Cohen Silverman Rowan LLP Providing Cousel for promotional and marketing legal issues
Direct Mail Issues – Sweepstakes and Contests

FEDERAL

Under the federal statute, if a direct mail piece contains entry materials or any opportunity to enter the sweepstakes, then the direct mail piece must contain the full official rules, various disclosures, including the full no purchase statement, and the notification/opt out provisions which apply to ANY direct mail piece that references a sweepstakes or contest.

Disclosure must appear in the rules, on the entry/order form and in the solicitation materials. The disclosure must read as follows: NO PURCHASE NECESSARY. PURCHASE WILL NOT INCREASE YOUR CHANCES OF WINNING.

A sample opt out statement, which must be clearly and conspicuously disclosed, may read as follows: If you do not wish to receive and would like to be removed from subsequent mailings regarding sweepstakes or contests sponsored by Sponsor, contact us at [TOLL-FREE number] OR [name and mailing address of sponsor].

The sponsor must, of course, have a system set up to ensure that no subsequent mailings regarding a sweepstakes are sent to the customers who opt out, or fines may be imposed. In addition, customers who opt out have to affirmatively notify the sponsor of their desire to opt back in. (There are also prohibitions against selling/using/providing their names to third parties.)

If there are no entry materials, in order to satisfy the federal statutory obligations, include abbreviated rules and the notification/opt out provisions.

The federal disclosure requirements do not apply to promotions sent via direct mail in magazines, newspapers, or other periodicals if: (i) the materials are not sent to a named individual, or (ii) they do not include an opportunity to make a payment or order a product or service.

STATE

Even if there are no entry materials, COLORADO state law mandates full official rules in direct mail pieces which advertise a sweepstakes or contest in which there is an opportunity to make a payment or order a product or service. In addition, the federal notification/opt out provision will still be required.

Colorado also requires a Consumer Disclosure statement in the full official rules. A sample such statement, may read:

Consumer Disclosure. No Purchase of any kind is necessary to enter or win this sweepstakes. You have not yet won. Grand Prize: [brief description]; (ARV)$XXXX. There is 1 prize out of # prize notices distributed. Odds of winning depend on the number of entries received. Entries must be received by [deadline]. Sponsor is: [list Sponsor's name, address of its actual principal place of business, and address where sponsor may be contacted, if different].

Note: The first sentence (Consumer Disclosure) must appear in at least 12 point, bold-faced type. The second sentence must appear in at least 10 point, bold-face type. The rest of the paragraph must be in at least 10 point type.