A reader entered a sweepstakes sponsored by a company called Barclay's of London Jewelry and won a Rolex watch. In order to receive the watch, the reader had to send the company $28.18.

The reader sent the money and received the watch six months later. "It was not a Rolex but a cheap Chinese watch," wrote the reader.She sent us a copy of a Better Business Bureau of West Palm Beach, Fla., report on the company, which she thought would enlighten our readers.

According to the BBB report, the company is one of more than 70 businesses operated by American Media Group Inc. (AMGI) and Newsletter Management Corp. in Boca Raton, Fla. The company publishes and manages numerous newsletters covering a variety of investments and other subjects. It also markets merchandise by mailing postcards with the return names of U.S. Sweepstake Service and Warehouse Delivery.

"Many consumers receiving the postcard believe they have won the merchandise when in fact the company is offering the merchandise for sale," says the report.

The report says the company had previously had an unsatisfactory record with the BBB. Complaints against the company alleged failure to deliver merchandise, failure to respond to customer problems and misleading advertisements.

The company has since agreed with the BBB to correct its practices and has acted to satisfy complaints.

Among the legal actions brought against the company:

- The president of the company, in behalf of Barclay Publishing d/b/a Winners Circle entered into an assurance of voluntary compliance with the Florida Department of Legal Affairs in which it agreed to stop promoting the Australian Lottery or any other lotteries. The agreement was not an admission that the company had violated any laws.

- The U.S. Securities & Exchange Commission filed a civil action against the company's president, Newsletter Management and several of its affiliates alleging that the president had touted stocks in his newsletters and publications without telling consumers that he received payments from the companies whose stocks he was pushing. The case is pending.

- Ten states entered cease and desist orders against companies affiliated with AMGI. The states allege that the company sold securities without being licensed as a broker/dealer. The allegations were a response to a newsletter subscription offer in which consumers were promised shares of stock as a bonus gift for subscribing to the newsletter.

It all goes to show that if something sounds too good to be true, it usually is.