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Direct Mail Sweepstakes Alert

On December 13, 1999, President Bill Clinton signed into law the Deceptive Mail Prevention and Enforcement Act, an act that regulates sweepstakes advertised through the mail. The Act imposes a set of restrictions on all materials sent in the U.S. mail that include entry materials for a sweepstakes or any promotion purporting to be a sweepstakes. It exempts newspapers or magazines if the advertisement is either not aimed at an individual or does not ask for a payment or order in connection with the sweepstakes. The Act requires the following:

  • The mailing, the rules, and any order or entry form must disclose in a manner more conspicuous than all other required statements:
    • No purchase is necessary to enter the sweepstakes; and
    • A purchase will not improve an individual's chances of winning the sweepstakes.
  • Elsewhere in the mailing, the materials must disclose:
    • All terms and conditions of the promotion, including the Official Rules and entry procedures; and
    • The sponsor or mailer of the material, and its principal place of business or contact address.
  • The Official Rules must state:
    • Estimated odds of winning;
    • Quantity, estimated retail value and nature of each prize; and
    • The schedule of any payments, if any, made over time.
  • The materials may not make representations that:
    • A person will be disqualified from future sweepstakes for refusing to make a purchase;
    • Entry in the sweepstakes must be submitted with an order or a payment for previous order;
    • Someone is a winner of a prize unless he or she has actually won a prize; or
    • Contradict or qualify the Official Rules or any other mandatory disclosure.
  • A business that mails sweepstakes materials must take steps to ensure that it removes the names and addresses of anyone who so requests from its mailing list.
    • Requests may be written directly to the mailer, or written to the state Attorney General and forwarded to the mailer. The business must keep records of these contacts for 5 years.
    • The business that mails the sweepstakes materials is required to disclose in all mailings a toll-free number or address where requests to be removed from a mailing list may be directed. Upon receipt of a request, the business has 60 days to remove the name from the list. Mailings may not resume to anyone requesting removal from the list through these channels until the business receives notification from the consumer.

The Act imposes similar restrictions on contests of skill. In addition to stating all terms and conditions of a skill contest and the name or address of the sponsor, any mailing announcing a skill contest must include the following:

  • Number of rounds or levels of the contest and the cost to enter each round;
  • That subsequent rounds or levels will be more difficult to solve;
  • Maximum cost to enter all rounds or levels;
  • Estimated number or percentage of entrants who may correctly solve the skill contest, or the number or percentage of entrants who correctly solved the previous three skill contests conducted by the sponsor;
  • Identity or qualifications of any judges;
  • Method used in any judging;
  • Date winners will be determined and the date or process by which prizes will be awarded;
  • Quantity, estimated retail value and nature of each prize; and
  • The schedule of any payments made over time.

Finally, the Act requires that all facsimile checks must carry a statement that the check is not a negotiable instrument and has no cash value.

Penalties for violation of the Act include a national injunction on mailings and fines up to $1 million. If a business continues to send mail to someone who has requested to be removed from a list, the mailer might additionally be subject to a civil suit.

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