When a retailer, restaurant, or other public-facing company goes bankrupt, there are all sorts of ways for scammers to take advantage of potential customers.
In some cases, they set up fake websites designed to look like the retailer that’s going out of business. When that happens, people pay for items that don’t exist and will never get sent to them.
Related: Key toilet paper brand files Chapter 11 bankruptcy
There are also situations when scammers will do things like sell gift cards at a discount after the retailer has stopped accepting gift cards. That leaves the consumer having paid money for something that has no value.
If that happens, the company doing the liquidation sale, which is usually not the original retailer will not be sympathetic. It’s up to the consumer to protect themselves from scams like these.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter💰💵
In theory, there are government agencies that are also supposed to help. Some of those agencies have lost a lot of workers under President Donald Trump’s effort to cut the federal payroll.
There are, however, still people working around the country, trying to protect American citizens. One of these groups, the Better Business Bureau (BBB) has recently issued a warning related to one very well-known company that has filed for Chapter 11 bankruptcy.
Publisher’s Clearing House is famous for its sweepstakes.
Image Source: Getty Images
Publisher’s Clearing House has not shut down
Publisher’s Clearing House has long used a simple model. It sells magazine subscriptions at a discount price and gives people a chance to win large cash and other prizes.
It’s one of those things that seems too good to be true, that actually was true. If you entered, you really did have a chance to win. That got a lot of people subscribing to magazines, which was generally good for that industry.
The magazine industry, of course, has shrunk quite a bit. Many magazines have moved to online-only distribution, and even if they do charge a subscription fee, there’s no real room for Publisher’s Clearing House in that model.
That has contributed to Publisher’s Clearing House’s recent Chapter 11 bankruptcy filing. The company, however is not (at least for now) going out of business and it plans to continue its annual sweepstakes.
Retail closings:
Iconic retail chain closing nearly 500 storesAnother discount retailer closing over 1,000 storesAnother struggling mall retail chain closing more stores
The Better Business, which is not a government agency, has shared a warning about potential Publisher’s Clearing House scams since its bankruptcy filing.
“Publisher’s Clearing House is a known household name, so this scam goes around every so often. There is still a prize to be won. However, they’re not going to call and say, ‘Hey, you owe me $150, $750,’ whatever the fee is to get this money. If you’ve won something legitimately, you should never have to pay a fee to receive the funds,” Eastern Oklahoma BBB CEO Amie Mitchell told Fox23.
Publisher’s Clearing House shares its own warnings
Publisher’s Clearing House is still offering a $1 million prize, as well as other prizes, despite its Chapter 11 filing. The company is proud of its history of awarding prizes.
“With over $618 million in prizes awarded, Publishers Clearing House could make you our next big winner! Play games, redeem tokens, and enter sweepstakes – all for chances to win real prizes,” the company shared on its website.
The sweepstakes company also has a section on its website that covers scams.
“At PCH, the winning is always free, and you NEVER have to pay to claim a prize. Recognizing the difference between legitimate sweepstakes and other types of offers that may not be legitimate will help you protect yourself and your family If someone contacts you claiming to be from PCH, and tells you that you’ve won a prize — then asks you to send a payment or money card in order to claim the prize — STOP! You have not heard from the real PCH,” it posted.
Related: Popular breakfast chain franchise files for Chapter 11 bankruptcy
The company gets even more explicit with its warning.
“If you are ever contacted by someone claiming to represent PCH, or claiming to be one of our employees, and asked to send or wire money (for any reason whatsoever, including taxes); or send a pre-paid gift card or Green Dot Moneypak card in order to claim a sweepstakes prize — DON’T! It’s a SCAM. If you are sent a check, told it’s a partial prize award, and asked to cash it and send a portion back to claim the full prize award, DON’T. The check is fake, but the SCAM is real,” it added.
Publisher’s Clearing House filed for Chapter 11 bankruptcy protection on April 8. The company has secured financing from Prestige Capital and believes it has the liquidity needed to support operations during the reorganization process.
