Dear Consumer Ed:

I’m worried about my 84 year-old aunt.  I was at her house and noticed she had a box of sweepstakes and lottery letters on her kitchen table.  She insists she is not playing the lottery, but I’m concerned that she is sending what little money she has to strangers.  What should I do?

Consumer Ed says:

You’re right to be concerned.  You should try to help your aunt understand the potential danger of participating in these sweepstakes and lotteries.  They are often scams, especially designed to take advantage of older consumers.

With regard to lotteries, you should remember two important things.  First, you have to “pay to play.”  That is, if you didn’t buy a ticket, then you could not have won a prize.  If your aunt received a notice about winnings from a lottery and she doesn’t have a ticket showing that she paid for the opportunity to play, then the award letter is probably a scam. 

Second, there are only a few legal lotteries in which consumers may participate, and all of those are heavily regulated by the government.  In fact, the only entities that can legally operate lotteries in Georgia are the Georgia Lottery Corporation and some charitable organizations.  Your aunt should avoid participating in any lottery that is conducted by any other entity, especially those conducted in other countries.

Sweepstakes are a little different from lotteries. They are a promotional device – often a way of advertising a product or service – through which prizes are awarded to participants by chance.  Unlike lotteries, the consumer is not required to purchase items or pay entry fees or taxes prior to receiving the prize.  With respect to sweepstakes then, your aunt should not be required to “pay to play.”

Although legitimate companies will not require your aunt to pay to enter or to improve her chances of winning, many consumers believe they will have a better chance of winning if they buy a product – and so they do. This can lead to problems. In some instances, consumers who believe that they are sending money to participate in the sweepstakes are really just signing up to receive other sweepstakes offers.   In other cases, there is language hidden in the terms of the sweepstakes offer that will allow the company to automatically debit the consumer’s checking account on a regular basis until the consumer cancels.  Canceling services with these companies can be time-consuming, and it can be extremely difficult to receive a refund once one is requested.

If your aunt is willing, you should write letters to the companies on her behalf, asking to be removed from their mailing lists.  If you find that she has paid money to any of these companies, you should check to see whether the company offered any product or service to your aunt and, if so, whether it was actually provided.  If the company failed to provide the product or service as it was described in the advertisement, then you have grounds to request an immediate refund and to cancel all future billing.

If you believe that your aunt is receiving sweepstakes or lottery solicitations that are deceptive or illegal, then you can take other action.  You can forward copies of these advertisements to your local Post Office, the Federal Trade Commission, and the Georgia Governor’s Office of Consumer Protection.

If you enjoyed this post, make sure you subscribe to my RSS feed!