Fraudulent Global Sweepstakes Repays $25 Million to Consumers

Lori Kalani, Bernard Nash
Cozen O'Connor
Contact
LinkedIn
Facebook
X
Send
Embed

Cozen O'Connor

  • The FTC will disburse $25 million to consumers across the world following its joint-settlement with the Missouri AG to resolve allegations that a network of companies and individuals (collectively “Next-Gen”) operated a fraudulent global sweepstakes program in violation of the FTC Act and Missouri Merchandising Practices Act.
  • According to a 2018 complaint, Next-Gen caused tens of millions of personalized fraudulent sweepstakes and prize mailers to be distributed around the world, scamming consumers out of more than $110 million. According to the FTC, the scam included three types of mailers: the first falsely represented to consumers that they won a substantial cash award in return for payment of a mandatory acquisition fee; the second informed consumers that they could win a substantial cash prize in exchange for answering a simple arithmetic question, when no such case prize existed; and the third promised consumers a cash prize in return for payment of a small fee, but instead enrolled consumers in a sweepstakes newsletter subscription.
  • Under the terms of the stipulated order, Next-Gen is banned from marketing or operating prize programs, but it may conduct a free raffle, drawing, or similar prize giveaway so long as consumers sign up in person. In addition, Next-Gen is subject to annual compliance reporting, and must pay $114.8 million in equitable monetary relief, part of which will be distributed to consumers around the world.  Specifically, the FTC will distribute 221,687 checks totaling $19,180,753 to consumers in the United States and Canada, 3,516 MasterCard debit cards totaling $631,322 to consumers in the United Kingdom, and 19,542 letters to consumers in over 50 additional countries, explaining how they can claim their portion of $4,696,242 in payments through Paypal.
Send Print Report

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Cozen O'Connor | Attorney Advertising

Written by:

Cozen O'Connor
Cozen O'Connor
Contact
more
less

Cozen O'Connor on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign Up Log in
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide