Trade Groups Defend Members’ Sweepstakes

Companies that use sweepstakes to market products defended their practices Wednesday, telling a meeting of state attorneys general they would prefer to police themselves.

The attorneys, from 11 states, criticized as inadequate the industry’s efforts to eliminate deceptive gimmicks and fraud that sometimes lure consumers into spending thousands of dollars.

Some suggested banning sweepstakes altogether.

“I, for one, want to find out today if this industry has a conscience,” said Mississippi Atty. Gen. Mike Moore, who was instrumental in getting the tobacco industry into negotiations that eventually led to a landmark settlement with states over health costs.

The National Assn. of Attorneys General is drafting a model state law regulating sweepstakes fraud. Under a new Senate bill, sweepstakes that deceive people into buying products would face up to $2 million in fines.

Representatives of trade groups whose members use sweepstakes say most consumers find them fun, fair and free. Linda Goldstein of the Promotion Marketing Assn. said 80% of entrants don’t buy a product, and only a small percentage don’t understand the rules.

Trade-group guidelines require sweepstakes rules to be clearly stated, said Michael Pashby of the Magazine Publishers of America.

Federal law bars companies from requiring purchases or charging fees to entrants.

But state officials cite the thousands of people who spent money on products they didn’t need.

Among them was Neil Hancock, a Missouri man who died in April, expecting a promised visit from the Prize Patrol.

It never came.

His daughter, Pat Raines of Willard, Mo., said she watched her father spend more than $100,000 on merchandise based on what she called fraudulent promises of prizes.

In Other Consumer News . . .

Tough on debtors: As the number of personal bankruptcies continues to soar, lawmakers of both parties have begun pushing legislation in Congress backed by credit card companies that would make it harder for people to wipe away their debts in Bankruptcy Court.

The House last fall passed similar legislation that would have overhauled the nation’s bankruptcy laws, but it provoked a veto threat from the Clinton administration, which said the measure would be too harsh on debtors. The Senate adjourned without a vote.