While the Deceptive Mail Prevention and Enforcement Act will have its greatest impact on sweepstakes and contest marketers, it will affect all advertisers and marketers that accept orders through the mail. The act, which goes into effect April 13, also gives the U.S. Postal Service power to impose fines on mailers it considers have crossed the line, an authority that used to be left up to the federal courts. The civil penalties aren't cheap either – as much as $1 million for the first offense, depending on the volume of the mailing.
Many of the large sweepstakes marketers voiced their support when Congress passed the act last fall, saying their marketing practices comply with the new standards, but it's not going to be the Publishers Clearing Houses and American Family Publishers that get into trouble this time. It will be the smaller direct mailers that don’t have legal counsel and hold infrequent contests.
The act has specific mandatory-disclosure requirements for sweepstakes promotions. The statements “No purchase is necessary” and “A purchase will not improve one's chances of winning” must be mentioned clearly and conspicuously three times: in the text of the mailing, in the rules and on the entry/order form. Mailers must be careful when including facsimile checks, stating they're “not a negotiable instrument” and they don't “have any cash value.” Also, be wary of using government-style seals, symbols or insignias – even names of federal agencies – to make your piece look more official.
The law doesn't supersede any state laws, so marketers must observe the federal regulations, as well as the laws of all states to which the mailing is sent. It also has a provision that creates a name removal notification system, and separate penalties can be assessed against violators. This portion of the act doesn't take effect until December.
Next week, we'll feature a Views piece by direct marketing advisor Linda A. Goldstein, who has published a legal guide that addresses questions arising from the act.
