Is this a scam?

September 6, 2005 5:21 AM

Is this a scam?
posted by ajbattrick to Home & Garden (15 answers total)

Yes.
posted by furiousxgeorge at 5:29 AM on September 6, 2005

Here's a good rule of thumb.

• Are they offering something for nothing?
• Is it too good to be true?
• Does it appeal to an individuals greed, while making no sense in a real-world economic sense?

If you answer yes to any of the above questions, yes, it's a scam.
posted by jpburns at 5:32 AM on September 6, 2005

A house in my neighborhood was given away in a contest like this years ago.

Sometimes, instead of a lottery, people have an essay contest. A second-hand bookstore a few counties over ran an essay contest, and one was featured in the movie "Spitfire Grill."
posted by amarynth at 5:41 AM on September 6, 2005

I'm not sure how the laws work in the UK, but in the U.S. and Canada you are only allowed to accept an entry fee for a contest if there is an element of skill involved (as per amarynth's essay contests above). Otherwise it is considered a lottery.
posted by dripdripdrop at 5:46 AM on September 6, 2005

I've seen a similar thing before, quite recently, in the UK, and it was genuine. A couple raffled a lovely old oasthouse in Kent (it was beautiful - I wanted it) for £5 an entry, and once they'd raised the asking price they planned to draw a winner. The local news reported on it quite a few times. As I recall they didn't raise the full asking price and gave away the money raised as a prize instead.
posted by corvine at 5:47 AM on September 6, 2005

I'd say probably not. The house is worth (a maximum) of £250k, and they'll collect £300k in entry fees (12000 x £25).

Also, "If we do not reach 12,000 entries by the closing date - 24th November 2005 a cash prize will given to the winner worth 50% of total sales.", so the people running the competition can't lose.

That's not to say that it's a good idea to enter, but as there is a solid business model behind the offer, I'd say it's legit.
posted by quiet at 5:48 AM on September 6, 2005

The way they've set it up they can't fail to profit (admin costs aside), either they get £300,000 for something valued at £250,000 (if indeed it does have that value) or they get less than £300,000 from ticket sales, replace the raffle for the house with a raffle for half the money collected and keep the other half. So it doesn't need to be dishonest. You will need someone with a knowledge of UK gambling law to comment on the legality of the scheme.
What you have to decide is whether it's a decent gamble.
posted by biffa at 5:49 AM on September 6, 2005

Here's the BBC story on the one in Kent. Either that's a bad photo or I remembered it being much nicer than it is!
posted by corvine at 5:50 AM on September 6, 2005

They had a home lottery in my neighborhood when I was a kid. Tickets were $10. The family that won the house was extremely blue collar, which struck me as extremely cool, since the neighborhood was pretty well-to-do.
posted by croutonsupafreak at 6:28 AM on September 6, 2005

Are they offering something for nothing?
Is it too good to be true?
Does it appeal to an individuals greed, while making no sense in a real-world economic sense?

If you answer yes to any of the above questions, yes, it's a scam.

Re Mefi
no
no
no
Thank God I paid five bucks for this. You old buggers got scammed.
posted by mono blanco at 6:42 AM on September 6, 2005

Well, it's not in your economic interest to enter, because there's less then a 1.0 ROI total. In fact, the company doing this is much better off if they don't get the asking price of the house. They get 50% profit, which is ridiculous.

Normaly in a charety raffel, they'll have donated prizes, and there might actualy a more then 1.0 payout, if the charaty dosn't sell enough tickets.

But you're better off taking your ten pounds to the casino and playing poker.
posted by delmoi at 6:52 AM on September 6, 2005

delmoi: your ROI is only less than 1:1 if you assume the essays are chosen at random out of a hat. If, in fact you are a good writer (as most on Metafilter are) you have a better than average chance of being chosen. A very talented writer (essayist?) might have a 10:1 advantage over other people.

So if it's actually for the house, your normal, luck-based odds would be right at 6:5, assuming all 12,000 entries were received. Ie, for every six dollars you put in, your ROI is five dollars. But if you're ten times as giften a writer, that number spikes up to 3:25, or ~ 8 to 1 on your investment. I would expect most people on metafilter to have better odds at this than going down to the casino :-)
posted by Happydaz at 7:42 AM on September 6, 2005

Under English law, it is perfectly legal to try to sell a house in this way. For it to be a legitimate contest, there has to be an element of skill involved somewhere. This contest has an initial multiple choice question, followed by a draw to select finalists, then a 'play-off' involving a further skill or knowledge element.

The initial multiple choice question is very easy. There'd be no point having a too-difficult question because it would deter people. There's no detailed particulars of what the contest between the lucky finalists would involve except that it is 'a quiz' (so no hand-to-hand combat until the last finalist is left standing or anything like that).

Presumably the house has been on the market for a while at £250,000 without any interest, so the sellers are resorting to giving it away in a contest, conditional upon enough people entering it to make it worth their while.

So if you're willing to gamble £25, you might, just might, win a house, or (if not enough people have entered), a cash prize. Or you might get nothing for your £25. That's the nature of a competition.
posted by essexjan at 9:38 AM on September 6, 2005

I think the new Gambling Act changes the skill element slightly so that it could be a lottery (and hence illegal in this case) if, as essexjan points out, the questions are too easy.

The whole thing seems to be a "complex lottery as set out in sub-section 3 of section 14 of the Gambling Act 2005:

(3) An arrangement is a complex lottery if—

(a) persons are required to pay in order to participate in the arrangement,

(b) in the course of the arrangement one or more prizes are allocated to one or more members of a class,

(c) the prizes are allocated by a series of processes, and

(d) the first of those processes relies wholly on chance.

Then the act says that "wholly by chance" includes asking questions that are too easy:

(5) A process which requires persons to exercise skill or judgment or to display knowledge shall be treated for the purposes of this section as relying wholly on chance if-

(a) the requirement cannot reasonably be expected to prevent a significant proportion of persons who participate in the arrangement of which the process forms part from receiving a prize, and

(b) the requirement cannot reasonably be expected to prevent a significant proportion of persons who wish to participate in that arrangement from doing so.
posted by patricio at 10:00 AM on September 6, 2005

They get 50% profit, which is ridiculous.

50/50 draws are hardly rare things.
posted by mendel at 1:30 PM on September 6, 2005