"When it comes to deception, those [marketers] in this industry give a run for the money to those selling vinyl siding," said Sen. Richard Durbin (D., Ill.).
At minimum, legislation is expected to require companies using sweepstakes to prominently disclose that no purchase is necessary, state the odds of winning and take people off mailing lists at a relative's request. Also, penalties for mailing misleading letters would be raised.
DISCLOSURES IN LARGE PRINT
Several at the hearing urged that disclosures be as large as headlines.
Sen. Susan Collins (R., Maine), chairman of the Senate Government Affairs Permanent Subcommittee on Investigations, said that although negotiations with publishers, the Direct Marketing Association, the Promotion Marketing Association and sweepstakes companies will take place, she and other senators will proceed with legislation without industry support.
The talks are to start this week.
After the hearing, Magazine Publishers of America President-CEO Donald Kummerfeld conceded that legislation is likely.
"We don't welcome government regulation. On the other hand, we realize that there is a great deal of interest [in Congress] and this is probably going to happen," he said. "We want to ensure the regulation is fair and reasonable."
There have been indications in the magazine industry that bad publicity about sweepstakes has reduced the success of mailings.
Representatives of American Family Publishers and Publishers Clearing House, as well as Time Inc. and Reader's Digest Association, who testified said they are re-examining internal policies and are tightening oversight of sweepstakes. Also, they are establishing easier ways for families to exclude family members from further mailings.
NEW MPA CODE
MPA recently released a new code of ethical principles on sweepstakes. One element calls for publishers using sweepstakes to contact subscribers whose terms would be extended "excessively."
Both American Family Publishers and Publishers Clearing House have ethical guidelines in place for the use of sweepstakes. Senators' outrage was fueled by incidents recounted by witnesses at the hearings, and by Publishers Clearing House's spirited defense of a "personal" letter sent to 9 million people.
Deborah Holland, senior VP, called the letter "perfectly fine" though she admitted it used "a dramatization" built around the name of the recipient. "It