Sweepstakes-Fraud Bill Clears Senate Committee

Companies offering sweepstakes through the mail would face stiff fines if they mislead consumers into buying their products, under a bill approved Thursday by a Senate committee.

The bill is aimed at stopping deceptive sweepstakes offers designed to induce consumers to spend money on products in the mistaken belief that the purchases will improve their chances of winning, said the bill’s sponsor, Sen. Susan Collins (R-Maine).

The Senate Governmental Affairs Committee approved the bill by voice vote and sent it to the full Senate for a vote. The House has not yet acted on the issue.

The bill would require sweepstakes companies to include language in their mailings that “clearly and conspicuously” states that no purchase is necessary to enter the sweepstakes and that making a purchase will not increase the chances of winning.

It also would require sweepstakes sponsors to include rules and entry procedures in language that is easy to read, understand and find. Consumers would have to be told the odds of winning each prize.

Similar requirements would be imposed on sponsors of contests such as puzzles, games or other competitions that require skill to solve and that may require an entry fee.

Sweepstakes sponsors would have to establish a system allowing consumers to call a toll-free number to learn how to be removed from the sponsors’ mailing lists.

The bill also takes aim at mailed advertisements that look like checks or like mail from a government agency. The bill would require those mailings to include statements that the “checks” have no cash value and are not negotiable or that the mailings have no connection with the government.