[Congressional Record Volume 144, Number 140 (Thursday, October 8, 1998)]
[Senate]
[Pages S11964-S11965]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         HONESTY IN SWEEPSTAKES

  Mr. CAMPBELL. Mr. President, today I want to take a few moments to 
let my colleagues in the Senate and House of Representatives know about 
the progress we have made in promoting Honesty in Sweepstakes during 
the 105th Congress.
  Over the past month, the Honesty in Sweepstakes Act of 1998, S. 2141, 
made excellent progress as it was refined and polished. These 
refinements reflect the valuable input I received from witness 
testimony and my fellow Senators during a Governmental Affairs 
Subcommittee hearing on S. 2141. The newest Honesty in Sweepstakes 
language also reflects the results of numerous productive discussions 
and negotiations with interested parties, including the Postal Service, 
the industry, the AARP and consumer protection groups.
  I want to thank my colleagues, Senator Thompson and Senator Cochran, 
who as the respective Chairmen of the Governmental Affairs Committee 
and the International Security, Proliferation and Federal Services 
Subcommittee, have been helpful and gracious in their efforts to help 
me move this sweepstakes reform legislation during the 105th Congress. 
I also want to thank my good friend, Senator Collins, who cosponsored 
my original Honesty in Sweepstakes bill and provided valuable input 
that is reflected in the new language I am talking about today.

[[Page S11965]]

  This revised Honesty in Sweepstakes legislation would go a long way 
toward protecting our nation's seniors and other vulnerable consumers 
from misleading and deceptive sweepstakes promotions. This is something 
we should do this year to protect consumers. I urge my colleagues to 
pass this legislation before the 105th Congress concludes.
  For my colleagues' reference, I ask unanimous consent that this new 
Honesty in Sweepstakes language be printed in the Record.
  There being no objection, the language was ordered to be printed in 
the Record, as follows:

                                  S.--

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled.

     SECTION 1. HONESTY IN SWEEPSTAKES ACT OF 1998.

       (a) Short Title.--This Act may be cited as the ``Honest in 
     Sweepstakes Act of 1998''.
       (b) Unmailable Matter.--Section 3001 of title 39. United 
     States Code, is amended by--
       (1) redesignating subsections (j) and (k) as subsections 
     (l) and (m), respectively; and
       (2) inserting after subsection (i) the following:
       ``(j)(1) Matter otherwise legally acceptable in the mails 
     that--
       ``(A) constitutes a solicitation or offer in connection 
     with the sales promotion for a product or service (including 
     any sweepstakes) that includes the chance or opportunity to 
     win anything of value; and
       ``(B) contains words or symbols that suggest that--
       ``(i) the recipient has or will receive anything of value 
     if that recipient has in fact not won that thing of value; or
       ``(ii) the recipient is likely to receive anything of value 
     if statistically the recipient is not likely to receive 
     anything of value.

