Posts Tagged: Prizes

What Prizes Can/Can’t Be Given Away

Some things you may not be able to give as prizes:

– Smokes (MA, MI, VA)
– Gas (NJ, VA)
– Beer (many states)
– Milk (restricted in a number of states)
– iPad (formerly)
– Yankees tickets (because they may contain a no-transfer provision)
– Puppies (most states)

(more…)

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One Whale of a Story $2MM Fishing Contest Prize in Dispute After Failed Polygraph Test

Fishermen(persons?) say that the strongest currents yield the biggest catch.  Or at least I think they say that; I really don’t fish.  But there’s a storm a brewing in Maryland federal court over a disputed $2.8 million first prize in the “world’s largest billfish tournament,” known as the White Marlin Open in Ocean City, Maryland. White Marlin Open, Inc. v. Heasley, No. 1:16-cv-03015 (D. Md.)

Entering anglers had to pay a $1,000 fee to register their boat and winners received a prize based upon the type/size of fish caught and the total entry fees.   Phillip G. Heasley allegedly caught the only qualifying white marlin which would purportedly qualify him for a $2.8 million prize.  Pursuant to the contest rules, the Sponsor could require him to take a polygraph test.  He did.  He was found to have used “countermeasures” to manipulate the examination process.  Ooh, the plot thickens. The boat’s captain and crew were also given polygraph tests which purportedly helped sink Heasley.  Apparently, the claim is that Heasley’s catch report had a catch time of 8:15 a.m. that was written over with a time of 9:05 a.m..  The Official Rules state that anglers cannot fish until after 8:30 a.m.  Waiting to snare the big prize were the other winners.

The Sponsor, after conferring with the three independent judges, determined Heasely was disqualified.  The Sponsor then filed an Interpleader action in Maryland state court (which was later removed to federal court) seeking to deposit the prize money in escrow and let Heasely and the other winners fight it out.  But the Sponsor didn’t stop there.  The Official Rules provided that the Sponsor “shall be entitled to reimbursement for 5 times its costs and fees, including attorneys’ fees, which result from the determination and resolution of the validity of unjustified protests.”  The Sponsor then sought 5x its attorneys’ fees in the lawsuit. (more…)

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“You Are [NOT] a Winner” Consent Order Entered Against Printer/Mailer of Deceptive Prize Notifications

On February 9, 2017, a consent order was entered in favor of the FTC against the general manager of a company engaged to procure printing and mailing of deceptive prize notifications.  The individual got laminated for $800,000 (subject to reduction).

The lesson: anyone involved with deceptive prize/sweepstakes/contests mailings could get in serious trouble.

According to the Complaint, the sponsor, using the aforementioned company, mailed hundreds of thousands of personalized cash prize notifications announcing that the recipients had won a cash prize of $943,543.54.  (NB: maybe a million dollars outright seemed too suspicious?)

Of course, the offer was made to sound juicy: “YOU HAVE WON A CASH PRIZE! … Your name was identified among a tiny percentage of ALL eligible individuals.  The fact that you have won a cash prize must be thrilling and somewhat overwhelming.”

Of course, they targeted the elderly.  Of course, they asked for a “fee” of $25 to collect the prize.  Of course, people complied.  And of course, they didn’t get the cash prize.

Why go after the printer/mailer?  The sponsor gave him the electronic templates of the prize notifications, the outer envelopes and the return envelopes, and instructed him on the quantities to print, who to mail them too, and when to mail them.  (He may have done some editing too.)  He then arranged for the notices to be printed and mailed out.  According to the FTC this was enough to be in on the scheme. (more…)

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2016: The Year in Review

In case you missed it, here are some notable items from 2016 concerning sweepstakes, contests, and related promotional matters:

Influencers, Native Advertising, and Endorsements

2016 kicked off with reaction to the FTC’s new Native Advertising Rules which seek more transparency in sponsored stories/advertising.

In March, in its first enforcement action, the FTC cracked down on Lord & Taylor for paying “influencers” to attract social media attention to its Paisley Asymmetrical Dress.  The FTC issued a number of directives, including making the influencers aware of their participation, and making disclosure of the relationship unavoidable.

In May, the National Advertising Division (NAD), a self-regulatory industry, issued a decision concerning native advertising appearing in People.com under the “Stuff We Love” section.  The NAD determined that disclosure of the sponsorship must be made before you get to the stuff page.

In July, the FTC charged Warner Bros. with making inadequate disclosures in videos of influencers playing a new video game.  The FTC didn’t like that the sponsorship disclosure was in a collapsed box below the video and needed to be in a place where consumers will find it.

In October, in an effort to comply with the FTC Rule, YouTube introduced a new feature allowing visible text on a video for the first few seconds with the label stating “Includes paid promotion”

The take:  Consumers and the FTC don’t particularly like “influencers” or hidden ads, so be conspicuous. (more…)

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U.S.A! U.S.A.! – House Votes to Eliminate the “Victory Tax” on Olympic Prizes

Olympic prize awards are generally taxed like other prizes. Some lawmakers have seen this practice of taxing our Olympians as a “victory tax.” On Thursday (Sept. 22, 2016), the House of Representatives overwhelmingly passed a bill exempting U.S. medal winners from paying taxes on the money they receive from the U.S. Olympic Committee when they earn a medal. U.S. Olympians are paid $25,000 for gold, $15,000 for silver and $10,000 for bronze. A similar bill passed the Senate in July, and President Obama is expected to sign the bill into law. (Just so the bill doesn’t sound too favorable to big-time athletes, winners who earn more than $1 million per year can’t take advantage of the tax break.)

Where does this leave the average Joe or Jane prize winner? “Win a New Car” and you could end up paying a hefty tax before you get behind the wheel. (And no, it’s not a “gift” exempt from taxes.) There are plenty of instances where prize winners simply decline a valuable prize or donate it to charity to avoid paying taxes. “Taxes are responsibility of winners” is rightly in Official Rules, but who really thinks of that when they enter a sweepstakes for a trip of a lifetime? (more…)

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In Honor of the Olympics We Give You the International Sweepstakes Edition

In a twist that would make Alanis Morrisette sing, “Isn’t It Ironic”, last week the New York Times reported that a survivor of an Emirates airline crash landing in Dubai learned days later that he had won $1,000,000 in the Dubai Duty Free Millennium Millionaire Sweepstakes. http://nyti.ms/2bhMxkK

For this Sweepstakes, sponsored by Dubai Duty Free, each passenger that goes through Dubai International Airport can purchase a $278 ticket with a chance to win a $1 million prize. The odds are an incredible 5,000 to 1. (For a state of reference, the odds of winning $1 million in the McDonald’s Money Monopoly Game are roughly 1 in 513,591,720.)

Dubai Duty Free’s “pay to play” sweepstakes seems as foreign to Americans as the Olympic events found only on an Internet feed. Perhaps you didn’t know that goggles are optional in synchronized swimming or that Greco-Roman wrestling forbids holds below the waist or even that it’s “badminton” and not “badmitton”. Whenever you “go global” you need to brush up on international rules, and this is no less important when running a sweepstakes. Therefore, I give you some unusual sweepstakes quirks throughout the world: (more…)

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