Live From Chicago: No Word From Texas — Yet

If you’re wondering whether the Direct Marketing Association has heard from the Lone Star state about the Texas letter, they haven’t.

“Not yet,” Jerry Cerasale, the DMA’s senior vice president of government affairs said yesterday at a forum for list professionals at the annual conference.

In the meantime, list managers are removing names with Texas addresses from files. And brokers are encouraging sweeps mailers to omit Texas for fear they could be held liable for huge fines if a new complex sweeps law is violated.

Reader’s Digest has taken precautions when mailing sweeps offers into Texas. In its mail drop at the end of this month, it began mailing separate sweeps offers to the state, all with prizes valued under $50,000, Diane Silverman, director of list sales for Reader’s Digest said yesterday. The law does not apply if the most valuable prize to be awarded is less than $50,000.

Another attendee said he had pulled all Texas names from his managed files.

The Texas AG, John Cornyn, is very opposed to sweepstakes offers and hopes to rid them from the state, said Cerasale. “He thinks they’re always misleading and that they dupe the elderly of Texas,” he said.

Cerasale added that Cornyn may be getting his wish in part as list professionals and mailers avoid the state and remove names from files.

“In some ways this letter has been successful,” he said. “He has put the chill into the [list community].”

The rift began when a letter from the AG’s office arrived warning “list brokers and others that provide names and addresses” that a new sweepstakes law prohibits many common practices. It said violators-mailers and the provider of names and addresses-could be subject to fines that could reach into the billions of dollars. The letter, dated Oct. 12, was signed by John Greytok, a special assistant to the AG, and sent to 1,200 businesses.

The DMA responded Oct. 19 in a letter from Cerasale expressing concern over the “content, tone and misleading nature” of the letter. The DMA has also requested a copy of the list of names the letter was mailed to so it can contact the recipients to explain the provisions of the law pertaining to list providers.

The DMA was particularly concerned about two issues. One was that the letter did not make it clear that list providers are liable only when they know that the information used for a sweepstakes is in violation of the law, language the DMA fought to have included in the final version of the bill. “It’s not a law that we loved, but we do have the knowledge provision there,” Cerasale said. The other concern was that the letter did not state that the law does not apply if the most valuable prize is less than $50,000.