Bill Text: NJ A2402 | 2010-2011 | Regular Session | Introduced
Bill Title: Regulates operation of sweepstakes in New Jersey.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Engrossed - Dead) 2011-03-21 - Received in the Senate, Referred to Senate Commerce Committee [A2402 Detail]
Download: New_Jersey-2010-A2402-Introduced.html
Sponsored by:
Assemblyman JACK CONNERS
District 7 (Burlington and Camden)
SYNOPSIS
Regulates operation of sweepstakes in New Jersey.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the regulation of sweepstakes, supplementing P.L.1960, c.39 (C.56:8-1 et seq.) and repealing section 2 of P.L.1969, c.131.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. The Legislature finds and declares that:
(1) A vast number of sweepstakes are being directed to New Jersey consumers and New Jersey consumers may have paid millions of dollars to purchase goods or services to enter sweepstakes based on representations by the sponsors of those sweepstakes.
(2) Sweepstakes may be targeted to certain vulnerable New Jersey consumers.
(3) There is a compelling need to curtail and prevent the most deceptive practices in connection with the promotion of sweepstakes.
(4) There is a compelling need for more complete disclosure of rules and operation of sweepstakes in which money or other valuable consideration may be solicited.
(5) Preventing the deceptive promotion of sweepstakes is a matter affecting the public interest.
b. It is the intent of the Legislature in enacting this act:
(1) To require that New Jersey consumers are provided with all relevant information necessary to make informed decisions concerning sweepstakes.
(2) To prohibit misleading and deceptive prize promotions.
2. As used in this act:
"Clear and conspicuous" or "clearly and conspicuously" shall mean a statement that, regardless of the medium in which it is made, is presented in such size, color, contrast, duration, location and audibility, compared to the other information with which it is presented, that it is readily apparent and understandable and in language and terms used in accordance with their common or ordinary usage and meaning. If such statement modifies, explains or clarifies other information with which it is presented, it must be presented in close proximity to the information it modifies or clarifies and in a manner that is readily apparent and understandable. Such statement may not contradict or be inconsistent with any other information with which it is presented.
"Consideration" means money or any other thing of value including, but not limited to: making a donation; purchasing goods or services; submitting to a sales presentation; waiving or granting a right merely by entry into the sweepstakes or purported sweepstakes, including granting any person authorization to call a consumer who is on the national do-not-call registry as maintained by the Federal Trade Commission. By way of example, but not limitation, consideration does not include completing and submitting an entry blank obtainable locally, by mail or from the Internet, or to call in an entry by a telephone call in the participant's local calling area or to a toll-free number. Completing publicity or liability releases, eligibility affidavits or assuming liability for federal, state or local taxes also does not constitute consideration.
"Conducting a sweepstakes" means distributing any material in this State that promotes a real or purported sweepstakes, describes the prize or prizes, offers a prize by means of a prize notice, states one or more of the sweepstakes rules, includes any current or future opportunity to enter the sweepstakes, or provides any method for the recipient of the material to obtain additional information about the sweepstakes. It does not include placing a sweepstakes announcement.
"Contest" means a sweepstakes in which winning a prize depends on a combination of chance and the skill of the contestant where the element of chance is predominant.
"No purchase necessary message" means a statement, clearly and conspicuously displayed, that no purchase or payment or any other consideration is required to enter or win the sweepstakes and a payment or purchase or any other consideration will not improve an individual's chances of winning the sweepstakes.
"Official rules" means the formal printed statement of the rules for the sweepstakes.
"Prize" means cash or an item or service of monetary value that is offered or awarded to a person in a real or purported sweepstakes.
"Prize notice" means notification, including, but not limited to, an advertisement appearing in a magazine or newspaper of general circulation, periodical, circular, in-store or out-of-store sign, or other advertisement placed before the consuming public or in any radio broadcast, television broadcast, or electronic medium, that is delivered by the United States Postal Service or by a private carrier, telephone, electronic mail, or other means of communication, intended for a specific recipient or recipients and is or contains a representation that the recipient will receive a prize. A prize notice also includes a notification which requires or invites the individual to make a contact by telephone, Internet or in-person to learn how to receive the prize or to obtain other information related to the notice. Nothing in this section shall be construed to include in the definition of "prize notice" a notice informing the individual that he or she has been awarded a prize solely as a result of his or her entry in a sweepstakes, if the individual is awarded the prize stated in the notice.
