A letter circulated by the state of Texas among list managers and brokers has prompted some to consider removing the state from mailing lists or to encourage sweepstakes mailers to omit the state.
The letter warns “list brokers and other people who provide names and addresses” that a new Texas law–taking effect Nov. 1–governing sweepstakes prohibits many common practices. Each violation is subject to civil penalties of $5,000 to $50,000 each with fines that could reach the billions depending on the how many names are mailed to in Texas. The fines apply equally to the person who provided the names and addresses. It was dated Oct. 12 and signed by John Greytok, a special assistant to AG John Corynyn.
The letter, described as a “personal notice” by the AG’s office was delivered to 1,200 businesses. It appeared so startling that some initially thought it was a hoax.
“I’ve never seen anything like this where they’re going to blame the broker,” said Dan Arnold, senior vice president of list brokerage for RMI Direct Marketing, Danbury, CT. “It looks like it’s almost a joke.”
Arnold said he plans to look into whether it is worth the risk to mail sweeps offers into Texas and may suggest that clients omit the state.
At least one list firm plans to delete names from the state from all managed files and many expressed concern at being able to control mailings to ensure compliance with the new law. The bill lists 16 possible offenses.
“We are going to notify list owners that we are going to remove Texas from every list that we manage because we can’t take the risk,” one top list manager said that asked not to be identified because he had yet to notify clients of the change. “The client might still mail into the state but that’s not our issue. Our issue is that we can’t sell the state of Texas.”
The letter said that recipients should pay “particularly close attention” to companies that emphasize a sweepstakes over a product, including Publishers Clearing House, Reader’s Digest and Time Inc.
“It’s an unfortunate characterization for a couple of reasons, not for the least of which is that we have largely abandoned sweepstakes as a source of subscriptions,” said Time spokesperson Peter Costiglio.
Costiglio said that the Time Inc., plans to contact the AG’s office to “make our concern and reaction known to them.”
Members of the list community were shocked at the characterization of some of the companies identified.
“What’s particularly significant about this is that the wording has us play close attention to company’s like Reader’s Digest and Time Inc., who are scions of the direct marketing industry,” said Steve Roberts, CEO Edith Roman Associates Inc., Pearl River, NY. “These are not questionable people. If Reader’s Digest and Time inc. aren’t’ safe, nobody’s safe.”
The letter went on to read that the AG’s office believes that the direct marketing industry is generally honest and that they make and important contribution to the economy.
“It just seems to me that we have somebody out there whose trying to cast the net as wide as possible and is using the attorneys general office to intimidate people,” added Mike Bryant, vice president of list brokerage at Adrea Rubin Marketing Inc., New York.
Network
