Sweepstakes Must Include Warning Inserts, AGs Urge

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State attorneys general announced a plan this week that recommends placing fact sheets inside sweepstakes mailings that would include warnings similar to federally mandated nutrition labels on food.

The "sweepstakes fact" inserts, which were introduced at the annual meeting of the National Association of Attorneys General in Nashville, TN, should say the following: "You have not yet won. Enter for free. Enter as often as you like. Buying won't help you win." The inserts also would include the odds of winning prizes, which they said are no better than 1 in 175 million for the biggest prizes.

"We want the sweepstakes fact insert to be seen quickly by a person opening one of these mailings and for it to be separated from the rest of the clutter," said Indiana Attorney General Jeffrey Modisett, chairman of the 16-member NAAG task force investigating sweepstakes.

The recommendations are part of a report that was written after the task force conducted a public hearing on sweepstakes and prize promotions in February. The task force also suggested that sweepstakes should not:

* Imply that a person is a winner or stands a better position than others to receive sweepstakes prizes.

* Imply that ordering a product increases the chances of winning.

* Use separate entry procedures for people who order products and those who don't.

* Have multiple deadlines for a single contest.

* Use facsimile checks and language designed to communicate government endorsement.

In addition, the task force suggested that consumers should have a simple, free, easy-to-use process to remove their name from a company's mailing list, and that state attorneys general institute a program to educate and train state and local prosecutors and investigators in recognizing, investigating and prosecuting sweepstakes and prize promotions fraud.

"The attorneys general would like the industry to adopt these rules voluntarily -- and if not, then it's something that can be enacted into legislation," said Rich Schneider, a spokesman for Modisett.

In related news, Kirk Walder, a spokesman for the Permanent Subcommittee on Investigations that is led by Sen. Susan Collins (R-ME), who sponsored the Deceptive Mail Prevention and Enforcement Act, said the full Government Affairs Committee will vote on the bill before Congress adjourns for its July 4 recess. Then, the bill will be placed on the Senate floor next month.

Walder also said the subcommittee wants to have another hearing on deceptive sweepstakes before the bill is debated by the full Senate. In addition, Rep. John McHugh (R-NY), chairman of the subcommittee on the postal service, has tentatively scheduled a similar hearing in the House on July 29.

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