Tax preparation service H & R Block entered into an Assurance of Discontinuance with the New York Attorney General regarding its 2006 “Double Your Refund Instant Win Game” and its 2007 “Toss Out Your Bills Instant Win Game.” As part of the settlement for violations of §369-e, General Business Law (and other statutes), H&R Block paid $245,000 in fees and penalties.
This is something of reprise of the enforcement actions against A & P, Tylenol/McNeil Laboratories, and CVS of several years ago initiated by then Attorney General Eliot Spitzer. The H&R Block action represents the first major foray of Attorney General Andrew Cuomo into the promotion marketing arena.
A major theme in the AOD was H&R Block’s failure to clearly and conspicuously disclose in print, television and radio advertising that a purchase was not necessary to participate in the promotions. For the print ad, the Attorney General viewed as unacceptable the inclusion of the “no purchase necessary” disclaimer in a footnote (in much smaller text at the bottom of the ad). The television spot did not provide effective disclosure because the disclaimer appeared on screen for only a few seconds at the end of the commercial and was not complemented verbally. Finally, the radio spot was improper as it sought to add the “no purchase necessary” information at the very end of the commercial by means of “rapid-fire language.”
As part of the AOD, H&R Block agreed to clearly and conspicuously disclose that no purchase is necessary to participate in its (chance) promotions. The Attorney General emphasized this point by including a definition of “clearly and conspicuously” in the AOD:
that the message or statement is expressed in such common words, phrases or expressions, or in such symbolic or graphic form as to be understood without difficulty and is of such size, contrast, color and placement as to be readily noticed and read. A statement that modifies, explains, or clarifies an express offer is not clear and conspicuous if it is obscured by the background against which it appears or by its location in a footnote or a lengthy disclosure of nonmaterial information.
Other cited regulatory violations included H&R Block’s failure to post any information about the promotions at its retail locations; advertising the promotions at its retail locations without posting the Official Rules, which, the Attorney General alleged, resulted in persons not being informed of the non-purchase method of participation; and, H&R Block store personnel only advising consumers as to the purchase method of entry and otherwise providing “wrong or conflicting information.” The absence of information about the promotion at retail was especially significant because the promotion advertising directed consumers to H&R Block stores for information regarding participation without purchase.