FTC Sends Legitimate Redress Checks to Victims --and a Warning of Sweepstakes Scam

There's some good news and bad news coming from the FTC this week. The good news is that victims of the bogus online pharmacy scam will be receiving legitimate redress checks in their mailbox any day. The bad news is; the FTC's name is being used in sweepstakes scam (see below VIDEO). Scammers impersonating the FTC are phoning consumers under the guise they have won a large sweepstakes and in order to collect their prize they need only pay taxes and insurance on their winnings of $250,000.  Here are more details on both;

First the good news;

Victims of Bogus Online Pharmacy Scheme Being Sent Reimbursement Checks This Week on Behalf of FTC

This week, the Federal Trade Commission mailed checks to 19,324 consumers nationwide who were defrauded by marketers accused of running a bogus online pharmacy that sold sham "membership packages" to elderly consumers. Consumers who were victims of this scam will receive a total of $159,000 in redress. These are legitimate checks, and the FTC urges consumers to cash them.

The reimbursement stems from the August 2009 settlement of a case brought as part of "Operation Tele-PHONEY," an FTC-led law enforcement sweep that included more than 180 actions against fraudulent telemarketers, including 13 brought by the FTC. In this case, known as Med Provisions, the FTC alleged that scammers based in Montreal, Canada, called consumers and told them their online pharmacy could save them 30 to 50 percent on their prescription drug costs. Consumers who paid the up-front fee were misled to believe the program came with a 30-day money-back guarantee if they were not satisfied. According to the FTC, consumers who ordered the "discount package" either received nothing or got a prescription card that turned out to be worthless.

The redress checks must be cashed by July 21, 2010. Consumers should call 1-877-789-9497 with any questions.

The FTC never requires the payment of money up front, or the provision of additional information, before consumers cash redress checks issued to them.

The bad news: Phony Sweepstakes Scam

"Hi, I'm calling from the Federal Trade Commission to tell you that you have won $250,000..."

Someone who claims to work for the Federal Trade Commission calls to inform you that you have won a lottery or sweepstakes. To receive the prize, all you have to do is pay the taxes and insurance. The caller asks you to wire money or send a check for an amount between $1,000 and $10,000. What should you do? Don't send money or account information, and immediately report the incident to the real Federal Trade Commission (FTC).

The FTC is the nation's consumer protection agency. It investigates fraud and provides free information, but it never collects money directly from consumers. FTC staffers don't have any involvement with this sweepstakes scam, but they do want you to avoid it.

The caller might suggest that the FTC is supervising the giveaway. He or she might even use the name of a real FTC employee. Your Caller ID might display the Federal Trade Commission's name or a Washington, DC area code. Don't be surprised if you receive repeated calls and follow-up faxes.

No matter how convincing the impersonation, you should never send money to claim a prize. No FTC employee will ever call to ask you to send money. Legitimate sweepstakes companies won't either. Many older consumers and their families have reported this kind of scam, but anyone could be contacted.

Keep from falling for the lure of sweepstakes scams by taking a few precautions:

• Don't pay to collect sweepstakes winnings. If you have to pay to collect your winnings, you haven't won anything. Legitimate sweepstakes don't require you to pay "insurance," "taxes," or "shipping and handling charges" to collect your prize.

• Hold on to your money. Scammers pressure people to wire money through commercial money transfer companies like Western Union because wiring money is the same as sending cash. If you discover you've been scammed, the money's gone, and there's very little chance of recovery. Likewise, resist any push to send a check or money order by overnight delivery or courier. Con artists recommend these services, so they can get your money before you realize you've been cheated.

• Look-alikes aren't the real thing. It's illegal for any promoter to lie about an affiliation with -- or an endorsement by -- a government agency or any other well-known organization. Disreputable companies sometimes use a variation of an official or nationally recognized name to try to confuse you and give you confidence in their offers. Insurance companies, including Lloyd's of London, do not insure delivery of sweepstakes winnings.

• Phone numbers can deceive. Some con artists use Internet technology to call you. It allows them to disguise their area code: although it may look like they're calling from Washington, DC, or your local area, they could be calling from anywhere in the world.

• File a complaint with the FTC. If you receive a call from someone who claims to be a representative of the government trying to arrange for you to collect supposed sweepstakes winnings, file a complaint at ftc.gov or call 1-877-FTC-HELP. Your complaint will be most useful to enforcement officials if you include the date and time of the call, the name or phone number of the organization that called you, the FTC employee name that was used, the prize amount, the amount of money requested, the payment method, and any other details.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them.

To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's Web site provides free information on a variety of consumer topics.