Sweepstakes Scam Uses Phony Insurance Checks

June 19, 2007

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New Hampshire Insurance Commissioner Roger Sevigny and Attorney General Kelly Ayotte are warning consumers not to cash any sweepstakes checks purporting to be from MMG Insurance Company. They say the bogus checks are part of a sweepstakes scam.

Consumers across the country have reported receiving such checks through the mail. These checks are accompanied by a letter that makes unauthorized use of MMG’s name and logo.

The letter falsely advises that the recipient is the winner of a sweepstakes and encloses a check that appears legitimate. The checks are in fact counterfeit and the use of MMG’s name and logo is unauthorized, the state officials said.

“New Hampshire residents should be suspicious of any unsolicited sweepstakes checks received in the mail. With today’s technology, it is not difficult for a scammer to create documents that appear real. Many people across the country are getting these false checks. We want folks in New Hampshire to be on guard as well,” Ayotte said.

Consumers are often fooled by such checks because their bank will initially cash the check and permit the consumer to withdraw the funds. Often, the consumer is asked to pay a "processing fee" to the scammer before the remainder of the purported funds can be released.

Since the consumer is able to cash the realistic-looking check, the consumer feels that the offer is legitimate and sends the processing fee. Later, when the check does not clear, the bank will demand that the funds be repaid along with any fees associated with the returned check, and the consumer is also unable to recover the false processing fee.

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