Offering prize promotions and sweepstakes can be a fun and creative way to engage consumers. But it is important to note that sweepstakes and prize promotions are a heavily regulated marketing practice at both the federal and state levels. Your company should not engage in sweepstakes or prize promotional offers until you have consulted with legal counsel and have checked with the Attorney General’s Office in the state(s) in which you plan to advertise. There are a myriad of state laws that are in some instances more restrictive then federal laws.
The information provided below is for your background and overall guidance and should not be considered as legal advice for your specific needs.
The Deceptive Mail Prevention and Enforcement Act governs sweepstake promotional mailings. This federal law requires mailings to clearly state that no purchase is necessary to enter a contest and that a purchase does not improve your chances of winning, among other rules and requirements. Therefore, any legitimate organization running a lottery or prize promotion would never ask consumers to submit a payment to receive their prize or award. Companies are also not permitted to send promotional mailings that appear to be coming from the government such as displaying a government logo or seal.
There is an uptick in scammers posing as a familiar Brand or government agency. These imposters try to get money from unsuspecting consumers by running illegal sweepstakes and prize promotions and trading on the good reputation of known names (i.e., Publishers Clearing House, Reader’s Digest, American Express, Oprah, Ellen, IRS, or Federal Trade Commission to name just a few). Scammers will call, mail, email or post a fake profile on Facebook asking for money from consumers to “win” their grand prize.
Tips: If you find that your brand is a victim of this imposter scam, then please report this practice to the appropriate authorities:
Many unethical companies prey and target the elderly with fraudulent and deceptive sweepstakes and prize promotions. Many elderly consumers have limited financial resources and can suffer from memory issues and dementia. The US Postal Inspection Service has a good fact sheet on this issue for people of all ages, please view its side-bar for special tips and resources.
If a consumer asks to be removed from your mailing list then you should add them to your internal suppression file. It is not appropriate to refer consumers to DMA in situations where the consumer is requesting name suppression from your organization and from those that you share or rent lists to. When companies refer consumers to DMA, they often think that we are the list source and that the DMA can remove them from individual company files.
The Data & Marketing Association encourages all marketers to adhere to its self-regulatory Guidelines for Ethical Business Practice and its Commitment to Consumer Choice (CCC) program. This includes promptly honoring individual opt-out requests, whether the individual is a customer or prospective customer. Our guidelines require that you keep a list of consumers who have asked not to hear from you and remove them from your in-house mailing lists and list you may rent or share.
Certainly, if a consumer would like to be removed from multiple lists, not including your own organization’s mailing list, then these consumers can be referred to the DMA’s mail preference service: www.dmachoice.org. However, DMAChoice should not be used in lieu of maintaining an internal suppression file. For more information about DMAChoice, please visit our solution provider.
We ask that you make sure your front-line customer service representatives are properly trained on how to handle name removal requests.
DMA requires its members to follow the DMA Guidelines on Ethical Business Practice. We have highlighted the following Articles which specifically apply to sweepstakes and contest promotions: