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Prize Scams

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You’ve just won $5,000! Or $5 million. Or maybe it’s a fabulous diamond ring, or luxury vacation? More likely, it’s a prize scam, and you’ll find the prize isn’t worth much — if you get a prize at all. Here’s one way to think about it: if you have to pay, it’s not a prize.

  • About Contests and Prizes
  • Signs of a Prize Scam
  • Foreign Lotteries
  • Text Message Prize Offers
  • Check Them Out
  • Report a Scam

About Contests and Prizes

Who doesn’t want to win something? But before you drop in a quick entry or follow instructions to claim a prize, here are a few things to know:

Legitimate sweepstakes are free and by chance

It’s illegal to ask you to pay or buy something to enter or increase your odds of winning.

Prize promoters might sell your information to advertisers

When you sign up for a contest or drawing, you probably will get more promotional mail, telemarketing calls, or spam email instead of a prize.

Prize promoters have to tell you certain things

Telemarketers are legally required to tell you the odds of winning, the nature or value of the prizes, that entering is free, and the terms and conditions to redeem a prize. Sweepstakes mailings also must tell you that you don’t have to pay to participate. They also can’t claim that you’re a winner unless you’ve actually won a prize. And they’re not legally permitted to include fake checks that don’t clearly state they’re non-negotiable and have no cash value.

Signs of a Prize Scam

Plenty of contests are run by reputable marketers and non-profits. But every day, people lose thousands of dollars to prize scams. Here are some signs you’re dealing with a scam:

You have to pay

Legitimate sweepstakes don’t make you pay a fee or buy something to enter or improve your chances of winning — that includes paying “taxes,” “shipping and handling charges,” or “processing fees” to get your prize. There’s also no reason to give someone your checking account number or credit card number in response to a sweepstakes promotion.

A skills contest where you do things like solve problems or answer questions correctly can ask you to pay. But these contests also tend to get more difficult and expensive as you advance, leaving contestants with nothing to show for their money and effort.

You have to wire money

You may be told to wire money to an agent of “Lloyd’s of London” or another well-known company — often in a foreign country — to “insure” delivery of the prize. Don’t do it. Wiring money is like sending cash: once it’s gone, you can’t trace it or get it back. The same goes for sending a check or money order by overnight delivery or courier, or putting money on a prepaid debit card.

You have to deposit a check they’ve sent to you

When you do, they’ll ask you to wire a portion of the money back. The check will turn out to be a fake, and you will owe the bank any money you withdrew.

You’re told they’re from the government — or another organization with a name that sounds official

They might say they’re from an agency like the Federal Trade Commission and are informing you that you’ve won a federally supervised lottery or sweepstakes. Or they might use an official-sounding name like “the national consumer protection agency” or the non-existent “National Sweepstakes Bureau.” But they’re imposters. The FTC doesn’t oversee sweepstakes, and no federal government agency or legitimate sweepstakes company will contact you to ask for money so you can claim a prize.

Other scammers might pretend to be a company like Publishers Clearing House or Reader’s Digest, which run legitimate sweepstakes. Look for signs of a scam, but if you’re still unsure, contact the real companies to find out the truth.

Your “notice” was mailed by bulk rate

It’s not likely you’ve won a big prize if your notification was mailed by bulk rate. Other people got the same notice, too. Check the postmark on the envelope or postcard. Do you even remember entering? If not, odds are you didn’t.

You have to attend a sales meeting to win

If you agree to attend, you’re likely to endure a high-pressure sales pitch. In fact, any pressure to “act now” before you miss out on a prize is a sign of a scam.

You get a call out of the blue, even though you’re on the Do Not Call Registry

Once you register your phone number for free at donotcall.gov, unwanted telemarketing calls should stop within 30 days. Unless the company falls under one of the exemptions, it shouldn’t be calling: it’s illegal.

Foreign Lotteries

Sometimes a letter you get will say you’ve won a foreign lottery or sweepstakes. Typically, the letter will include a check. This is a fake check scam. Or a letter will say they’re offering you a chance to enter a foreign lottery. The truth is that, even if your name was entered, it’s illegal to play a foreign lottery.

Text Message Prize Offers

You get a text message that says you’ve won a gift card or other free prize. When you go to the website and enter your personal information, you’ll also be asked to sign up for “trial offers” — offers that leave you with recurring monthly charges. Worse, the spammer could sell your information to identity thieves.

