FTC Shuts Down Sweepstakes Scam, Offers Refunds

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blogpostpic4-24Recently, at the direction of the Federal Trade Commission (“FTC”), a federal judge shut down a dubious sweepstakes operation that had tricked people into paying a $20 “processing” fee in order to collect a sweepstakes prize, while posing as a governmental agency. A couple of weeks ago (August 8, 2012), the FTC took the additional step of sending out refund checks to over 500 individuals that had fallen victim to this scam.

There are several important lessons to take away from this episode, two of which include: (1)The FTC is engaged in an ongoing effort to crackdown on commercial enterprises that create the false impression that they are affiliated with governmental agencies by using government-related imagery, official sounding language and other indicia; and (2) It is never proper to charge individuals a fee in connection with receiving prizes won in a sweepstakes – and if you are ever presented with such a request, you should recognize it as a scam.

David O. Klein

David O. Klein

David Klein is one of the most recognized attorneys in the telemarketing, technology, Internet marketing, sweepstakes and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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