Ethics Alert Series

Protecting Older Consumers: Role of Self-Regulation in Sweepstakes and Prize Promotions

By Lisa Shosteck November 1, 2021

Older consumers rule the marketing landscape in many ways. Individuals aged 55-plus years comprise 75 million consumers in the U.S. and control 70% of all wealth and 40% of consumer spending (Forbes).

But as we market to older and vulnerable populations, areas of concern continue to arise. This ethics update focuses on best practices to employ in sweepstakes and prize promotions to protect the vulnerable – our older and/or mentally impaired Americans.

Developing prize promotions and sweepstakes to attract and acquire new customers and to delight and engage existing customers when done right is a win-win for the sponsoring company and for the entrants. However, you need to familiarize yourself and adhere to applicable state and federal laws, regulations, and standard industry practices to run such campaigns and avoid a potentially deceptive campaign. (See resources listed below for more information on guidance, guidelines, and regulations.)

For example, here are a few scams that made headlines:

The ANA consumer affairs staff continues to hear from concerned caregivers that their elderly family members and/or mentally impaired parents, relatives or charges have unknowingly fallen victim to bad actors or practices in this space. These populations — the elderly and handicapped — should be treated with extra care, transparency, and outreach to avoid practices that could trap them into products and services that they never purchased or may subject them to expenses and recurring costs they cannot afford.

We want to flag potential elements that scammers use to trick consumers so you know what NOT to employ in your marketing campaigns:

Minimize information requests. The oldest scam in the book is asking unsuspecting consumers to provide sensitive information like bank account information, Social Security Numbers, Driver's license numbers, or straight-up ask consumers to send money such as gift cards or wire or transfer money to receive the grand prize or to submit an "administrative fee" to obtain the larger prize money. Be careful and think through what information you are requesting. You should minimize your information requests and prioritize for relevancy and need. This will help aid in your compliance efforts as well as safeguard your security practices.
No purchase necessary to enter or win. Please familiarize yourself with the Deceptive Mail Prevention and Enforcement Act. This federal law which governs sweepstakes promotions requires mailings to clearly state that no purchase is necessary to enter a contest and that a purchase does not improve your chances of winning, among other rules and requirements. Therefore, any legitimate organization running a lottery or prize promotion would never ask consumers to submit a payment to receive their prize or award.
No use of government looking seal or logo. Companies are not permitted to send promotional mailings that appear to be coming from the government such as displaying a government logo or seal. The ANA consumer affairs staff continues to handle such complaints. The "seal" gives the mistaken perception that it's either coming directly from, or is endorsed by, the U.S. government.
Watch out for imposters. Please also be on the look-out for scammers who pose as a familiar brand (could even try to represent your company) or government agency. These imposters try to get money from unsuspecting consumers by running illegal sweepstakes and prize promotions and trading on the good reputation of known names (i.e., Publishers Clearing House, Reader's Digest, American Express, Oprah, IRS, or Federal Trade Commission to name just a few). Scammers will call, mail, email or post a fake profile on social media asking money from consumers to "win" their grand prize.
Post your sweepstakes or prize promotion rules online. Be sure to post the terms, conditions and all pertinent rules to your sweepstakes or prize promotion on your company's website including no fee to enter or increase your odds of winning, what the prizes are, their value, odds of winning, and how to redeem the prizes. This is a great way for consumers to check on the legitimacy of your promotion — by going to your company's website to verify the promotion and to see the complete set of rules. Provide a clear point of contact for consumers to contact your company with any questions.
Subscribe to ANA's DMAchoice mail suppression list. ANA offers special member pricing for companies to access an opt-in suppression file of consumers who have asked not to receive prospect promotional mail. Subscribing to this file, is smart business. You will build consumer and brand trust by honoring consumers' marketing preferences not to receive such mail, and you will improve your bottom line by saving thousands of dollars in the process.

Additional List Suppression Services:

Subscribe to the Deceased Do Not Contact List: the most sensitive name/mail removals are from individuals trying to remove a loved, deceased family member from mailed offers.
Subscribe to the Do Not Contact List for Caretakers: for caretakers trying to remove an elderly and/or mentally impaired individual from promotional mail.
Subscribe to the Email Opt-Out Service: consumers can register to have their email opted-out of acquisition/prospect promotional emails.

ANA mediates consumer inquiries. If a consumer believes a direct marketing promotion or practice is questionable and may warrant a formal review by the ANA Ethics Review Committee which receives and investigates consumer complaints, consumers and companies may file a complaint.

You may view our current and past reports for listings of companies that the Committee has found to be out-of-compliance. Our first step in the process is to reach out to companies with the consumers' concerns and request an investigation and response. The Committee's main role is to bring awareness and education regarding industry standard practices. It is our experience that the majority of companies resolve the matter fairly quickly. The Committee will only publicize its findings if the company has either responded that it will not come into compliance with industry standards or does not respond at all to repeated attempts to resolve the issue.

Other places to file a complaint:

If you do find yourself a victim of a mail fraud scheme (i.e., you received a fraudulent offer through the U.S. mail), you should report the company to the U.S. Postal Inspection Service.
National Fraud Information Center, a project of the National Consumers League — your complaint may help others and will be useful to law enforcement in stopping the scams.
Tips for filing a consumer complaint against a company provided by the U.S. government; and
ReportFraud.ftc.gov is the federal government's website where you can report fraud, scams, and bad business practices.

Resources:

If you are interested in knowledge-sharing and connecting with other ANA members about this issue and marketing and ethics, there are different opportunities to get involved:

ANA Ethics Review Committee: This committee reviews and recommends actions on marketing and ethics complaints and educates companies and consumers.
ANA Ethics Policy Committee: This committee reviews pending activities at the federal and state levels; learns about best practices and key topics and provides input into guidance on related ethical standards and compliance issues.

If you have questions or want to get more involved in marketing and ethics, please contact ethics@ana.net. We look forward to working with you in our shared efforts to ensure good business practices, consumer protection in the marketplace, and consumer trust by providing accountability.

Lisa Brown Shosteck | ANA Center for Ethical Marketing

Source

"Protecting Older Consumers: Role of Self-Regulation in Sweepstakes and Prize Promotions." ANA, 2021.