Nebraska lawmakers earlier this week unanimously approved a bill prohibiting prize-promoting mailers and telemarketers from requiring prize-winners to pay a fee before they could receive their prize.
Governor Mike Johanns is expected to sign the measure, Legislative Bill 165, amending the state's Telemarketing and Prize Promotions Act, into law within the next 60 days.
Lawmakers say the measure plugs a loophole in the federal Deceptive Mail Prevention and Enforcement Act (DMPEA), which established minimum national standards for direct mail and telemarketing prize promotions when it went into effect last April 13.
Specifically it prohibits direct marketers and telemarketers that use prize promotions from telling actual and potential prize-winners both by mail and over the phone that they would have to pay a fee of some sort before winning or receiving a prize of any kind.
It also prohibits mailers and telemarketers from misrepresenting the amount, size or value of a prize both in their mailings and telemarketing calls or that the recipient had actually won a prize when he or she had not.
Violators could face civil penalties of up to $2,000 per offense.
Sweepstakes and prize-promoting mailers and telemarketers are required under the DMPEA to state clearly state in both their printed promotional materials and telemarketing calls that no purchase is necessary to win a prize and that a purchase would not enhance a person's chances of winning.
Besides requiring them to maintain do-not-mail and do-not-call lists, the DMPEA also prohibits prize-promoting mailers and telemarketers from implying that their programs are affiliated with or endorsed by any federal or state government agency.
Violators of any provision of the federal law could face civil penalties of up to $1 million for a first offense and double that amount for each subsequent violation.
