MAGAZINES ADOPT 1ST SWEEPSTAKES ETHICS GUIDELINES: MPA TRIES TO AVOID FEDERAL ACTION ON SUBSCRIPTION SALES PROMOTIONS

By Published on .

After months of bad publicity surrounding the use of sweepstakes to sell subscriptions, Magazine Publishers of America is finally taking action.

In an effort to pre-empt federal legislation, the trade group's executive board has adopted the first-ever guidelines on how to manage sweepstakes promotions.

"We recognize that there have been problems to which we need to be responsive," said MPA Chairman Edward Lewis, CEO of Essence Communications. "This is one of our industry's primary sources of circulation and we need to be out-front with how people perceive us."

PROMOTIONS DRIVE NEW BUSINESS

Such promotions typically help sell one-third of all new magazine subscriptions.

The MPA soon will send ethics guidelines for selling subscriptions through sweepstakes to its members. It declined to release the guidelines, saying it is still fine-tuning the exact language.

The industry is particularly concerned because early estimates indicate responses to direct-mail offers could be off by as much as 80%, partially due to the bad publicity.

The MPA plans to hold a meeting this week to develop a strategy on how best to pitch its stance to consumers and legislators as well as members.

The sweepstakes industry has come under fire for using language that allegedly fools people into believing they've won substantial amounts of cash or other prizes. Another state, Wisconsin, recently filed a lawsuit against Publishers Clearing House, with state Attorney General James Doyle charging the sweepstakes giant with "deceptive and misleading" practices.

"Publishers Clearing House is not the only one that has prompted concerns," said a spokesman for Mr. Doyle, who added that Wisconsin's investigation is ongoing.

STATES TO MEET

Several state attorneys general plan to meet at the end of the month to discuss the allegedly fraudulent sweepstakes offers.

"We believe our promotions are very clear, and no reasonable person could be misled by them," said Christopher L. Irving, director of consumer affairs at Publishers Clearing House.

The Wisconsin suit comes as Congress moves closer to considering legislation that targets sweepstakes mailings.

Last week, Sen. Susan Collins (R., Maine), chairman of the Permanent Subcommittee on Investigations, introduced a bill that would raise fines, make it easier for postal inspectors to hold back fraudulent mail, bar marketers using sweepstakes from imitating government mailings and require that they more clearly disclose odds.

"It is very important we build up a consensus within the industry to come up with a policy we as an entire industry can follow," said Greg Coleman, senior VP at Reader's Digest Association. `Then we can create legislation around our own best practices and intelligent guidelines that protect our readers."

In this article:
Most Popular