Sweepstakes Scam Asks for Donations, Swindles Consumers

sweepstakes junk mail consumerMailboxes nationwide are full of promises for cash prizes, but the IRS and the Better Business Bureau say the only cash that's being spent is by victims.

A Missouri marketing firm, Precision Performance Marketing, sends sweepstakes letters that BBB officials say makes it look like those on the receiving end have "already won cash prizes or were on the brink of winning."The offers don't make any promises, but suggest recipients send a donation to a charity. Unfortunately, most of those donations don't make it to any charitable programs.

In one case, an 84-year-old California woman was offered cash prizes ranging from $6,184 to $7,414, but could only win by returning the forms. The forms state that no donation is required to win

BBB officials say they investigated PPM and say consumers should think twice about donating to seven charities connected to the sweepstakes fundraising outfit. They say IRS records show that many of the charities connected to PPM use most of the money toward fundraising efforts.

"We feel it is critical for donors to know just how much of their contributions are going for a charity's programs and how much is going for overhead expenses like fundraising costs and officials' salaries and benefits," said Michelle L. Corey, the St. Louis BBB president and CEO. "When most of a charity's income is used to pay fundraising costs, consumers have to ask whether that charity is the best place for their money."

Consumer Ally asked PPM to comment on the allegations and is awaiting a response. An update will be posted if they comment.

The charities tied to PPM are:
  • National Cancer Assistance Foundation of Sarasota, Fla.
  • Autism Spectrum Disorder Foundation of Schereville, Ind.
  • Disabled Police Officers Counseling Center of Niceville, Fla.
  • Child Crisis Network of Pompano Beach, Fla.
  • Children with Hairloss of South Rockwood, Mich.
  • Circle of Friends for American Veterans of Falls Church, Va.,
  • Child Watch of North America of Orlando, Fla.

Some charities, like the Disabled Police Officers Counseling Center, spent only 12% of the $562,000 in donations it received on its charitable programs, the BBB investigation found.

Chances are that mailings saying that "you have already won" are misleading. They suggest you learn all you can about the charity before donating, and check with the BBB to see if the charity is accredited.

For more information, look at the BBB investigation here.

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