A class action lawsuit has been filed against a medical equipment seller for alleged violations of the junk fax provisions of the Telephone Consumer Protection Act (“TCPA”). The TCPA fax lawsuit, filed in the United States District Court for the Northern District of Illinois, arises from the alleged receipt of unsolicited fax advertisements for the sale of personal protective equipment (PPE), including facemasks.
On December 17, 2020, the Federal Trade Commission (“FTC”) announced that it had concluded its first enforcement action against six cannabidiol (“CBD”) companies (the “Sellers”), stemming from allegations that the Sellers had deceptively advertised their CBD-based products. The FTC alleged that the Sellers made a wide range of claims, including that their CBD products could treat serious health conditions, such as cancer, heart disease, hypertension, and Alzheimer’s disease, without providing any clinical support that they could do so. As a result of their FTC CBD marketing settlement, the Sellers are prohibited from making future deceptive advertising claims, are required to provide scientific evidence to support any health claims, and, for some of them, pay a substantial fine. Businesses that sell CBD products must be aware of FTC CBD marketing regulations when advertising, or risk FTC investigation.
What are FTC CBD Marketing Regulations?[Read More]
The California Department of Justice (“DOJ”) has provided notice of yet another round of proposed modifications to the California Consumer Privacy Act (“CCPA”). This fourth set of new CCPA modifications addresses the twenty (20) comments businesses submitted in response to the third set of modifications on October 12, 2020. The DOJ will accept written comments on the new CCPA modifications until 5:00 p.m. on December 28, 2020.
What are the new CCPA modifications?[Read More]
Sponsoring sweepstakes promotions are one of the most exciting marketing vehicles that a business can use to increase visibility and engage customers. Before starting, it is essential to take detailed consideration of all rules and regulations governing sweepstakes promotions. By now, readers are familiar with the basics of how to conduct a sweepstakes promotion. However, many do not know who implements and oversees compliance with applicable sweepstakes laws, or which governmental entities they should be aware of.
In this blog, we take a look at the various entities which are tasked with enforcing sweepstakes rules and regulations across the country. There are both federal and state agencies that oversee sweepstakes promotions. These agencies work on multiple levels to ensure fair business practices in the advertising and administration of sweepstakes contests.
Federal Agencies that Govern Sweepstakes Promotions
Federal agencies with jurisdiction over sweepstakes promotions include:
- The Federal Trade Commission (“FTC”). Originally established in 1914 to prevent anticompetitive business practices, Congress eventually provided the FTC with authority to police “deceptive acts or practices” and the power to administer and enforce consumer protection laws. According to the FTC, telemarketers that advertise sweepstakes promotions are required to inform consumers of “the nature or value of the prizes, that entering is free, and the terms and conditions to redeem a prize.” In addition, sweepstakes marketing materials that are sent through the U.S. Mail or via the Internet must clearly disclose that consumers do not have to pay to participate.
- The Federal Communications Commission (“FCC”). The FCC regulates communications via radio, television, wire, satellite and cable across the United States. This agency was established in 1934 as the country’s primary independent authority over communications and technology. FCC regulations dictate that television and radio broadcast stations that run sweepstakes promotions are required to accurately disclose their respective contest rules and entrance eligibility criteria.
- The United States Postal Service (“USPS”). The USPS created the United States Postal Inspection Service (“USPIS”), an agency that is charged with enforcing laws that are meant to protect the nation’s mail system against illegal and dangerous use. Among other responsibilities, the USPIS protects consumers from predatory scams and promotions. For example, sweepstakes promotions that are advertised through use of the USPS could run afoul of mail fraud regulations if sponsors do not comply with applicable contest laws.
- The United States Department of Justice (“DOJ”). The Consumer Protection Branch of the DOJ works with the above-mentioned agencies to enforce applicable laws. Resources listed on their website are aimed at protecting consumers from deceptive promotions, such as lottery fraud.
States Govern Sweepstakes
Sweepstakes promotions are also regulated by various state bodies. For example, cash prizes above certain thresholds trigger sweepstakes registration and bonding requirements. These requirements predominantly apply to sweepstakes conducted in the states of Florida, New York and Rhode Island. In Florida and New York, sweepstakes must be registered and bonded if the aggregate prize values exceed $5,000. Comparatively, where the aggregate prize amounts exceed $500, the State of Rhode Island requires such sweepstakes operators to register with the Secretary of State (but no bonding is necessary.) This registration requirement only applies to promotions that are conducted by brick and mortar-businesses in Rhode Island via a retail outlet.
Don’t Leave Your Future to Chance
Sweepstakes laws can be nuanced and confusing, and there are significant costs involved if you do not take the necessary precautions to ensure that your promotional contest matches your budget and goals.
Avoiding possible penalties associated with improperly conducting sweepstakes promotions is a must. An experienced attorney can help guide you through the complexities of federal and state rules and regulations. Klein Moynihan Turco regularly assists businesses with the regulatory compliance issues associated with conducting sweepstakes promotions. Contact us today to get started by emailing us at firstname.lastname@example.org, or calling us at (212) 246-0900.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
On December 14, 2020, the Federal Communications Communication (“FCC”) issued an Order on Reconsideration (“Order”) overturning a 2016 decision that allowed federal government contractors to robocall consumers without their prior express consent. The Order updated the FCC’s previous interpretation of the Telephone Consumer Protection Act (“TCPA”). Now, the FCC has made clear that certain government contractors are not exempt from TCPA robocall regulations. Federal government contractors are, therefore, required to obtain prior express consent before calling consumers through automated means.
Why did the FCC update its interpretation?[Read More]
W. Clay Mackey (“Opposer”), owner of the registered mark CHINOOK, for table wine, sparkling wine and beer, filed an opposition against Lawson’s Finest Liquids, LLC (“Applicant”) federal trademark application for CHINOOKER’D IPA, for beer. On December 7, 2020, the Trademark Trial and Appeal Board (“TTAB”) canceled the Opposer’s registration of CHINOOK for beer on the ground of abandonment and concluded that “CHINOOKER’D IPA for beer is not likely to cause confusion with Opposer’s registration for CHINOOK for table wine and sparkling wine.” This TTAB trademark decision is inconsistent with other rulings finding that beer and wine are related products that can cause confusion when the marks are similar or identical to one another.
Why did the TTAB find that there was no confusion?[Read More]
As its name suggests, the Telephone Consumer Protection Act of 1991 (“TCPA”) was drafted, debated, passed, and signed into law well before cell phones became ubiquitous. It is, therefore, unsurprising that the statutory language of the TCPA does not expressly state whether the law applies to text messages. This was a subject of great interest in recent oral arguments before the United States Supreme Court (“SCOTUS”) in Facebook v. Duguid (“Facebook”). In Facebook, several of SCOTUS’s textualist Justices wondered aloud whether the TCPA could or should apply to text messages, when the statute does not even mention them.
What was the Crux of the Justices’ Questions?[Read More]
The United States Supreme Court (“SCOTUS”) held oral arguments this week on Facebook, Inc. v. Duguid. The Justices are being asked to provide the definitive answer on the TCPA’s ATDS definition. For years, what dialing equipment qualifies as an automatic telephone dialing system (“ATDS”) for purposes of the Telephone Consumer Protection Act (“TCPA”) has been a moving target. Following this week’s oral arguments, SCOTUS is at long last poised to definitively answer the question.
How might SCOTUS decide the TCPA ATDS definition based on the oral argument?[Read More]