DMA vows tougher stance on sweepstakes practices

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The Direct Marketing Association last week promised a congressional hearing on sweepstakes mailings that it will rewrite its ethics code and enforce it more vigorously. But whether new rules and increased vigilance will satisfy critics of the promotional tactic--and even be given the chance--remains uncertain.

Amid charges that sweepstakes target seniors and, as one U.S. senator put it, "prey on the hopes and dreams of .|.|. the most vulnerable citizens," members of the Senate Government Affairs Committee last week promised to work for new laws regulating sweepstakes.

"We have to take the profits out of the sweepstakes scam," said Sen. Carl Levin (D., Mich.), a member of the internal-security subcommittee.


DMA Senior VP Richard Barton said his group likely would support legislation to toughen regulation of sweepstakes mailings.

However, he said one proposal--offered by Sen. Ben Nighthorse Campbell (R., Colo.)--would go beyond the issue of fraud and hurt legitimate uses of sweepstakes. That proposal would require marketers to prominently display on the front of envelopes that the enclosed mailing is a sweepstakes and that no purchase is necessary to enter. "Far too many consumers are being taken advantage of by increasingly deceptive marketing ploys," said Sen. Campbell.

His bill followed the filing of lawsuits by state attorneys general against American Family Publishers--partially owned by Time Inc.--following revelations that copy in some of American Family's mailings had caused people to fly to Florida to pick up winnings they thought they were receiving.


The DMA proposals offered by Mr. Barton would require marketers using sweepstakes to:

*Quickly identify high-activity respondents and take additional steps to make clear to them they don't have to purchase anything and, if necessary, remove their names from lists.

*Provide some sort of name-suppression list that relatives could use to get family members taken off mailing lists.

*Act as a clearinghouse for consumer complaints.

Also, the industry's sweepstakes guidelines would be rewritten to require clearer explanations of sweepstakes rules and more prominent disclosure that nothing must be bought in order to enter.

Mr. Barton said DMA members that don't comply will be kicked out of the association.

Copyright September 1998, Crain Communications Inc.

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