How Contests, Giveaway and Lucky Draw Scams Work – Fraud Tactics & Prevention

If you want to win more prizes and stay motivated to winning, you should also avoid becoming a victim of contest and giveaway fraud.

In order to recognize the signs of a contest or competition scam, it's helpful to know the most common goals of scammers. Why do people use contests to defraud people, and what are they trying to accomplish by doing so? Here are some of the most common aims of contest and giveaway scams.

Contests and Giveaway Scams and the Hard Sell

Sometimes, the goal of a contest scam is not to rob you but to put you in a position where it's hard to turn down buying something. This is also a popular tactic used by the scratch-and-win scammers.

Methodology: The most common of these is a so called "win" that you have to pick up at a certain location – oh, and by the way, you need to listen to a 90-minute “presentation” while you're at it. Even worse, the prize may be far less attractive than it sounds at first. For example, a common tactic for this giveaway scam was to tell people that they had won one of five prizes, including a new car and a valuable piece of jewelry. What wasn't mentioned was that the fifth prize (that everyone actually won) was a discount coupon or something else completely worthless.

Signs of Contests Scam: Again, real wins don't have strings attached, including having to listen to sales pitches. Just turn down any of these so-called "prizes."

Contests and Giveaway Scams that Convince You to Give Your Money Away

Outright theft is a common goal of contests scams. In this scenario, the goal of the scam artist is to try to convince you to send them cash under false pretences.

Methodology: Usually, the way this contests scam works is that you are contacted by someone who claims that you won their giveaway or contest, and that all you have to do to receive your prize is to wire them money to cover taxes (or service fees, or shipping, or any number of other illegitimate excuses). They are usually in a big hurry to get you to give them your information, and don't want to give you time to think it over.

Signs of Scam: Legitimate contests do not place strings on their prizes. You won't have to pay taxes to anyone but maybe the IRB, the IRS (USA) or whatever tax agency in your country.

Contests, Competitions and Giveaway Scams to Break Into Your Bank or Credit Card Accounts

Another way to steal from you using contests, promos, and giveaways scams is to convince you to turn over your bank account or credit card information. The thieves can then wipe out your accounts.

Methodology: You are contacted and told that you have won a prize, but that you need to give out your bank account and/or credit card numbers before you can receive your win. Usually they say that they need that information to verify your age, your identity, or that you can afford the taxes.

Signs of Promos Scam: Legitimate contests do not need any form of payment identification. They are not required to check your income, nor do they have any good reason for doing so. Some contests or giveaways sponsors require identity cards, drivers licenses or social security numbers, however; this is a legitimate question to ask before releasing a prize.

Contests and Giveaways Scams and Identity Theft

A very subtle type of contests scam leads to identity theft, where criminals attempt to trick you into giving them enough of your personal information for them to be able to pose as you and to open credit cards, take out loans, and even perpetrate crimes in your name. Find out more about Contest Scams and Identity Theft.

What to Do About Contests, Sweepstakes and Giveaways Scams

Some people are so concerned about contests and giveaways scams that they hesitate to enter contests at all. But here's the thing – most of the time, scammers don't know whether you're a comper/sweeper or not. They'll contact people randomly, sending out hundreds of thousands of letters or emails, hoping to hit the few people who will fall for their tricks.

Avoiding contests, giveaway, competitions and sweepstakes won't help you – but recognizing the warning signs of a contests, give ways, promos, and competitions scam will. Be sophisticated enough to know how to tell legitimate wins from scams and you can safely enjoy entering giveaways and contests.