Friday, 16 April 2010

The Voice - Consumer's Voice

Dear Consumer’s Voice

A friend of mine has invited me to participate in a certain website that offers to buy lottery tickets worldwide in national lotteries on your behalf, no matter your geographical location -

Tickets are paid for by credit cards. I'm not yet sure whether to take part or not. Please assist in affirming the legality/legitimacy of this organization. Besides does Botswana outlaw purchasing lotteries outside the country? I would like to know if it would be legal to transfer my winnings from outside to Botswana.

Thank you.

Firstly the technical issues. The tax situation. As far as I know you would be liable for tax if you imported any winnings as they would probably be considered "earnings". Bringing money into and out of Botswana is perfectly legal but evading tax is certainly not. However anyone considering moving this sort of money into or out of the country should consult a specialist first.

However, you should face the inevitable. There won't BE any winnings.

I had a look at and frankly I don't trust them. They may be a valid company but the nature of the services they offer is very dubious. They appear to be registered as a company in the UK but their credit card payments are processed in Cyprus which I find strange. Also, do you really trust a company of total strangers buy lottery tickets on your behalf? What guarantee do you have that they really will buy your tickets for you? What guarantee do you have that in the unlikely event that you win anything they’ll tell you rather than just keeping the money for themselves?

Then there is the basic fact about a lottery, indeed about all gambling. The odds are stacked against you. For every Pula you give a lottery, you will, on average, get back less than P1. In some national lotteries the “average return” is only around 50%. That means if you spend P10 you will, on average, probably only get back P5 in winnings. You are just throwing your money away.

Of course we’ve all heard of the lucky people who win a fortune but the probability that you will join this select group is microscopically poor. For instance, the chance of winning the jackpot in the UK lottery is approximately 1 in 14 million. To put this another way, if you bought a UK lottery ticket every week, you would probably win the jackpot once in the next quarter of a million years. Are you prepared to wait that long?

Lotteries are there to make money, whether for a private company or even a state lottery. They stress the jackpot winnings but very rarely actually disclose the average return. That's because the return is negative and they don't want you to know that.

Then there is the added issue of entering a lottery through a third party. If the margins are so small when you enter the lottery yourself they can only be much, MUCH slimmer if you do it through a third party who is taking some of your money. I checked the price of a UK lottery ticket and it is around P11. Buying this ticket through would cost you twice that price. Remember that you probably only get back half of what you invest in a lottery when you do it yourself so you’ll only get a quarter back if you do it through this company.

Remember though that this still assumes you’re going to win something. The chances of that happening are virtually zero. In summary, what are encouraging you to do is throw away three quarters of your money and wait over a hundred thousand years to win the big prize.

Finally, I wonder about the referral from your friend. This particular company rewards people for referring friends. It's not a real recommendation.

I really encourage you NOT to have anything to do with this company or indeed any other online lottery company.

Scams, scams, more scams

If you think you’ve been the victim of a scam please get in touch. We realise it’s embarrassing admitting if you’ve been a victim but if you spread the word you can prevent the same thing happening to your friends, family and neighbours. We promise you complete confidentiality.

So far several scam victims (or near victims) have come forward and told their stories. They all received an email from a total stranger with a bizarre offer to share their fortune. Sometimes it’s a legacy from a millionaire, other times from a corrupt government official, but they all say that if you can help them extract the money from their country they’ll offer you a cut.

Inevitably there comes a time, just before you are due to receive this fictitious money, when you are asked to pay a fee, perhaps a duty, a legal fee or a bribe to a government or bank official in order to get your hands on the cash. Once you’ve paid that money (which of course the scammers keep), they’ll either disappear or will sometimes even demand more and more money until they’ve emptied your wallet.

The good news is that so far everyone who has contacted us has eventually, and before they’ve paid anything, become suspicious and skeptical. Maybe we are a more skeptical nation than scammers realise?

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