The Sweep of Sweeps

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Congress is in a mood to pass some bills this year that truly will affect how direct marketers go about their business. Besides Rep. John McHugh's reform of the U.S. Postal Service, there's legislation that would regulate e-mail marketing, privacy and sweepstakes marketing. The main concern with sweepstakes is the Deceptive Mailings Prevention and Enforcement Act, which is expected to pass the Senate next month and move onto the House, where McHugh has said he will conduct hearings on the issue.

The National Association of Attorneys General added fuel to the fire last week when its members recommended several ideas of their own (see story, page 1). If sweepstakes marketers don't voluntarily adopt the recommendations, they will ask their state legislatures to enact them. Among the items: warning inserts that would say something to the effect of, "You have not yet won. Enter for free. Enter as often as you like. Buying won't help you win." The attorneys general also want the sweepstakes to stop suggesting that a person is a winner and using separate entry procedures for those who order products and those who don't.

States have brought a number of lawsuits against sweepstakes companies in recent months. American Family Publishers agreed to pay $4 million to Florida, Indiana, West Virginia and South Carolina a few weeks ago to settle charges of deceptive sales practices -- though it acknowledged no wrongdoing in the deal.

The focus is taking its toll on magazine circulation. According to published reports, some magazines have seen their subscription rates drop by as much as 70 percent. Still, it remains to be seen if stricter guidelines would elevate those numbers even more or if they will subside once the government's attention moves onto something else. If legislation forces marketers to radically change their business structure, magazine publishers will have to look for other ways to reach consumers. Clearly, Ed ("You're a winner") McMahon won't be enough here.

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