California Looking to Crack Down on Sweepstakes Scams

Many people, especially the elderly and other vulnerable members of the community, fall victim to misleading advertisements and gimmicks that claim they "may already be a winner" or they have been "specially selected" to participate in an offer regarding a sweepstakes win, leading them to purchase items that they don't want or need in the hopes of raising their odds. A new bill in front of the California legislature, Bill SB 1400, is looking to crack down on these misleading statements and ensure that people understand that they don't have to make any purchases in order to participate in sweepstakes.

The bill proposes to ensure that people are not intentionally mislead to believe that they have higher chances of winning if they enter. Some of the restrictions would include:

• Advertisements could not say that people have been "specially selected" unless they are really part of a smaller pool of people with increased chances of winning. The "specially selected" group cannot be larger than 25% of the total number of entrants.
• If people are told that they have been "specially selected," they must be informed of how many other people are also part of that restricted group.
• Advertisers cannot state that this is the recipient's final notice, unless they have been contacted before, and unless the statements are accurate.
• Sweepstakes advertisements must include the full rules and the end date of the sweepstakes.
• Advertisements must make it very clear that no payment or purchase is required to win.
• Another important change that the law makes is that it prohibits sponsors from selling the names of their entrants without express permission. This could help stop "sucker lists" where people who fall prey to misleading advertisements are then deluged by other such scams, because their names and contact information were sold to people looking for easy targets.

In the wake of lawsuits against misleading practices by Publishers Clearing House, many states updated their sweepstakes laws, but California sweepstakes legislation has not been substantially changed since it was first introduced in 1998. Bill SB 1400 hopes to clarify misleading advertising practices to better protect people from sweepstakes scams. It has passed the California State Senate, and will go before the Assembly next month.

Related Articles:
Publisher's Clearing House FAQ | Warning Signs of Sweepstakes Scams | Full Text of Bill SB 1400