Consumer Alert: Southern Calif. Victimized By Prize-Winning Scam

POSTED: 12:29 PM PDT Sep 06, 2011    UPDATED: 03:04 AM PDT Aug 01, 2011 
LOS ANGELES -

Southlanders were warned today about a scam in which victims are told they must make a "payment" of several thousand dollars in order to receive hundreds of thousands of dollars in "prize winnings."

"Don't be fooled," said Melissa Arnson of Farmers Insurance Group.

Arnson said people have received what appears to be an official letter that includes a "check" in an amount under $5,000 from Readers Digest and claims the recipient has won $500,000.

"You are asked to cash (the) enclosed check to cover your expenses and then you must call a prize disbursement officer to collect," Arnson said.

"When you call, you will be asked to send a large portion of the check to an address to cover expenses in getting the $500,000 to you," Arnson said. "Don't do it. The check is bogus and will bounce when deposited; and if you send a personal check, money from your bank account will disappear."

The scams have been appearing across the country, with letters and fake Farmers Insurance Group checks, she said. The correspondence refers to the "UK & North America Consumer Promotions Draw."

Another scam purports to recruit the recipient to become a "mystery shopper," and yet another involves an official-looking notice informing recipients that they have won the "Mega Million Sweepstakes."

"All of these scams are designed to steal your money," Arnson said, adding that the average victim loses $3,000 to $4,000.

People receiving the letters should call the Farmers Security hotline, (323) 932-7171.