     shall not be carried or delivered by mail, and may be 
     disposed of as the Postal Service directs, unless such matter 
     bears the notice described in paragraph (2).
       ``(2) (A) The notice referred to in paragraph (1) is the 
     following notice:
       ``(i) This is a game of chance (or sweepstakes, if 
     applicable). You have not automatically won. Your chances of 
     winning are (inserting corresponding mathematical probability 
     for each prize shown). No purchase is required either to win 
     a prize or enhance your chances of winning a prize; or a 
     notice to the same effect in words which the Postal Service 
     may prescribe; or
       ``(ii) a standardized Postal Service designed warning label 
     to the same effect as the Postal Service may prescribe.
       ``(B) The notice described in subparagraph (A) shall be in 
     conspicuous and legible type in contrast by typography, 
     layout, or color with other printing on its face, in 
     accordance with regulations that the Postal Service shall 
     prescribe and be prominently displayed on the first page of 
     the enclosed printed material and on any other pages 
     enclosed.
       ``(C) If the matter described in paragraph (1) is an 
     envelope, the face of the envelope shall bear the notice 
     described in subparagraph (A).
       ``(D) If the matter described in paragraph (1) is an order 
     entry device, the face of the order entry device shall bear 
     the following notice:
       `` `This is a game of chance (or sweepstakes, if 
     applicable). No purchase is required either to win a prize or 
     enhance your chances of winning a prize; or a notice to the 
     same effect in words which the Postal Service may prescribe.'
       ``(k) Matter otherwise legally acceptable in the mails that 
     constitutes a solicitation or offer in connection with the 
     sales promotion for a product or service that uses any 
     matter resembling a negotiable instrument shall not be 
     carried or delivered by mail, and may be disposal of as 
     the Postal Service directs, unless such matter bears on 
     the face of the negotiable instrument in conspicuous and 
     legible type in contrast by typography, layout, or color 
     with other printing on its face, in accordance with 
     regulations which the Postal Service shall prescribe the 
     following notice: `This is not a check (or negotiable 
     instrument). This has no cash value.'. or a notice to the 
     same effect in words which the Postal Service may 
     prescribe.''
       (c) Technical Amendment.--Section 3005(a) of title 39. 
     United States Code, is amended by--
       (1) striking ``or'' after ``(h).'' both places it appears; 
     and
       (2) inserting ``. (j). or (k)'' after ``(i)''.
       (d) Penalties.--
       (1) In general.--Section 3012 of title 39. United States 
     Code, is amended--
       (A) by redesignating subsections (b), (c), and (d), as 
     subsections (c), (d), and (e), respectively;
       (B) by inserting after subsection (a) the following:
       ``(b) Any person who, through use of the mail, sends any 
     matter which is nonmailable under sections 3001 (a) through 
     (k), 3014, or 2015 of this title, shall be liable to the 
     United States for a civil penalty in accordance with 
     regulations the Postal Service shall prescribe. The civil 
     penalty shall not exceed $50,000 for each mailing of less 
     than 50,000 pieces; $100,000 for each mailing of 50,000 to 
     100,000 pieces; with an additional $10,000 for each 
     additional 10,000 pieces above 100,000, not to exceed 
     $2,000,000.'';
       (C) in subsection (c)(1) and (2), as redesignated, by 
     inserting after ``of section (a)'' the following: ``or 
     subsection (b),''; and
       (D) in subsection (d), as redesignated, by striking 
     ``Treasury of the United States'' and inserting ``Postal 
     Service Fund established by section 2003 of title title''.
       (2) Allocation of Funds.--It is the sense of Congress that 
     civil penalties collected through the enforcement of the 
     amendment made by paragraph (1) should be allocated by the 
     Postal Service to increase consumer awareness of misleading 
     solicitations received through the mail, including releasing 
     an annual listing of the top 10 offenders of the Honesty in 
     sweepstakes Act of 1998.
       (e) No Preemption.--Nothing in this Act shall preempt any 
     State law that regulates advertising or sales promotions or 
     goods and services that includes the chance or opportunity to 
     win anything of value.

  Ms. COLLINS. Mr. President, I want to take this opportunity to 
commend Senator Campbell for his efforts to protect consumers from con 
artists who try to cheat Americans using deceptive mailings. I am 
pleased to join in support of his legislation.
  Senator Campbell's bill would require a disclosure on mailings to 
inform individuals that they have not automatically won a prize and 
that a purchase is not necessary to participate in a sweepstakes 
contest. New civil penalties could be imposed on violations of the 
provisions against sending deceptive mail.
  Senator Campbell has been a strong leader and forceful advocate for 
curtailing abuses by sweepstakes firms who send misleading mailings 
that suggest that people have won hundreds of thousands, or even 
millions, of dollars. Such deceptive mailings have caused people across 
the country to buy unnecessary products or to send money in the hope of 
winning a large prize. One scam even prompted some individuals to fly 
to Florida thinking they had won the grand prize in a major 
sweepstakes.
  Millions of Americans have received sweepstakes letters that use 
deceptive marketing ploys to encourage the purchase of magazines and 
other products. A common tactic is a promise of winnings printed in 
large type, such as: ``You Were Declared One of Our Latest Sweepstakes 
Winners And You're About to Be Paid $833,337 in Cash!'' Of course, the 
recipient isn't really a winner, as the fine print said the money is 
won only ``If you have and return the grand prize winning number in 
time.''
  Another problem is what I call ``government look-alike mailings,'' 
which look deceptively like mailings from Federal agencies. An example 
of such a deceptive mailing was sent to be by a woman from Machiasport, 
Maine. The letter was marked ``Urgent Delivery, A Special Notification 
of Cash Currently Being Held by the U.S. Government is ready for 
shipment to you.'' A postcard asks the consumer to send $9.97 to learn 
how to receive this cash. Of course, this was not a legitimate mailing 
from the Federal Government, but simply a ploy used by an unscrupulous 
individual to trick an unsuspecting consumer into sending money.
  The experience of my constituents, as well as testimony presented by 
Senator Campbell and others at the hearing chaired by our colleague, 
Senator Cochran, convinced me that Congress must pass strong 
legislation to stop sweepstakes fraud and deceptive mailings.
  As Chairman of the Permanent Subcommittee on Investigations, I have 
focused our agenda on a number of consumer frauds, and I will be 
working with Senator Cochran to further examine the issue of deceptive 
mailings in the coming months. I commend Senator Campbell for his 
leadership and look forward to working with him on this issue next 
year.

                          ____________________