FTC Bans Sweepstakes Operator from Prize Promotions Business for $11 Million Scam

FTC Bans Sweepstakes Operator from Prize Promotions Business for $11 Million Scam
Image: Pixabay
October 7, 2014

A sweepstakes operator has been banned from the prize promotion business.

Under a settlement with the Federal Trade Commission (FTC), Universal Information Services is banned from conducting any business involving prize promotions. The company and its operators are also ordered to pay $11 million, which will be suspended once one of the defendants turns over the proceeds from the sale of his home.

According to the FTC complaint, Universal Information Services sent personalized mail to consumers – who were usually over the age of 65 - that claimed that they had won a cash prize, usually more than $2 million. In order to collect the price they had to pay a fee of about $20 to $30. Those who paid the fee received nothing in return.

The company scammed about $11 million from victims.

Last year, the FTC charged Universal Information Services defendants with violating federal law in connection with their deceptive prize promotion letters. The court subsequently halted the operation, froze the defendants' assets, and appointed a receiver over the corporate defendants pending resolution of the case.