Beware of free competitions

(15/01/2009)

With more people than ever taking part in online competitions, it’s clear people are hoping to get lucky during the crunch. But with this hopeful investment comes risk.

Whether it’s billions on a hedge fund, £20 on a competition or a free prize-draw, if you don’t do your homework you are putting yourself at risk. The onus lies with the person making an investment to be prudent and assess all risks before parting with their money or personal details.

“During the recession, there needs to be a realisation that the same rules apply,” says Ivan Imhoff, owner of competition website, Spotit.co.uk. “Competitions are often thought of as misleading,” explains Imhoff. “They are obliged legally to make all terms and conditions clear. More often than not, it’s the consumers that don’t read the small print then call foul. It’s up to you as the investor in a competition or free prize-draw to do your due diligence.”

The allure of a luxury prize teamed with the words ‘your chance to win’ is often enough to push people into paying in excess of £1.50 for a simple phone call or SMS text message to enter. It’s not unusual for these competitions to see millions entries, which can translate into a tidy sum for a prize that was likely to have been worth £15,000 or less.

“Anyone entering a competition should be assessing these factors as a given,” says Imhoff. “You need to look for competitions with limited entry, a data privacy policy and an upfront closing date. It’s also wise to check if there are any third-party companies or partners involved.”

While competitions and free prize-draws do not always involve a financial outlay, the personal data required to enter is still an investment. Most worrying is the data collection or ‘lead generation’ that sees the personal details required to enter the competition being sold for up to £10 to as many as 30 companies who will then bombard you with endless spam emails, junk mail and phone calls.

Free competitions look like something for nothing to consumers who fail to look further than the advertising slogans. Upon entering they are exposing themselves to fierce company marketing – there is often more chance of getting struck by lightning than winning the advertised prize.

How to spot and reduce the risks:
1. Opt for limited-entry competitions – if you can’t find any information about the number of entries so far or the maximum entry limit then it is likely that there simply isn’t one, meaning your chances of winning could be dubiously slim.
2. Be wary of long-running competitions - if you’re looking at a 16-month run before the competition or free prize-draw closes, then the organiser probably plans to make a large profit long before it sends out its prize.
3. Only enter competitions with a clear privacy policy - are your personal details required? The competition may look like it’s completely free to enter, but the real price could be up to 30 companies buying your data to bombard you with marketing.
4. Make sure you are clued up on the prize – the advertised prize is often not the actual prize so have a look at the terms and conditions first.
5. Stick with transparency – the less information you can find about the competition details, the more the organiser probably has to hide.

Related topics:  Data management and data security 

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