When you see a spam text offering a gift, gift card, or free service, report it to your carrier, then delete it. Don’t reply or click on any links; often, they install malware on your computer and take you to spoof sites that look real but are in business to steal your information.

Check Them Out

Scammers don’t obey the law. To avoid a scam, you have to do some research. If you’re not sure about a contest or promoter, try typing the company or product name into your favorite search engine with terms like “review,” “complaint” or “scam.” You also might check it out with your state attorney general or local consumer protection office.

Keep in mind that many questionable prize promotion companies don’t stay in one place long enough to establish a track record, so if no complaints come up, it’s no guarantee that the offer is real.

Report a Scam

If you think you’ve been targeted by a prize scam, report it to the FTC.

In fraudulent schemes, "winners" almost always have to dip into their pockets to enter a contest or collect their "prize.

What Is It Called When a Lawyer Only Gets Paid If He Wins?

If you suffer from a personal injury in California, you may wonder what your legal options are, especially if you do not have the funds to pay expensive legal fees. In fact, many people refrain from pursuing legal action because they believe they cannot possibly afford an attorney out of pocket. However, many law firms offer agreements to help make attorneys more accessible and affordable for California residents. These agreements are contingency fee arrangements.

What Is a Contingency Fee?

A contingency fee is a fee arrangement that many law firms adapt to help lower your out-of-pocket costs when filing a personal injury lawsuit. Simply put, if the accident attorney you hire does not secure a settlement on your behalf, you do not have to pay him or her any legal fees. If your attorney does secure a settlement on your behalf, he or she will deduct an agreed-upon percentage from the final settlement amount as payment.

Your attorney will inform you of the percentage he or she intends to collect before you decide to hire him or her. Your attorney should also let you know if he or she intends to deduct any additional costs and expenses related to your case as well, such as filing fees or report request costs. This arrangement provides you with a very low-risk path to receiving the legal services you need to recover compensation.

How Much Are Contingency Fees?

The contingency fee you will pay depends on which law firm you decide to hire. Most personal injury attorneys charge a contingency fee of 33.3% if your case does not go to trial and 40% if the lawsuit does enter the courtroom. The majority of personal injury lawsuits actually settle out of court via negotiations. Your attorney may not make a distinction between these two types of settlements, charging a flat contingency rate for either outcome.

For example, say that you suffer injuries in a car accident and you sign the standard contingency fee agreement with your attorney: 33.3% if your case settles out of the courtroom and 40% if your case goes to trial. If you settle outside of the courtroom and receive compensation totaling $50,000, your attorney will receive $16,650 for legal fees and you will receive $33,350. If your case does go to trial and you receive a $50,000 settlement, your attorney will receive $20,000 for legal fees and you will receive $30,000.

The Importance of Contingency Fee Arrangements

While contingency fees may seem quite high, they actually come at a little risk to you and provide a way to receive top quality legal services without paying expensive fees out-of-pocket. Contingency fee agreements can provide numerous benefits to people who are trying to file a personal injury lawsuit, namely in terms of accessibility and incentive.

  • Legal services are not free in the first place, and you will have to pay legal fees regardless of contingency fee arrangements. Hiring an attorney with a contingency fee agreement will help you receive legal services and resolve the payment arrangement without additional stress.
  • Contingency fee agreements also give your attorney an incentive to win your case. If he or she does not secure a settlement, your attorney does not receive payment. As a result, your attorney will work as hard as possible to reach a successful outcome.
  • Contingency fee arrangements provide a low-risk method of pursuing a personal injury lawsuit. If you had to pay out-of-pocket to simply obtain an attorney to represent you, you could lose out on thousands of dollars if you do not receive a settlement. You only pay these legal fees if you win, and you are not charged legal fees in the case of an unsuccessful outcome.

If you are seeking an attorney to represent you in your personal injury claim or lawsuit, consider hiring an attorney who offers a contingency fee agreement. While you will have to pay funds out of your settlement to this attorney, legal services are not free in the first place – and contingency fees help you obtain these services without risking your personal finances.

Don't pay a single dime, until we win your case for you! This is known as a contingency fee agreement. Check out this blog to learn more today! ]]>