FTC: Firms Ran Bogus Sweepstakes Operation
The Federal Trade Commission has charged several Nevada concerns with running a fraudulent sweepstakes operation through personalized direct mail.
The commission is seeking a temporary restraining order, a preliminary injunction, and a freeze of their assets.
The defendants are: National Prize Information Group Corp. (NPIGC), d/b/a Las Vegas Actionable Awards Program, Prize Search Express, Department of Unclaimed Awards, United States Sweepstakes Advisory, United States of America Patriotism Awards, National Bureau of Prize Information, Lapham Vargas and Cornell, Director’s Office, and John Rincon, individually, and as an NPIGC officer.
According to the complaint filed in U.S. District Court in Las Vegas, the defendants violated federal law by sending personalized mail to millions of consumers nationwide, falsely telling them that they have won a substantial cash prize, often said to be worth more than $3 million, even though no prizes were awarded.
Urging consumers to respond immediately by sending $20 in order to receive their prize, some of the mailing pieces described an as-yet “uncollected” but “confirmed prize” in the consumer’s name; some mailers represented that “unawarded money” has been “located and documented” in their name; and others mentioned “Authorization to Disburse” and referred to a “guaranteed cash/prize amount” in the seven-figure range, according to the complaint.
The complaint also alleges that the pieces sometimes contained small print that vaguely referred to a “newsletter” produced by the defendants, but did not expressly inform the recipients that they had not won a prize. Instead of prizes, some consumers received information about how to enter sweepstakes, and some consumers received more mailers soliciting more money and suggesting that the consumers had won other prizes.
The FTC charged the firms with violating Section 5 of the FTC Act, seeking a temporary restraining order, a preliminary injunction, and a freeze of their assets.
The action was brought with assistance from the Las Vegas office of the U.S. Postal Inspection Service and the Better Business Bureau of Southern Nevada.
