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Congratulations -- It's your lucky day! You have won one of the following fabulous prizes: a diamond pendant; a deluxe vacation for two; a food processor; a stereo system; or a six-foot grandfather clock.
If you receive a letter like this, you should be skeptical about the value of your "fabulous" winnings. The prize you win may not be worth the effort to collect it.
What could be wrong with these prizes? You need to see them to understand. The diamond is probably the size of a pin-head. The vacation for two might only be a certificate for inexpensive lodging, which might include so many restrictions as to be worthless. The food processor might be more accurately described as a hand-operated food chopper. The stereo system might be a plastic toy that fits in your hand; and the clock may turn out to be made of cardboard or plastic.
These deceptively-described prizes are sometimes used as an inducement to attract customers to sales meetings for land or for vacation "timesharing" (the use of a vacation home for a limited, pre-planned time). Other times, the promoter may be selling products like a year's supply of vitamins or a water purifier, and using the "prizes" as a way to encourage consumers to call the number listed on the postcard or letter.
The Federal Trade Commission (FTC) and local consumer protection officials have been receiving a growing number of complaints about promotions that use deceptively-advertised prizes. Many of these complaints concern the deceptive way in which the postcard, and then the telemarketers, described the awards. Other consumers are disappointed with the inferior quality and usefulness of the product they were required to buy in order to receive their "award," claiming it cost far more than a similar product bought at a local department store. Many consumers also are upset about the high-pressure sales tactics used during the sales presentations.
The next time you get a computerized "personal" letter telling you it is "your lucky day," keep these points in mind:
* Do not be deceived by letters that look official or urgent. Some contest promoters use names that resemble official organizations, such as the lottery or a parcel delivery service, or use an envelope that looks like it contains a telegram or government check.
* Read the letter carefully. In some cases, the letter may tell you the cash value of each prize or that you must attend a sales seminar as part of the contest. The fine print may be especially informative.
* Think carefully before you attend the sales meeting for the sole purpose of winning an expensive prize. Your chances of winning a truly valuable prize are likely to be very slim. You also may be required to pay a handling charge that is equivalent to the value of your prize. Ask about any such charges before you attend any presentation or pay a charge.
* Be cautious of contest promoters who use "900" numbers. You may call a free "800" number which then directs you to dial a "900" number. You pay for "900" number calls, of course, and the charges may be high.
* Think carefully before sending a check to contest promotion companies. If a company urges you to use delivery systems other than the U.S. Postal Service, such as overnight or courier services, the company may be trying to avoid detection and prosecution by postal authorities.
* Be cautious about disclosing your credit card number over the phone unless you know you are dealing with a reputable company.
* Call your state or local consumer protection office to inquire about the seller's reputation. Be wary of offers that claim to be for a "limited time" only and efforts to make you "buy on the spot." Although some state laws provide cancellation periods under certain circumstances, you should not count on being able to cancel and get your money back unless your right to do so is clearly spelled out in your contract.
* Before signing any contract, make sure you read it carefully. If the salesperson makes claims that are not in the contract, remember it is the contract that counts.
If You Have Complaints
Always try to resolve complaints with the company first. If that does not work and you believe you have been defrauded, contact your local consumer protection agency, state Attorney General, Better Business Bureau, and Call For Action (202/537-0585; TDD 202/537-1551) to report the company.
You also may file a complaint with the FTC by writing to: Correspondence Branch, Federal Trade Commission, Washington, D.C. 20580. Although the FTC generally does not intervene in individual disputes, the information you provide may help to indicate a pattern of possible law violations requiring action by the Commission.
For More Information
The FTC has a series of Facts for Consumers that explain fraudulent sales practices, precautions you can take to avoid becoming a victim, and your rights under federal credit protection laws. These and other brochures are listed in the FTC's Best Sellers for Consumers. To obtain a free copy, write to: Public Reference, Federal Trade Commission, Washington, D.C. 20580.
Facts for Consumers from the Federal Trade Commission in cooperation with Call For Action, Inc., a Washington, D.C.-based international network of radio and television consumer hotlines.
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