majority of consumers say they didn’t receive a payout of any kind. Instead, they tell the FTC they continued to receive additional rounds of puzzles that they were told they must complete correctly in order to claim the prize money.

With each round of mailers, the FTC says consumers were misled with promises of bonus winnings in exchange for additional fees. Consumers were often told they were tied for first place in the promotion regardless of whether or not this was true.

The FTC’s judgement against Ewing of $9.5 million represents the amount of money consumers lost in the alleged scam by Puzzles Unlimited.

In addition to the judgement, Ewing is once again banned from making material misrepresentations about goods and services, and from profiting from, and failing to properly dispose of, customers’ personal information.

FTC Obtains $9.5 Million Judgment Against Sweepstakes Promoter for Contempt [Federal Trade Commission]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.