Sen. Susan M. Collins, R-ME, urged the U.S. Postal Service yesterday to investigate whether several sweepstakes mailings violate the new law prohibiting deceptive mailings.
Collins, chairwoman of the Permanent Subcommittee on Investigations, authored the Deceptive Mail Prevention and Enforcement Act, S. 335, which was signed into law on Dec. 12, 1999 and took effect on April 12, 2000.
In a letter to Kenneth Weaver, chief of the U.S. Postal Inspection Service, Collins said several sweepstakes mailings that were forwarded to her by an elderly couple in Boothbay, ME, do not appear to comply with the requirement that “no purchase necessary” and “a purchase will not improve an individual's chances of winning” statements appear more clearly and conspicuously than other statements in three places in every mailing.
“I am very concerned that some sweepstakes mailings appear to violate the law Congress passed last year,” Collins said. “I urge the postal service to review these mailings and to take appropriate action against any companies it finds are sending deceptive mailings.”
Collins referred to five mailings that may not be in compliance with the new law. The mailings were sent by several sweepstakes companies, including one that was the subject of the senator's hearings into the deceptive mailing practices of smaller companies.
Collins' subcommittee concluded that these small companies profit not only from their deceptive mailings but also from reselling the names of their customers to other companies, which then inundate the consumer with a new barrage of deceptive sweepstakes mailings.
The companies are the International Prize Fund Administration in Ontario; Winners Research Center, Monsey, NY; Clark and Lewison, Yorktown Heights, NY; Royal Sweepstakes Inc., Nanuet, NY; and Mellon, Astor and Fairweather of New Windsor, NY.
The subcommittee investigation showed that the last three companies were operated in 1999 by Anthony Kasday from Las Vegas. Kasday twice invoked his Fifth Amendment right against self-incrimination during questioning by Collins at a hearing on July 20, 1999.
Collins said some sweepstakes companies, including Time Inc., New York, and Publishers Clearing House, Port Washington, NY, have altered their mailings to comply with consumer protections in the new law. Others, Collins said, appeared to be ignoring the new disclosure requirements.
“The new requirements are intended to eliminate the highly deceptive techniques that have caused countless Americans, many of them elderly, to purchase products that they do not need or want in the mistaken belief it will help them win millions of dollars,” Collins said. “I urge the postal service to take swift action to crack down on any violations that evade the important consumer protections required by law.”
The Deceptive Mail Prevention and Enforcement Act requires sweepstakes mailings to clearly and conspicuously display:
• A statement that no purchase is necessary to enter the contest.
• A statement that a purchase will not improve an individual's chances of winning.
• The sponsor of the sweepstakes and the principal place of business or an address at which the sponsor may be contacted.
• The estimated odds of winning each prize; the quantity, estimated retail value and nature of each prize; and the schedule of any payments made over time.
The new sweepstakes law grants the USPS subpoena authority, nationwide stop mail authority, and the ability to impose civil penalties for the first offense of up to $1 million, depending on the number of mailings and the seriousness of the violation.