By Philippa Busby BBC Radio 5Live Consumer Affairs Reporter

An estimated �100m is being conned out of British residents each year by foreign prize draw scams, an investigation by BBC Radio Five Live has found.

The government is so concerned about the fraud it is planning an awareness campaign to alert consumers.

Millions of letters arrive through UK letterboxes from abroad each year claiming that the householder has already won a guaranteed prize of either a huge cash sum or a gift like a holiday or a new car.

The scam takes various forms, but in most cases the reader is told they need to send a small administrative fee of between �10 and �35 to release their winnings.

They close down the PO box numbers and disappear quite rapidly

Tony Northcott Trading Standards Institute

Because the sums involved are so small, millions have decided to post the money in the hope of claiming a huge prize.

Their winnings either never arrive or have so many financial strings attached they're essentially worthless.

Hundreds of householders have complained to Trading Standards and to the Office of Fair Trading (OFT), after falling foul of the scam.

The OFT says it knows of 30 different companies targeting the UK from as far afield as Holland, Canada, Austria and the Philippines.

'Crammed' with cheques

The Head of the European Enforcement Team, Michael Hayley, estimates it could be costing Britons �100m a year.

A raid on a PO box in Canada, used by one company involved in the deceit, revealed five boxes crammed with 25,000 cheques and postal orders from the UK, each worth between �12-�14 - making a total haul of �300,000-�350,000.

Melanie Johnson: "Don't send money"

The hoard accounted for just six days' worth of post. Similar enquiries at a PO box in Ireland revealed 2-3,000 letters containing �5 cheques were arriving each day.

One of the difficulties investigators face is that the fraudsters can quickly close down one operation and start up a new one in a different style and with a changed address.

The Royal Mail can shut down Post Office boxes if it is informed they are being used illegally.

The OFT was given new powers in February this year which means it can now take court action against European companies in their home country.

Tony Northcott, of the Trading Standards Institute, told 5Live: "Obviously the more complaints and the more information we have on the size and scale of things the better chance there is of finding an injunction.

"The difficulty is they close down the PO box numbers and disappear quite rapidly so we have to move quite quickly."

The OFT wants consumers to contact them if they've been recent victims to help with their investigations.

Government warning

The government is so concerned at the extent of the fraud it is launching a campaign within the next two months to warn people of the dangers of fake prize draws.

Consumer minister Melanie Johnson MP said: "[Scams] are like a sort of computer virus - they are always breeding and changing.

"What we need to do is make sure that consumers do not send off the money in the first place rather than we come in to enforce it, which inevitably is not the first stage of action and will take a little bit of time."

Not all prize draws are cons.

There are many run by reputable UK companies, but the advice from Trading Standards is only to enter those run by firms you already know about, and never to send money up-front if you are told you have already won a prize.

If you have been the victim of this type of scam and would like to share details of your experience, contact News Online using the form below.

We often get sent these letters through the post claiming we've won thousands of pounds, but we need to send �20 to receive it. If you are that bothered, just write back saying "Please take the �20 out of my winnings." And send it to them.
Martin Burrows, UK

My wife & I were receiving up to 6 of these winner notification letters per day. Admittedly we were fooled by the first two or three but after that they were immediately destroyed. The only item we ever won was an extremely cheap gold ring worth about 50p.
K Fallon, England

As they say: 'A fool and his money are easily parted'. Why are people so gullible???
Darren, US/UK

The public are their own worst enemies - if they didn't send money, there would be no scam

Steve Hall, UK

I used to work for a similar company called the European Lottery Guild, who claimed to purchase tickets in lotteries in other EU countries (at highly inflated and well camouflaged prices). It is not certain whether they actually did but this multi-million dollar operation was funded out of Canada. It officially went bankrupt in 1996 yet still operates as a mail order business from A'dam. The ways in which these were marketed and sold were at best questionable.
Andrew Fuller, Holland

I simply place mine in the recycle bin or if a pre-paid envelope is provided send it back empty.
Mike, UK

My father who died approximately five months ago, appeared to be heavily into these prize draw scams. I do not know how much he spent, but given that five months on somewhere in the region of 10 to 20 such 'offers' arrive in the post everyday I imagine he was a good customer.
Anon, UK

Well, I'm sorry, but if people are gullible enough to fall for a scam where it involves sending money, I believe they deserve all they get. Same goes for people conned into 'purchasing' lottery type tickets from street traders. I agree that these kind of criminals should be punished appropriately, but the public are their own worst enemies in these circumstances, if they didn't send money, there would be no scam.
steve hall, gb