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OFT warning on prize draw jewellery: all that glitters is not gold!

128/07    6 September 2007

The OFT is warning consumers to watch out for mailings that promise large cash prizes to induce people to buy catalogue jewellery.

The unsolicited mailings, typically sent in their tens of thousands, give recipients the impression that they have won a large cash prize of up to £100,000. The mailings imply that to receive the prize, or to receive it faster, the consumer should make a purchase from a catalogue for items such as simulated diamond earrings, Goldtone necklaces, zirconia rings and money clips. In fact recipients are only being offered the chance to take part in a prize draw and are likely to 'win' nothing or at best only a low value item. The small print in the mailing often explains that consumers can in fact enter the prize draw for free without making an order.

When consumers make purchases from the catalogues, they may be repeatedly targeted with similar prize draw and sweepstake mailings. In one case an 87-year-old Hereford man, suffering from Alzheimer's disease, spent £54,000 on jewellery and similar items in two years. His family contacted Herefordshire Local Authority Trading Standards Service and have been forced to change his telephone number and redirect mail following a range of repeated unsolicited phone calls and mailings.

Deceptive prize draw and sweepstake mailings cost the UK economy £60million a year, and it is often the vulnerable and elderly who are worst affected.
 
Mike Haley, Head of Consumer Protection at the OFT, said:

'Consumers should think carefully before responding to unsolicited mailings that appear to claim they have won a prize draw or sweepstake. Don't be tempted to buy jewellery or items you don't really want on the back of promises about a large cash prize win. All that glitters is not gold.'

NOTES

1. Interviews with the daughters of the victim who spent £54,000 on jewellery and other items in two years are available from the OFT press office. Pictures of the jewellery and the victim's family are also available.

2. Recent research commissioned by the OFT involving 11,200 interviews estimated that over 3 million UK consumers fall victim to scams every year losing £3.5 billion (an average of around £70 per adult, per annum).

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