Online Sweepstakes May Be a Full Ride to Marketing U.
Need money for school but don’t want to be saddled with student loans for the next 10 years? A new Web site offers students a chance to win thousands of dollars for college, graduate school and even private elementary or high schools.
But critics say every one of the thousands of people who have who filled out online registration forms on FreeScholarships.com for a chance to win the jackpot have jeopardized their privacy. They say that for a tiny chance at winning the scholarship lottery, participants have given up personal information that is valuable to online businesses.
The Web site may be as gimmicky as a game show, but it is attracting a lot of attention from financially strapped parents and students: A half-million visitors flocked to FreeScholarships.com during the week after it went live on Feb. 3.
To win, a student or parent has to fill out an online registration form, which asks for name, street and e-mail addresses, date of birth and gender. Every time members take surveys, view ads or refer friends, their chances to collect the prize increase.
FreeScholarships.com says its Web site receives about 5 million hits a day — so odds are slim of winning the daily drawing of $10,000, the monthly $25,000 or quarterly $50,000. On April 1, FreeScholarships.com will award its first quarterly prize, and its second monthly prize. Between Feb. 4 and the start of April — including two weeks when the site was down because of overwhelming traffic — 39 registrants will have won daily prizes.
Who wants to be a scholarship winner?
“I’d like the chance to win money. Winning scholarship money is a good idea, and I don’t see any negative consequences to it,” said Corrie Weiss, a freshman at East Carolina University in Greenville, N.C. Though Weiss is planning to check out FreeScholarships.com and other Web sites offering free money, she admits that she doesn’t pay attention to a site’s privacy policies.
But other students are more cautious.
“I would be lured to Web sites that give you a chance to win money for college,” said Jeremy Gussoni, a freshman at Rutgers University in New Brunswick, N.J. “It seems great on the surface — especially with my financial situation — but I am suspicious.”
Gussoni, who’s entered sweepstakes on other Web sites, said he now receives unwanted e-mail every day — some from companies to which he has never given his e-mail address.
“I haven’t read privacy policies in the past, but I will now,” Gussoni said.
There’s always financial aid
Education experts say there are plenty of more reliable ways to finance schooling that don’t require posting personal information on the Web. In fact, students received a total of $64 billion in total financial aid in 1999, the American Council on Education reports.
“You don’t need to be a sweepstakes winner to afford college, but you do need a plan,” said Mark Cannon, deputy director of the National Association for College Admission Counseling.
Financial aid planners say there’s a lot of money out there, most of it provided by state and federal programs and colleges and universities.
“The money is not hidden nor is it a mystery about how to get it,” agreed Jacqueline King, director of federal policy analysis for the council. She said that every year, seven out of 10 full-time college students receive financial aid in grants and loans averaging $7,000 a year.
Financial aid doesn’t stretch far enough, said Bet Alwin, director of marketing communications for FreeScholarship.com.
“A lot of people can’t afford to go to private schools that they would rather attend,” she said. “You’re dealing with large numbers, on the average of about $20,000 a year.”
About half of all recipients of baccalaureate degrees graduate with student loan debt, according to the council. Those attending public colleges and universities typically borrow $12,000; those in private institutions borrow about $14,500.
Should you be concerned about scams?
The Federal Trade Commission (FTC) monitors several hundred college scholarship Web sites, on the lookout for those that charge illegal fees to match students with scholarships for which they may be eligible. According to the FTC, three other red flags should warn consumers away:
A scholarship or a dollar amount is guaranteed
You receive unsolicited e-mail informing you that you have been “selected” by “a national foundation” to receive a scholarship, or that you are a “finalist” in a scholarship sweepstakes or contest you never entered
The Web site promises to “do all the work” for you in applying for the scholarship, or claims that it has access to scholarship money that “you can’t get anywhere else.”
Scholarship sweepstakes pass regulatory muster if they meet three conditions: Winning is based on chance, not merit; there is no fee to enter; and no guarantees of winning are made.
“If such Web sites are upfront about the randomness of the drawing, then the more power to them if there are no deceptive statements about [having to] make a purchase to increase your chance of winning,” said FTC staff attorney Gregory Ashe.
Privacy policies offer some protection
The personal information commonly collected on Web sites is sold or rented to other marketers as a source of revenue, explained Toby Levin, an FTC specialist on Internet advertising.
“Your personal information has value, and you have to check [that] you are getting fair market value [for it],” said David Steer, a spokesman for TRUSTe.org, a nonprofit Internet privacy watchdog group. He said it’s up to the consumer to decide whether the chance to win a scholarship is a fair exchange for divulging your name, address and hobbies.
Alwin agreed: “Really, what our members trade is their time for a chance to win. But time is valuable.”
He also recommends patronizing sites with privacy policies that have been certified by a third party, such as the Better Business Bureau or TRUSTe.
“This way, consumer[s] have reasonable access to the data collected, can change any inaccuracies and have someone to turn to if they believe their privacy has been violated,” Steer said.
Information sold to marketers
“We use the personal information … to track usage, to find out what gets the most attention on the site,” making it easier to attract sponsors and advertisers for the Web site, said Alwin. She added that demographic data from marketing surveys of members’ interests and shopping habits “can be sold to marketers.”
Alwin said that FreeScholarships.com offers members a variety of services, such as information on schools, links to financial aid Web sites and chat rooms.
“Right now, our members spend 12 minutes — twice the average,” Alwin said. “We want to build a loyal membership, keep them interested,” she said.
Such members will be “more attractive to advertisers.”
As long as people know what they’re getting into, FreeScholarship.com and similar Web sites are relatively harmless, said Cannon.
“People need to go into the contest knowing the odds are against them winning … understanding they are being used — and if they still decide to spend their time surfing those sites, why not?”