Bill Seeks to Remove Deceit From Sweepstakes Mailings

The envelope poking out of the mailbox seems to offer great news. “You are a guaranteed winner” of a huge sum of money, it proclaims in large letters.

But somewhere inside, in much smaller print, it becomes clear that you are actually one of thousands vying for the same prize, all of whom have been targeted by the same advertising gimmick.

Every day, thousands of Americans either ignore such mailings or, aware that their chances of winning a jackpot are slim, still respond to the sales pitch. Increasingly, however, such sweepstakes have come under fire for bilking those who fail to read the fine print--largely the old and infirm, experts say. Responding to such concerns, Congress is considering legislation to impose stricter regulations on sweepstakes mailings.

“Far too many American consumers are being taken advantage of by increasingly deceptive marketing ploys,” Sen. Ben Nighthorse Campbell (R-Colo.), the bill’s prime sponsor, said at a recent subcommittee hearing. “These ploys prey upon people’s hopes and dreams.”

Campbell charges that many sweepstakes mailings are deliberately designed to deceive on two fronts--leading recipients to believe they are guaranteed vast amounts of cash or that they are more likely to win such money if they buy the advertised product.

Although Postal Service regulations aim to curb dishonest sweepstakes, Sen. Carl Levin (D-Mich.) said current laws “simply do not go far enough.”

Mailings are legal as long as they have a disclaimer printed somewhere. Typically, this disclaimer is in small type and couched in bureaucratic jargon, Levin said. “That line takes them off the hook--and that’s one of the things we’ve got to change.”

Campbell’s bill--known as the Honesty in Sweepstakes Act--would require a large disclaimer be printed on the front of sweepstakes envelopes, stating that the recipient had not automatically won. The bill also would force marketers to print legibly the recipient’s chances of winning and to state that no purchase was necessary to win. The bill also requires large disclaimers on cashier check look-alikes that are frequently part of such mailings.

Although Campbell’s bill appears to have strong backing, some Capitol Hill observers wonder whether action can be completed on it before Congress adjourns early next month. And questions have been raised about some of the bill’s provisions.

“We should find out in advance whether they’re practicable,” Levin said. At the recent subcommittee hearing, he wondered how the Postal Service would know a mailing had violated new regulations without opening it to check the contents.

Among those expressing doubts about the bill was Bob Barton, an official with the Direct Marketing Assn., to which many sweepstakes marketers belong. He said the large disclaimers called for in the Campbell bill would scare businesses away from using legitimate sweepstakes without curbing fraudulent mailings.

“We are in favor of stronger laws . . . but we also think that there are a lot of laws on the books now, and we can have more vigorous enforcement,” Barton said.

While comprehensive data are unavailable on the victims of dishonest sweepstakes, the elderly tend to be among the most vulnerable, according to Campbell.

Anita O’Riordan of the American Assn. for Retired Persons said that vulnerability springs from the outlook of many seniors. “We’re very trusting of people and authority,” she said. “We grew up in a time when a handshake was as good as a contract.”

Throughout the country, major lawsuits and state laws have been targeting deception in the sweepstakes industry during the last few years.

In one of the largest cases, the Irvine-based Direct American Marketers Inc. declared bankruptcy last year after facing an $8.6-million lawsuit by the state of Missouri, as well as investigations by the Federal Trade Commission and the state of Florida. The company had urged contestants to dial a costly 900 number to determine if they were winners.