Saturday, July 26, 2008

New Study finds 45% of Online Contests to be Fraudulent

The controversial new study has shed light into the un-regulated and often shady business of online contests. According to the research, over 45% of online contests are fraudulent and the prizes are either un-obtainable due to the terms and conditions or there are simply no winners.

There is a growing sub-culture of people worldwide who spend countless hours participating in online contests. There are over 2 million of them in the US alone. The purpose of these fraudulent contests is to get as many people as possible to reveal personal information. These "contestants" then become the targets of con-men or in the worst cases the victims of identity theft.

There are few regulations to protect online contestants and many of these are un-enforceable as scammers typically work out of unregulated safe heavens.

The study founded by did find however that the majority (55%) of online contests are legitimate. Jenny Williams from Albuquerque, New Mexico confirmed; "My husband and I love Internet contests, we have joined hundreds and we have won some pleasant surprises, including two watches, a poker table, a TV and many smaller items. We haven’t won anything big yet, but we enjoy playing."

There are many types of online contests, from writing and photography competitions, to raffles that require an entry fee (sometimes a significant one) to join. Regardless of the variations, almost all online contests are based in developing countries where there is little to no regulation.

Some major factors to watch for when subscribing to an online contest are:

1 - About Us Page; a real company will have an about us page with information on the company.

2 - Contact; there should always be a way to contact the company in question. Larger companies should have an 800 number, as well as live chat and email.

3 - Google Results; if the name of the company is typed into Google, what are the results? Positive or Negative comments? Search Engines can be the voice of the people.

4 - Realistic Prizes; Many scams use excessively large prizes to lure the unsuspecting. A legitimate contest will have a reasonable prize in line with the size of the usually small business that is holding the contest. The old rule should be heeded that, "if it sounds too good to be true, it generally is".

5 - A Proper Web Site; a real company should have a nice web site with a real .com domain. Be wary of anything ending in .info or .biz.

6 - Proper English; an honest company will have the resources to have a properly written site. Poor English should be considered a red flag.

7 - Sensitive Data Requests; data such as social security numbers should never be given out for any contest purposes. Extra caution should be applied to any requests of passport or other document copies, even in the event of a large prize give-away.

If you believe you or anyone else you know has been the subject of a contest scam, please report the suspected company to the FTC at and the Internet Crime Complaint Center at

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