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Feds shut down fake sweepstakes aimed at seniors

Millions were sent letters claiming they were winners; instead they were scammed out of more than $11 million.

By Mitch Lipka Sep 25, 2013 4:19PM

mage: Couple with winning lottery check (© Exactostock/SuperStock/SuperStock)A scam that that led recipients to believe they were sweepstakes winners was shut down after the Federal Trade Commission won a court order halting the scheme. Nearly 4 million letters were sent as part of the scam in the past two years alone, the FTC said.


With claims about millions of dollars awaiting them, victims around the world were asked to pay a $20-$30 fee with a form made to appear like it was needed to collect the money. The forms employed vaguely legal-sounding language like "Approval Acceptance Form" and "Right of Legal Registration." Most of the victims were senior citizens, the FTC said.


In addition, FTC said despite the boasts on the front of the letters, those who were able to plow through the fine print would find disclaimers noting that all that would be provided is a list of sweepstakes.


"Consumers frequently fail to see or understand this language and send money to the defendants," the FTC said. "The FTC alleges that this language does not appear designed to correct deceptive statements, but exists mainly as an attempt to provide a defense to law enforcement action. Consumers get nothing of value in exchange for their payment."


The FTC said consumers lost more than $11 million in the scam, which has been run, the agency said, by Liam O. Moran of Ventura, Calif. The scam has been ongoing for seven years, the FTC said. The operations' assets were temporarily frozen by court order.


In just the first half of this year, the FTC said Moran and his businesses sent almost 800,000 letters to 156 countries.


Others named in the case are co-defendants Applied Marketing Sciences LLC; Standard Registration Corporation, also doing business as Consolidated Research Authority and CRA; and Worldwide Information Systems Incorporated, also doing business as Specific Monitoring Service, SMS, Specific Reporting Service, SRS, Universal Information Services, UIS, Compendium Sampler Services, and CSS.



The FTC said it worked on the case with the United States Postal Inspection Service as well as police departments in Canada, the United Kingdom, and Australia.

Here are some tips from the FTC about how to avoid getting conned by a prize offer:
  1. Legitimate sweepstakes don’t require you to pay or buy something to enter or improve your chances of winning, or to pay "taxes" or "shipping and handling charges" to get your prize. If you have to pay to receive your "prize," it’s not a prize at all.
  2. Sponsors of legitimate contests identify themselves prominently; fraudulent promoters are more likely to downplay their identities. Legitimate promoters also provide you with an address or toll-free phone numbers so you can ask that your name be removed from their mailing list.
  3. Bona fide offers clearly disclose the terms and conditions of the promotion in plain English, including rules, entry procedures, and usually, the odds of winning.
  4. It’s highly unlikely that you’ve won a "big" prize if your notification was mailed by bulk rate. Check the postmark on the envelope or postcard. Also be suspicious of telemarketers who say you’ve won a contest you can’t remember entering.
  5. Fraudulent promoters might instruct you to send a check or money order by overnight delivery or courier to enter a contest or claim your "prize." This is a favorite ploy for con artists because it lets them take your money fast, before you realize you’ve been cheated.
  6. Disreputable companies sometimes use a variation of an official or nationally recognized name to give you confidence in their offers. Don’t be deceived by these "look-alikes." It’s illegal for a promoter to misrepresent an affiliation with -- or an endorsement by -- a government agency or other well-known organization.
  7. It’s important to read any written solicitation you receive carefully. Pay particularly close attention to the fine print. Remember the old adage that "the devil is in the details."
  8. Agreeing to attend a sales meeting just to win an "expensive" prize is likely to subject you to a high-pressure sales pitch.
  9. Signing up for a sweepstakes at a public location or event, through a publication or online might subject you to unscrupulous prize promotion tactics. You also might run the risk of having your personal information sold or shared with other marketers who later deluge you with offers and advertising.
  10. Some contest promoters use a toll-free "800" number that directs you to dial a pay-per-call "900" number. Charges for calls to "900" numbers may be very high.
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4Comments
Sep 25, 2013 5:55PM
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We rented a small two-bedroom house with central heat/air, carport, and large storage unit for $500 a month, plus utilities.  The year before the tenant moved in we put in all new countertops, new windows, and a new stove.  Four years later and our 45 year old tenant was asked to leave because her check bounced, we even allowed her to conduct her part-time business from home.  The cabinets were chipped, food particles and grease covered the cabinet doors, the range had layers of grease (surprised she didn't burn the place down), chips, had to take the range apart to try to clean for hours, the new hood vent was filthy with grease, left a dent inside of the new fridge we bought two years ago, a scratch on the outside that went to the metal, and both crispers are all scratched up like she used a BBQ steel brush to clean them with.  She used nails on millwork, changed two deadbolts without our permission, and had someone cut a hole to insert a lower drain in the washer hookup.  Had to repaint all the walls to make them look clean, ripped out all the carpeting, and she left tons of garbage for us to take to the dump.  She had a mouse problem that wasn't reported and we had to hire an exterminator, the mice got into the insulation inside of the stove.  When I went to order the insulation, it was going to cost $325 to replace it because they had to take the stove to the shop and take it apart to replace it.  When I texted her and told her I thought she belonged on a "do not rent to list", her reply was if you don't stop with your nasty post and ever contact me again I'm going to sue you for libel and slander.  Did she really think her $250 deposit covered it all.  Perfect example of someone that doesn't care about anything except themselves, and lives like a pig.
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