Congratulations! You've just been ripped off

“Once they pick up the money, it’s gone and it’s too late for the consumer,” Perry says.

Something else a lot of people don’t understand; these wire transactions make it easy for a thief to hide from the law. Even though you wire the money to a specific address, it can be picked up anywhere in that country.

The red flags are there
There are plenty of warning signs this prize notice is a scam. The most obvious one: You are required to send money. No legitimate contest ever requires you to buy something or pay any money.

Then there’s the check that comes with the award notice letter. It always has the name of some unrelated company on it – such as a funeral home in North Dakota or a collision shop in California – not Publishers Clearinghouse. Why? The bad guys steal the names and account numbers of real companies to put on their fake checks so they won’t bounce as soon as you deposit them.

And then there’s the strange instruction you get about wiring the money. You’re told not to mention that you’ve won the contest. You’re supposed to say you’re sending money to a friend or relative. That should make warning sirens go off.

Willard Hart, director or fraud at MoneyGram International says this is done to fake out their agents who will question the transaction if you say you’ve won a contest or lottery. “What the bad guys are trying to do is give their victims a set answer to keep the transaction going,” he explains.

Trying to attack the problem
Consumer groups, businesses and government regulators have formed a task force on fake checks. Susan Grant, director of consumer protection at the Consumer Federation of America chairs this task force.

I asked her if she believes the banking industry should do more to protect their customers from these fake check scams. Her response: “Banks clearly need to do more.”

Grant has high praise for West Suburban Bank in the Chicago area. It reduced this check fraud by 85 percent in one year by instituting a simple policy. Every customer who deposits a check for $1,000 or more or withdraws $1,000 or more gets a flyer about fake check scams. “It’s simple and effective,” Grant says.

The bottom line
With the real Publishers Clearinghouse sweepstakes you never have to call to claim your prize. The company notifies you. If you win $10,000 or more – the Prize Patrol makes a surprise visit. If the check is for less than $10,000, it will come via certified mail.

Be smart. Don’t get greedy. Never wire off money to claim a prize. If you do, you’re guaranteed to be a loser.

“Don’t fall for this scam,” warns Lois Zupan, who got burned for nearly $6,000. “Just don’t let them get away with it.”

Also in msnbc.com business Your Career: Think twice before giving the boss a gift Answer Desk’s John Schoen chats about unemployment Answer Desk: Repairing your credit rating Blacks fear path to middle class is blocked   Video: Eight great stocks to play in 2010

MORE FROM CONSUMERMAN

ConsumerMan Section Front

Are holiday lights a hazard? The great rebate debate Clean clothes, stinky problem Fed overdraft rule not enough Chinese drywall a big threat FTC nabs Moneygram ConsumerMan Section Front   Add ConsumerMan headlines to your news reader: