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Residents Warned Of Scam Involving Fake Readers Digest ‘Prize Winnings’

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LOS ANGELES (CBS) — Southland residents were warned on Monday about a series of fake letters purporting to award recipients with “prize winnings” of hundreds of thousands of dollars in exchange for a “payment” of up to $4,000.

Officials with Farmers Insurance Group said an official-looking letter claiming the recipient has won $500,000 has been distributed nationwide with a fraudulent “check” in the amount of $5,000 from Readers Digest.

“You are asked to cash (the) enclosed check to cover your expenses and then you must call a prize disbursement officer to collect,” said Melissa Arnson of Farmers Insurance Group.

She said when a recipient calls the listed number, he or she will be asked to mail in a payment to cover the expenses of sending the prize money.

“Don’t do it,” said Arnson. “The check is bogus and will bounce when deposited; and if you send a personal check, money from your bank account will disappear.”

The scams have been appearing across the country, with letters and fake Farmers Insurance Group checks, she said. The correspondence refers to the “UK & North America Consumer Promotions Draw.”

Another scam purports to recruit the recipient to become a “mystery shopper,” and yet another involves an official-looking notice informing recipients that they have won the “Mega Million Sweepstakes.”

“All of these scams are designed to steal your money,” Arnson said, adding that the average victim loses $3,000 to $4,000.

People receiving the letters should call the Farmers Security hotline at (323) 932-7171.

(©2011 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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