Requires additional disclosures in connection with prize award schemes; repealer

Section 2: Repeals paragraph (f) of subdivision 3 of section 369-ee of the general business law. This section currently exempts from all prize award scheme disclosure requirements any solicitation or representation offering a consumer a prize in connection with the sale or purchase of items from a catalog seller, through a book, recording, video or periodical club arrangement, under a contractual plan or subscription arrangement, or a single sale or purchase series arrangement under which the seller ships goods to a consumer who has consented in advance to receive the goods and after receipt of the goods is given a reasonable opportunity to examine the goods and receive a full refund upon return of the goods in undamaged condition.

Section 3: Provides an effective date of the first day of November next succeeding the date on which this bill shall have become a law.

Justification

New Yorkers spend millions of dollars every year trying to hit the sweepstakes jackpot despite the fact that every legitimate sweepstakes must allow entry by those who choose not to purchase anything. One of the main goals of sweepstakes promotions is to convince the buying public that, while no purchase is technically necessary to win, an individual's chances of winning will be greatly improved by making a purchase. As a result, sweepstakes mailings currently contain a confusing tangle of improper suggestion and innuendo that is ultimately contradicted in the fine print.

Many New Yorkers, especially senior citizens, either do not see or do not understand the fine print in these sweepstakes mailings, believing instead the boldly printed assertions that "You're a Winner!" Publisher's Clearinghouse recently admitted that over twenty people arrived in person at their Tampa headquarters last year in response to mailings that suggested that they had already been chosen to win a grand prize. Despite a recent Congressional hearing on the issue of deceptive sweepstakes mailings, countless individuals continue to be taken advantage of by major and minor sweepstakes operators, lured into buying worthless trinkets and multiple subscriptions to magazines they don't even read because they believe they must make a purchase from every mailing in order to maintain their chances of winning. Frequent sweepstakes purchasers often receive dozens of entry forms per day, each one asserting that they are just one step away from winning millions of dollars. Some of the more egregious mailings even purport to give the intended victim "inside" information that he or she is about to be chosen as a winner.

Many families report loved ones losing their entire life savings to these unscrupulous sweepstakes promoters. Victims often refuse to come forward out of embarrassment or because they believe it will hurt their chances of eventually winning a prize big enough to recoup their losses. The current loophole in the law for subscription sales of periodicals exempts almost every major sweepstakes company currently operating in the United States from having to provide their consumers with a fair and accurate disclosure of sweepstakes terms and an individual's actual chances of winning.

Legislative history

2000 - A8108 - referred to consumer affairs 2002 - A2092 - referred to consumer affairs 2004 - A4692 - referred to consumer affairs 2006 - S4439 - referred to consumer affairs 2006 - S2225 - referred to consumer affairs

Fiscal implications

None.

Effective date

This act shall take effect on the first of November next succeeding the date on which it shall have become a law.