"Represent" and "representation" means express statements and the implications and inferences that reasonably would be drawn from those statements, taking into account the context in which the representation is made, including, but not limited to, emphasis, font, size, color, location and presentation of the representation and any qualifying language. If the representation is made on or visible through a mailing envelope, the context in which the representation is to be considered, including any qualifying language, shall be limited to that which is visible without opening the mailing envelope.
"Retail value" means a price at which the sponsor can demonstrate that a substantial number of the prizes or substantially similar items have been sold to the public in this State by someone other than the sponsor during the preceding year.
"Specially selected" means a representation that a person is a winner, a finalist, in first place or tied for first place, or otherwise among a limited group of persons with an enhanced likelihood of receiving a prize.
"Sponsor" means a person who conducts a real or purported sweepstakes or anyone acting on behalf of that person.
"Sweepstakes" means any contest, giveaway, drawing, plan, or other selection process or other enterprise or promotion in which anything of value is awarded to participants by chance or random selection that conforms to the requirements of this act and that is not otherwise regulated or unlawful under other provisions of law. By way of example and not limitation, sweepstakes does not include a contest, giveaway, drawing, plan, or other selection process or other enterprise or promotion authorized by the New Jersey State Lottery Commission, New Jersey Casino Control Commission, New Jersey Racing Commission, or New Jersey Legalized Games of Chance Control Commission.
"Sweepstakes announcement" means a notice of the fact that a sweepstakes is being or will be conducted, appearing in any newspaper, magazine, periodical, circular, in-store or out-of-store sign or other written matter placed before the consuming public, or in any radio broadcast, television broadcast, electronic medium or delivered to or through any computer, which does not contain a device or mechanism for entry into the sweepstakes but directs the consumer to a location, website, address, telephone number or other venue for information about and entry into the sweepstakes. If the announcement is for a sweepstakes involving automatic entry upon the purchase of goods or services, the announcement shall clearly and conspicuously disclose the availability of an alternate means of entry not involving a purchase.
3. a. No sponsor shall conduct a sweepstakes or offer a prize in connection with a real or purported sweepstakes to another person in this State if the: official rules; prize notice; advertising; or offering or soliciting material for the sweepstakes or purported sweepstakes fails to comply with the requirements of this act.
b. No sponsor shall conduct a sweepstakes in which an entrant is required to give any consideration.
c. No sponsor shall conduct a sweepstakes in which a consumer is automatically entered because the consumer purchased goods or services unless the sponsor provides an alternative means of entry not involving a purchase and the announcement and advertising for the sweepstakes clearly and conspicuously discloses the availability of the alternate means of entry and location where details of the alternate method of entry can be found.
d. Any materials used to conduct a sweepstakes shall disclose that to receive a prize offered in the sweepstakes, an entrant shall not be required to furnish any consideration, identifying any type of consideration that anything in the solicitation material suggests, implies or insinuates is required.
4. a. The official rules for a sweepstakes shall contain simple, clear, understandable and easily readable language and shall disclose in writing to each offeree:
(1) The manufacturer's suggested retail price or comparable retail price of each prize offered and, when a prize is a coupon, rebate, or similar instrument redeemable in connection with the purchase of goods or services, a statement that the prize is of no value unless the related goods or services are purchased;
(2) The conditions to be met to receive a prize;
(3) That to enter the sweepstakes and receive a prize, the offeree shall not be required to:
make a purchase or payment or give any other consideration, and that doing so will not improve the offeree's chances of winning.
(4) The exact number of prizes in each category;
(5) Instructions regarding how to receive a list of winners, if a prize with a retail price or monetary value of more than $100 is offered;
(6) Whether each prize will be awarded;
(7) The date when winners will be determined;
(8) The odds of winning each prize, if they can be determined in advance, or that the odds of winning will be determined by the number of entries;
(9) The fact that the person has not yet won;
(10) The true name or names of the sponsor, the address of the sponsor's actual principal place of business, or an address from which the sponsor's business is actually conducted, and the address at which the sponsor may be contacted;
(11) If receipt of a prize is subject to a restriction, a statement that a restriction applies and a description of the restriction;
(12) Any limitations on eligibility;
(13) The deadline for submission of an entry to be eligible to win each prize;
and
(14) If a person has been specially selected, a statement of the odds of winning a prize or a statement of the maximum number of persons in the group of persons with this enhanced likelihood of receiving a prize.
b. Any solicitation material other than the official rules shall contain:
(1) the disclosures required pursuant to paragraphs (3), (10), (12), (13), and (14) of subsection a. of this section;
(2) the disclosures required pursuant to paragraph (2) of subsection a. of this section, except that a description of the particular conditions shall not be required;
(3) the disclosures required pursuant to paragraph (11) of subsection a. of this section, except that a description of any restriction shall not be required;
(4) the statement concerning coupons, rebates or similar instruments redeemable in connection with the purchase of goods and services required pursuant to paragraph (1) of subsection a. of this section, if applicable; and
(5) the official rules or information detailing how the official rules can be obtained.
