The sweepstakes scam plays on the fact that people like to win prizes like cash, cars, electronics and trips. In the end you don't receive a prize and find that you have paid money for nothing or just had your money stolen.
How do the thieves get your money? One way is that you are contacted and informed that you have won a contest, sweepstakes or giveaway. Now to get your prize you must send some money to cover taxes, shipping / handling, import fees or service charges etc.
Legitimate contests don't require you to pay fees in order to get your prize. Taxes, well that is between you and the CRA in Canada or the IRS in the United States.
Another way you can lose in a sweepstakes scam is when the thieves get access to your credit card, banking information or other personal information. Some scammers do this by claiming you have already won a prize and other scams are based on you entering a contest which doesn't exist.
They will claim that need all this personal information in order to verify that you are who you say you are. Or they need to have access to your bank account or credit card information to ensure you can pay any fees or taxes that you have to pay to get your prize. The goal is identity theft, fraudulent use of your credit card or draining your bank account of the funds in it.
If the sweepstakes is legitimate they do not need your banking or credit card information.
Another sweepstakes scam involves trying to sell you something. You are told that you have won one of a group of prizes, one of 4 prizes for example. This might include a car or a trip but you are not told what all the prizes are. To claim you prize you must come to a specific location on a certain time and date.
Eager to collect your prize you arrive to find out that you have to sit through a sales presentation. The whole idea is to pressure you into buying something that you would not normally buy. In the end your prize ends up being one of the cheap prizes like a gift card, coupon or something of little value.
Legitimate contests don't have you going to seminars or having to purchase something before you can get your prize.
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