Vulnerable consumers are losing up to �100m a year from postal scams, which offer bogus prize draws and competitions.

We all need to be a lot more cynical about these so-called prize draws

Consumer Minister Melanie Johnson

The Department of Trade and Industry is urging people to be wary of these letters.

It is estimated that some homes are receiving as many as 50 letters a month, which promise huge prizes once payment is received to cover administrative costs.

The DTI wants consumers to alert the Office of Fair Trading to suspected scams.

Bogus letters

"Every day thousands of us receive letters telling us we are the 'lucky winners' of a prize draw or competition," said Consumer Minister Melanie Johnson.

"We are told we should send off money or make a purchase to receive a prize but the chances of seeing that money again, let alone the promised reward, are remote."

The letters are often written on official looking paper, and in persuasive language, telling people they're lucky winners and just need to send a cheque to claim their prize.

Such payments, which are sometimes as much as �1,000 are described as administration costs.

The OFT, which investigates the scams, says millions of people respond, believing their prize money will more than cover the cost of the so called administration fee.

But in most cases, their prize money never arrives.

Trading standards officials should be particularly suspicious if the letters have been sent from abroad or if the prize money is in a foreign currency.

Ms Johnson added: "We all need to be a lot more cynical about these so-called prize draws. Remember, if it looks too good to be true, it probably is."

Where can I get help?

Free copies of the DTI leaflets are available at Citizens' Advice Bureaux offices, libraries and post offices.

Copies can also be obtained from DTI publications at 0870 1502500 or at www.dti.gov.uk/publications.

If you think you have been sent a scam and would like to help the Office of Fair Trading, send your suspect mailing to the European Enforcement Team, Office of Fair Trading, Fleetbank House, 2-6 Salisbury Square, London, EC4 8JX.

Alternatively, e-mail: [email protected].

You can also notify your local Trading Standards Department. You can find their number in the phone book under "local authority".

Useful tips on how to avoid being scammed can be found on Ripofftipoff.net (see link on right). There is also a facility for consumers or traders to give details of suspected rogues.