Sweepstakes Clearinghouse mail-outs raise red flags with BBB

sweepstakes clearinghouse 231x300 Sweepstakes Clearinghouse mail outs raise red flags with BBBWinning a lottery or sweepstakes is highly improbable. According to The Huffington Post, the odd of winning the Powerball Lottery is 1 in over 175 million, making National Geographic’s long odds of being struck by lightning in the U.S., 1 in 700,000, much more likely.

But one company is playing on this realization by sending out sweepstakes “consolation prizes” to sell consumers goods at seemingly inflated prices using vouchers.

The sweepstakes scam actually has nothing to do with a sweepstakes, real or imagined.

Consumers have recently begun receiving “Prize Award Directive” letters from Dallas-based Sweepstakes Clearinghouse, claiming the recipients have been awarded a “Consolation Prize” in their $10 million sweepstakes giveaway.

The letter also includes several brightly colored $400 “check” look-alikes are actually credit vouchers that consumers can use to order merchandise from the enclosed catalog.

The backs of the vouchers read “This is a free giveaway promotion and not part of a contest or sweepstakes,” which means the consumer is not even entered to win the $10 million sweepstakes mentioned in the cover letter.

Each voucher is for a different item in the catalog, and lists he amount owed by the consumer beyond the value of the voucher for the item. Prices range from $89.95 for a collection of cookware (pots) and a Cuisinart food processor to $279.95 for a desktop computer.

According to BBB files, the merchandise has also been found to be, at times, priced higher than the same items offered in retail stores of the same quality.

Records show that Allied Marketing Group Inc., the parent company of Sweepstakes Clearinghouse, has an “F” rating, the lowest issued.

Factors that lowered Allied Marketing Group, Inc.’s rating include 270 complaints filed against business; failure to respond to 53 complaints filed against business; three complaints filed against business that were not resolved; the length of time the business has taken to resolve complaints and the company failed to resolve underlying cause(s) of a pattern of complaints.

BBB also offers the following tips to avoid this and similar scams:

Find out what the shipping and handling charges are before ordering merchandise.

  • When considering layaway, make sure you understand the company’s policies on refunds.
  • Shop around before you order an item. Make sure the quoted retail value of the merchandise is actually representative of retail prices elsewhere.
  • When considering the purchase of electronic products such as computers or camcorders, find out whether the product is new or reconditioned.

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About Sharane Gott

Sharane A. Gott is the President/CEO of the BBB of Acadiana in Lafayette, LA. She is a certified mediator and has served on the Council of the CBBB Board of Directors, Bureau Operation Committee, as well as many other national committees over her 27 years with the BBB.