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DMA: Data and Marketing Association
Consumer Help

DMA Guidance for Marketers on Sweepstakes & Prize Promotions

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.

Number One Rule: No purchase necessary to win!

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.

Tips:

  • Remember — no purchase necessary to enter or “win” your prize promotion. Do not charge consumers to enter a contest or imply that it increases their chances for winning a contest.
  • Don’t request payment from a consumer via check, money transfer/wire, or credit/debit card.
  • Don’t ask consumers to provide sensitive personal information such as Passport, Social Security or Driver’s License numbers or bank account information.
  • Don’t use seals that look like it’s coming from the government.
  • Don’t put in small, fine print pre-requisites or conditions for winning. Make the offer clear, easy to understand and read.
  • Don’t promise a prize and then not deliver on the promise. The DMA has reviewed some questionable promotions where it appears that the consumer has won the prize by having matched “winning” numbers but then they go to claim their prize and it’s not available or there were hidden conditions for getting the prize.

Be Cautious: Watch for Imposters!

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:

Don’t Target the Elderly:

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: https://postalinspectors.uspis.gov/radDocs/victim.htm.

How Should You Handle Consumers’ Name Removal Requests?

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 Direct Marketing Association encourages all marketers to adhere to its self-regulatory Guidelines for Ethical Business Practice and its Commitment to Consumer Choice (CCC) program: http://thedma.org/accountability/ethics-and-compliance/. 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 at: https://www.ims-dm.com/mvc/index.php.

We ask that you make sure your front-line customer service representatives are properly trained on how to handle name removal requests.

For more information about sweepstakes promotional rules:

Resources:

What DMA Ethical Guidelines Apply to Sweepstakes Offers?

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:
 
im-grid-linkArticle #1 Honesty & Clarity of the Offer: All offers should be clear, honest and complete so that the consumer may know the exact nature of what is being offered, the price, the terms of payment (including all extra charges) and the commitment involved in the placing of an order.
 
im-grid-linkArticle #2, Accuracy and Consistency: Simple and consistent statements or representations of all the essential points of the offer should appear in the promotional material. The overall impression of an offer should not be contradicted by individual statements, representations, or disclaimers.
 
im-grid-linkArticle #3, Clarity of Representations: Representations which, by their size, placement, duration, or other characteristics are unlikely to be noticed or are difficult to understand should not be used if they are material to the offer.
 
im-grid-linkArticle #4 Actual Conditions: All descriptions, promises and claims of limitation should be in accordance with actual conditions, situations, and circumstances existing at the time of the promotion.
 
im-grid-linkArticle #10 Solicitation in the Guise of an Invoice or Governmental Notification: Offers that are likely to be mistaken for bills, invoices, or notices from public utilities, or governmental agencies should not be used.
 
im-grid-linkArticle #22 Use of the Term “Sweepstakes”: Sweepstakes are promotional devices by which items of value (prizes) are awarded to participants by chance without the promoter’s requiring the participants to render something of value (consideration) to be eligible to participate. The co-existence of all three elements — prize, chance and consideration — in the same promotion constitutes a lottery. It is illegal for any private enterprise to run a lottery without specific governmental authorization.
 
im-grid-linkArticle #23 No Purchase Option: Promotions should clearly state that no purchase is required to win sweepstakes prizes. They should not represent that those who make a purchase or otherwise render consideration with their entry will have a better chance of winning or will be eligible to win more or larger prizes than those who do not make a purchase or otherwise render consideration. The method for entering without ordering should be easy to find, read, and understand. When response devices used only for entering the sweepstakes are provided, they should be as easy to find as those utilized for ordering the product or service.
 
im-grid-linkArticle #24 Chances of Winning: No sweepstakes promotion, or any of its parts, should represent that a recipient or entrant has won a prize or that any entry stands a greater chance of winning a prize than any other entry when this is not the case. Winners should be selected in a manner that ensures fair application of the laws of chance.
 
im-grid-linkArticle #25 Prizes: Sweepstakes prizes should be advertised in a manner that is clear, honest, and complete so that the consumer may know the exact nature of what is being offered. For prizes paid over time, the annual payment schedule and number of years should be clearly disclosed.

  • Photographs, illustrations, artwork, and the situations they represent should be accurate portrayals of the prizes listed in the promotion.
  • No award or prize should be held forth directly or by implication as having substantial monetary value if it is of nominal worth. The value of a non-cash prize should be stated at regular retail value, whether actual cost to the sponsor is greater or less.
  • All prizes should be awarded and delivered without cost to the participant. If there are certain conditions under which a prize or prizes will not be awarded, that fact should be disclosed in a manner that is easy to find, read, and understand.

 
im-grid-linkArticle #61 Laws, Codes and Regulations: There are federal laws that cover fraudulent mailings, as indicated above. Moreover, according to the Deceptive Mail Prevention and Enforcement Act of 1999, government seals should not be used in mail pieces.

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