Sweepstakes

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No one who plans and operates a promotional sweepstakes wants to litigate over the prizes. But one of the primary reasons an operator wants a set of experienced eyes on a set of Official Rules is to ensure that the operator is covered – just in case there is a dispute with one or more of the contestants. Sometimes, operators cleverly anticipate that an arbitration clause will help to lower the risk of a dispute involving a contest or sweepstakes. And, undoubtedly, there might be situations where arbitration can help the operator lower the risk of costly litigation. But, like many substantive provisions of the promotional contract between an operator of a sweepstakes and a participating consumer, the clever protections you and your attorney put in place are only effective if they are made a part of the contract.
Continue Reading Reliance on sweepstakes official rules to avoid litigation requires publication

The European Union’s General Data Protection Regulation (GDPR) is underway, and companies and organizations around the world are analyzing its effects on how they collect, use, store and disclose data. U.S.-based sponsors of sweepstakes, contests, instant win games and other promotions opening entry to or targeting Europeans need to be mindful of the GDPR rules…

Last week, the FTC filed a lawsuit against Terry Somenzi and International Advisory Services, Inc., among other defendants, for an allegedly fake prize scheme in federal court. According to the FTC’s complaint, the defendants engaged in deceptive acts and practices by targeting thousands of elderly consumers, announcing in a personalized letter that the recipient…

Last week, Pinterest updated its Acceptable Use Policy, which governs its policies for conducting a contest and sweepstakes. Pinterest policy previously:

  • Prohibited brands from running a sweepstakes where each Pin, board, like, or follow represents an entry;
  • Prohibited brands from requiring entrants to Pin from a selection; or
  • Prohibited brands from requiring a minimum number

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It’s not every day that one gets to observe a non-U.S. jurisdiction abandoning frustrating, idiosyncratic requirements on sweepstakes promotions, but – sacré bleu! – we’ve got one to report.

For several years, international marketers have listed France among the jurisdictions included in their international sweepstakes and chance-based promotional games by conforming to certain unique French…

We wanted to share the following best practice tip with our readers who conduct sweepstakes, contests, and other prize-based promotions: When conducting such promotions, we always recommend that our clients have the potential winners execute and return a set of verification documents before confirming them as winners. Generally, this involves having the winner sign an affidavit and release form confirming their eligibility, compliance with the official rules of the promotion, and releasing the sponsor (and their agencies and parents, subsidiaries, and affiliates) from any liability that may arise in connection with the promotion. In addition, if you need to conduct a background check on the potential winners before issuing a prize to them, you should have them complete a form authorizing you (and/or your agencies) to do so prior to obtaining any consumer reports from a consumer reporting agency. Under the federal Fair Credit Reporting Act (FCRA), consumer reporting agencies may only issue consumer reports with a consumer’s consent, or for one of the other delineated permissible purposes. Obtaining a properly executed authorization will not only allow you to conduct your background check more seamlessly, but it will also help to reduce the risk in playing part to a potential FCRA violation, which can result in high statutory penalties.
Continue Reading Get Your Docs in a Row: A Practice Tip for Promotions

In a recent letter to shoe retailer Cole Haan regarding its Wandering Sole Pinterest contest, the Federal Trade Commission (FTC) signaled a major change for promotional contests conducted through social media platforms. In the letter, the FTC determined that the Pinterest contest sponsored by the company was a form of product endorsement, subject to Section 5 of the FTC Act, which requires the disclosure of a material connection between a marketer and an endorser when their relationship is not otherwise apparent from the context of the communication that contains the endorsement.
Continue Reading FTC Has User Generated Content on the Run

In an effort to make administration of promotions on Facebook easier, the social media site released new rules permitting Facebook Page owners to host promotions and giveaways on their Page timelines. While hosting a promotion on a Page timeline is certainly more convenient and likely more cost effective for businesses from an administration standpoint, it does have disadvantages that businesses should keep in mind, such as the inability to require users to agree to Official Rules of the promotion and the inability to collect personal data about participants.
Continue Reading Facebook Relaxes Guidelines for Promotions

There is a fine line between a lawful promotion and illegal gambling. Sweepstakes are legal, while private lotteries are not. Paying entry fees for a skill contest can be legal (depending on the circumstances), while placing bets is generally not. So it is with great interest that we follow gambling laws – of both the federal and state variety – throughout the country (and internationally as well).
Continue Reading Illegal Gambling and Legal Promotions: The Effect of the Recent Poker-Related Decision