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Stack of money with inscription and 3D lettering "Giveaway" is illuminated on a dark background by the logo of the Federal Trade Commission
Amerikanischer Anbieter von unseriösen Give Aways und Lotterie Spielen wird von US Behörde Federal Trade Commission wegen unlauteren Methoden zu Entschädigungszahlungen gezwungen. Image: ECC Austria

Compensation for fraudulent "Next Gen" draws

Since 2013, the US company Next Gen Inc. has been active worldwide with various dubious raffles on social media such as Facebook. Mostly older people fell for their alleged prize draws and lotteries. More than 240,000 victims lost money, quite a few of them even large sums of money. As of this week, victims from Austria have the opportunity to get back part of the loss they suffered.

 

Course of the scams

After mainly senior citizens were contacted by advertisers on social media or by email, they paid between $9 and $140 in entry fees for prize competitions with no real chance of winning. Such promotional emails lured, for example, with promises such as "Congratulations, you've won $1,230,946.00." In other cases, simple games of skill were offered without mentioning costs and getting rid of participants in the last round by posing a mathematical problem that was too difficult. Often, participants took part several times before they judged the games to be dubious and realised that there were no prizes. Recommendations ("shares") and mentions ("tagging") of friends on social networks supposedly increased the chances of winning millions. In reality, the operators of Next Gen obtained additional email addresses, to which newsletters with new scam offers were sent out. Supposed lottery participants were then contacted by telemarketers (some from India) and persuaded to pay for worthless or otherwise freely available security software. Alleged security risks from hackers and the feigned danger of emptied accounts through cyberattacks led the victims to make more and more purchases and services that were claimed to come from US authorities or well-known software manufacturers. Some spent thousands of dollars over years on these "services". Next Gen set up business accounts for the telemarketers to maintain the appearance of legitimacy. The damage to about a quarter of a million "customers" is estimated at 110 million since 2013.

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Distribution to aggrieved parties

The sum of the settlement results from 21 million in cash holdings and sold luxury estates, yacht, luxury car and other private property of the company owners Brandes, Graham and Anderson as well as other main defendants. Since Tuesday (19.7.2022), this sum has been available for compensation of affected persons. The special feature is that those affected outside the United States also have a claim to it. The settlement is carried out centrally by the American legal service provider Rust Consulting Inc. Injured parties can get back a percentage, the quota is based on the amount of damage suffered, with a maximum claim of around 8000 €. The FTC has identified more than 500 victims in Austria. 

Rust Consulting, which was commissioned by the FTC, has received old customer contact data through the court case against Next Gen and its business partners. This data is used to write to those affected and to inform them about the financial claim. It is questionable how many victims can actually be reached in this way, as many of these email addresses are certainly outdated. Therefore, it is important for those victims who do not receive a letter to file a claim for compensation themselves.

The money will be paid back to 244,745 people in the USA and Canada by cheque, in the UK by Mastercard debit cards and in 50 other countries by PayPal payment. Austrian victims therefore need a PayPal account. The deadline for cashing cheques or claiming PayPal payments is 17.10.2022. The sent activated Mastercard debit cards with loaded credit are valid for two years.

Formalities - How to apply?

Complete the application before 17 October. Reimbursement is not automatic, you must actively submit the application yourself!

If you are a victim in the Next Gen scam and have not yet received a letter from the FTC-appointed Rust Consulting Inc:

  • Contact the processor by phone or email. The processor Rust Consulting Inc. also offers support in German. Due to the high telephone charges when calling the USA (+1-612-509-2644), it is advisable to send a request by email (admin@NextGenRefund.com).

If you have already received the letter from Rust Consulting Inc:

Beware: There are scammers posing as the FTC. The FTC or the settlement companies it uses never ask for advance payments. Nor do they ever ask for sensitive information such as your national insurance number or bank account details. If someone claims to be from the FTC and asks for money, it's a scam! To set up a PayPal account and receive compensation, all you have to do is provide your name, mobile phone number (because of 2-factor authentication) and an email address.

Austrian Ministry of Social Affairs provides information

The Ministry is not involved in the reimbursement procedure itself. However, the Ministry of Social Affairs is available to answer general questions about the procedure. You can ask your questions by e-mail (konsumentenschutz@sozialministerium.at) or by telephone (01/71100 - 862501 between 9.00 and 15.00).

 

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