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Sweepstakes and Pyramid Schemes Rob People
You've probably gotten notice in the mail that you're the lucky one million dollar winner but when you read fine print, you find out it's not such a good deal. Both sweepstakes and pyramids schemes are big business in the United States here's how to avoid being the big loser in a scam.
They lose money. That's the big part. "They lose money", says South Dakota State University's Liz Gorham.
Get-rich-quick schemes don't work, and they're often illegal. The federal trade commission estimates that American consumers lose nearly 40 billion dollars every year in scams, and Midwesterners are some of the most susceptible people.
People tend to be generous in the United States. Particularly in South Dakota, we want to give to worthy causes. The second thing is that we tend to be trusting, and the third thing is that we always like to get something for nothing, Larry Long, who works for the South Dakota Attorney General's office.
A pyramid scheme often called a gifting club starts, when someone asks two of their friends for money, and those two friends asks two more of their friends for money, and so on. The problem with this is the money filters to the top and the people at the bottom lose.
"It's when they do not sell a product or a service, and yet they want to build an organization of a lot of people who then go out and solicit others to join the organization", says Gorham.
Long adds, There are a variety of names they go by- 'Friends and Family', 'Dinner Party', 'Women's Alliance for Prosperity', 'The Original Women's Party', 'Christians Helping Christians', 'A Renewal Celebration', 'The Women's Empowerment Network', 'Women Empowering Women'.
Sweepstakes work differently. A legitimate sweepstakes lets you enter for free. An illegal operation requires you to buy junk, charges you processing fees to receive the award, or even requires you to call a 1-900 telephone number, which costs several dollars per minute.
"If it stays on there, no purchase necessary, that's the key word. Three words, 'no purchase necessary', that's what you look for", says Gorham.
If you read the fine print quite often the great prize they promised you, isn't so great after all.
The devil is in the details, says Long. For example, paragraph six in this sweepstakes tells me how to enter without paying the money, and I had to blow it up in order to find it.
Long says," the elderly are most vulnerable to this type of scam, which is why caregivers need to be on the lookout for a lot of magazines, junk prizes or sweepstake forms".
If you do send in sweepstake forms, your name goes on a list and it's shared with other entities, which will send you even more junk mail. Right now, one of the most popular illegal sweepstakes is Canadian, and since it is international, they're hard to prosecute.
Source: BonusGambler.com Editors' Choice
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