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U.S. Postal Inspectors warn seniors against sweepstakes scams:
You're a Guaranteed Loser!

Mrs. Nelson’s 90-year-old husband, a former preacher, entered a nursing home a year ago, and it doesn’t look as if he’ll be leaving any time soon. Although it costs more than $2,000 a month to keep him there, the couple’s nest egg, constructed from a lifetime of savings, will be just enough to cover his expenses—and hers.

At least that’s what her financial advisor told her earlier this year. Now, however, he’s not so sure. Mrs. Nelson has gotten hooked on what she calls “playing sweepstakes games” and what he refers to as “gambling.” But Postal Inspectors, who comprise the federal law enforcement branch of the U.S. Postal Service, have another name for it: telemarketing fraud. They’re working to find and arrest the unscrupulous fraudsters who used illegal come-ons to swindle Mrs. Nelson and other elderly citizens like her out of their life savings.

Postal Inspector Mike Ellis of the Postal Inspection Service’s Oklahoma City office interviewed Mrs. Nelson after Bert Mackie, vice chairman of Security National Bank in Enid and a former member of the U.S. Postal Service Board of Governors, asked Postal Inspectors for advice.

“We need to raise awareness of the problem,” said Mackie, “because if these illegal operators found the Nelsons in Enid, they’ll find victims to target in other towns.”

Just Too Good to be True

Inspector Ellis’ specialty is mail fraud, and the story he heard from Mrs. Nelson is one he’s heard far too many times.

“The promoters typically set up phone rooms, called boiler rooms, where they run crooked lotteries and sweepstakes schemes that ‘guarantee’ you’re a winner—for a fee. And that’s illegal. Elderly people, who may be more gullible and hungry for attention, are their victims of choice,” said Ellis. He listened as several bank officials, as well as Mrs. Nelson herself, told him about the Enid scam.

Mrs. Nelson (who asked that her real name not be used) began receiving sweepstakes offers in the mail shortly after her husband entered the nursing home.

“They’d tell me I won and that all I had to do was send in $50 and I’d get free prizes, so I kept playing,” she said. “They’d call me, too, and they were very nice on the phone.”

Pretty soon, Mrs. Nelson was getting two or three calls a day and a grocery sack full of mail each week—news of “prizes” she had “won,” but could collect only by sending anywhere from $50 to $2,000 by overnight mail. One day she asked a bank employee how she could send a large amount of cash through the mail. When the clerk heard what it was for, she examined Mrs. Nelson’s account transactions and found the elderly woman was writing as many as 90 checks a month to participate in sweepstakes games offering “free prizes.”

“Mrs. Nelson is a very trusting person, and I think she’s lonely now that her husband is no longer at home. She likes the attention she gets from this,” the bank clerk noted.

Things came to a head when the clerk noticed Mrs. Nelson sitting in the bank parking lot for several hours one day last May and went out to ask her what was up. It turned out that Mrs. Nelson had been told by an Atlanta firm that she was the lucky winner of $1 million—if she would pay a fee of $5,000. But Mrs. Nelson had wised up. She told the bank employee she wouldn’t give them her money until they gave her the $1 million. Someone named Sarah had assured her they would be flying to Enid that day to make the exchange. Needless to say, Sarah never showed, although Inspector Ellis had no doubt the Atlanta firm would be contacting Mrs. Nelson again soon.

No Winners in the Fraud Game

Postal Inspectors arrest more than 1,000 suspects each year for fraud conducted via the mail—and the Postal Inspection Service is just one of many federal agencies that target fraud. Although people 60 and older account for 26 percent of all telemarketing fraud victims, 60 percent of people in that age group are victims of prize or sweepstakes fraud.

That number may sound high, but the actual figure is probably even higher. Victims of prize or sweepstakes fraud often never report it to authorities. It can be embarrassing, even humiliating, to admit you’ve been had.

So how can you fight fraud? Learn about the latest scams in circulation—like “guaranteed” prize schemes, easy credit deals, fraudulent work-at-home schemes, mystery shopper scams, and bogus money-making jobs. And get the latest scoop on other fraud schemes on the Postal Inspection Service Web site.

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Quick References

Dialing 4 Dollars

View the Postal Inspection Service online video, Dialing for Dollars, for tips on how to protect yourself from investment fraud.

What’s a Legal Sweepstakes Game?

The Mail Fraud Statute of 1872 makes it a federal crime to use the U.S. Mail to further a scheme to defraud, and the 1994 Omnibus Crime Bill added private carriers to the statute.

Legitimate sweepstakes promotions allow anyone to enter and cannot require a purchase or fee as a condition of playing. “Free prize” promotions that ask for shipping or handling charges, registration fees, taxes, auditor’s expenses, or storage fees are against the law. Any high-pressure sales pitch from telephone callers requiring that you decide to make a purchase or investment right away are pretty sure to be bogus. Especially when they offer to send a private courier to pick up a check.

Some state lotteries and games conducted by certain Indian tribes may use the mail to conduct business, but it is illegal for any foreign lottery to solicit business through the mail.

Stay Safe from Fraud

Postal Inspectors recommend that everyone—regardless of age—take these precautions to themselves from fraud:

  • If you’re unsure about a financial offer, keep a record of it, including all mail and envelopes, and get guarantees in writing before acting on an offer.
  • Don’t give out your credit card or bank account numbers unless you’re sure of who you’re dealing with and what you’ll be getting.
  • Resist high-pressure sales tactics. Insist on time to think and discuss offers with trusted friends, family members, or advisors.
  • Ask the promoter for a call-back number. Respectable companies allow customers time to think about an offer.
  • Report suspicious offers or unsatisfactory transactions conducted by mail via the Postal Inspection Service’s online complaint form or to your nearest Postal Inspection Service office.