New Jersey may become the first state to toughen existing federal legislation controlling the direct mail sweepstakes industry.
A bill to amend the state’s Consumer Fraud Act is working its way through the legislature and would make it a crime, punishable by up to seven years in prison, for a sweepstakes operator to:
– Fail to clarify the odds of winning for voluntary participants and non-participants in sales presentations.
– 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 was expected to approve the bill and send it to the Senate for action last month. The measure would also authorize the Attorney General’s office to file civil actions, on top of the existing federal law, against first offenders of up to $7,500 for each violation, and fines of up to $15,000 per violation plus subsequent investigative and prosecutorial costs..
Violators of the federal law – the Deceptive Mail Prevention and Enforcement Act, which took effect April 13 – can be fined as much as $1 million for a first offense and $2 million for each ensuing charge.
While many of the New Jersey bill’s provisions repeat some of those in the federal law, its sponsors, Republican assembly members Joseph Azzolina and Marion Crecco, say the measure provides state residents “with additional protections against phony giveaways that are nothing more than disguised sales promotions.”
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