For the purposes of this subsection, solicitation material shall not include a sweepstakes announcement.
5. a. No sponsor shall require a person to pay money or give any other consideration as a condition of awarding that person a prize, or as a condition of allowing that person to receive, use, compete for, or obtain a prize or information about a prize.
b. Nothing shall be deemed to prohibit a sponsor from requiring as a condition of entry that a person agree to the use of his name and state of residence or, in the case of a contest, the entry submission, in the event that the person wins a prize in the sweepstakes.
6. a. No sponsor shall represent that a person has won or unconditionally will be the winner of a prize or use language that may lead a person to believe he has won a prize, unless the following conditions are met:
(1) The person shall be given the prize without obligation to provide consideration; and
(2) The sponsor shall notify the person at no expense to that person within 15 days of winning the prize.
b. If a sponsor offers one or more items of the same or substantially the same value to all or substantially all of the recipients of a prize notice, the sponsor shall not represent that those items are prizes or that the process by which those items are to be distributed is a sweepstakes, or otherwise represent that the purported sweepstakes process involves a distribution by chance.
7. No sponsor shall:
a. Make any representation that is false, deceptive or misleading;
b. Use in any solicitation material any type, size, location, lighting, illustration, graphic depiction or color resulting in the obscuring of any material fact;
c. Deliver, or cause to be delivered, a prize notice which:
(1) Simulates or falsely represents that it is a document authorized, issued, or approved by any court, official, or agency of the United States or any state or by any lawyer, law firm, financial institution, or insurance or brokerage company;
(2) Creates a false impression as to its source, authorization, or approval;
(3) Creates a false impression as to the method or means of delivery; or
(4) Creates a false impression that it is a check or other negotiable instrument representing a prize or award that may be cashed, deposited or negotiated.
d. Give an advantage to an entry accompanied by an order for goods or services; and
e. Charge any amount for shipping and handling to receive a prize.
8. It shall be an unlawful practice and a violation of P.L.1960, c.39 (C.56:8-1 et seq.) to violate the provisions of this act.
9. The Director of the Division of Consumer Affairs in the Department of Law and Public Safety shall promulgate regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), necessary to effectuate the provisions of this act.
10. Section 2 of P.L.1969, c.131 (C.56:8-2.3) is repealed.
11. This act shall take effect on the 180th day following enactment.
STATEMENT
This bill regulates the operation of sweepstakes in this State by establishing certain guidelines and restrictions on sweepstakes. Currently, the practice of operating sweepstakes is essentially unregulated in this State. Consequently, a vast number of sweepstakes are being directed to New Jersey consumers, some of which may be specifically targeted at vulnerable consumers.
The bill requires solicitation materials for sweepstakes to contain simple, clear, understandable, and easily readable language, including several disclosures. The required disclosures include information about:
· the value of the prizes;
· the odds and conditions necessary to receive a prize, including the number of prizes available and the fact that no purchase is necessary to win;
· the winners;
· the sponsor of the sweepstakes;
· specially selected entries; and
· the official rules.
In addition, the bill also prohibits a sweepstakes sponsor from:
· requiring individuals to pay money as a condition of competing for or winning a prize;
· representing that a person has won or will win a prize, unless the prize will be given without an obligation to provide consideration and that person will be notified, at no personal expense, within 15 days of winning the prize;
· making false, deceptive or misleading representations;
· using solicitation material designed in such a way as to obscure any material facts;
· giving an advantage to an entry accompanied by an order for goods or services;
· delivering, or causing to be delivered, a prize notice which creates a false impression of authorization or it's means of delivery;
· charging any amount for shipping and handling;
· requiring entrants to make a purchase or give some form of consideration; or
· delivering prize notices which create false impressions that they are checks or other negotiable instruments representing prizes.
The bill specifies that violations are unlawful practices under the consumer fraud act. An unlawful practice is punishable by a monetary penalty of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense. In addition, a violation can result in cease and desist orders issued by the Attorney General, the assessment of punitive damages and the awarding of treble damages and costs to the injured party.
