New Jersey is on the way toward becoming the first state to increase its controls over the direct mail sweepstakes industry with legislation containing regulations that are tougher than those contained in a new federal law that goes into effect next week.
So far, no other state has introduced similar legislation.
A bill to amend the Consumer Fraud Act is working its way through the legislature that would make it a crime, punishable by up to seven years in prison, for a sweepstake operator to:
* Fail to clarify the odds of winning in relation to those who voluntarily participate in a sales presentation.
* Use a sweepstakes entry form to mislead consumers about the true intent of the offering.
* Fail to include detailed information about the sweepstakes, including the odds of winning, in a clear, concise manner.
* Require a person to attend a sales presentation as a condition to enter a sweepstakes or to win a prize.
The General Assembly is expected to approve the bill and send it to the Senate for action within the next 10 days. The measure would also authorize the Attorney General’s office to file civil actions against violators who face a first offense fine of up to $7,500 for each violation and fines of up to $15,000 per violation for subsequent offenses, plus investigative and prosecutorial costs.
Violators of the federal law, the Deceptive Mail Prevention and Enforcement Act which goes into effect next Thursday (April 13), face fines of up to $1 million for a first offense and $2 million for each subsequent violation.
While many of the New Jersey bill’s provisions repeat some of the federal law’s, its sponsors, Republican Assembly members Joseph Azzolina and Marion Crecco, say their measure provides state residents “with additional protections against phony give-aways that are nothing more than disguised sales promotions.”
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