[Congressional Record Volume 145, Number 11 (Friday, January 22, 1999)]
[Senate]
[Pages S923-S924]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CAMPBELL:

[[Page S923]]

  S. 301. A bill to amend title 39, United States Code, relating to 
mailability, false representations, civil penalties, and for other 
purposes; to the Committee on Governmental Affairs.


                   HONESTY IN SWEEPSTAKES ACT OF 1999

 Mr. CAMPBELL. Mr. President, today I introduce the Honesty in 
Sweepstakes Act of 1999. This bill addresses one of the most troubling 
and persistent consumer abuse issues we face today: highly deceptive, 
and all too often financially damaging, sweepstakes and other mass mail 
promotions.
  Our nation's seniors and other vulnerable consumers are clearly being 
taken advantage of, and in some cases seriously financially harmed, by 
intentionally misleading sweepstakes promotions. Thousands of 
nationwide victims are being deliberately misled into believing that 
they have just won or are likely to win a sweepstakes when in fact they 
have neither won nor are in fact likely to win such a prize.
  Each year American consumers also receive hundreds of millions of 
cashier's check look-alikes that deceptively masquerade as real 
cashier's checks while actually being worthless. These ploys unfairly 
prey upon some people's hopes and dreams.
  Over the years sweepstakes have become increasingly sophisticated and 
deceptive. While these promotional tactics may be technically legal 
they are designed to skirt the intentions and outer limits of the law. 
These deceptive tactics run counter to core American values of honesty 
and forthrightness. There is abundant evidence, including the deceptive 
sweepstakes and other promotions each of us receives in our mailboxes 
on a regular basis, that current laws aimed at stopping these deceptive 
promotions simply are not working. Something needs to be done.
  This bill addresses these deceptive sweepstakes and cashier's checks 
look-alikes by requiring up-front, clear and easy to read Honesty in 
Sweepstakes disclosures that will help protect consumers by 
counterbalancing false promises and deception. While honest and 
straight-forward sweepstakes promoters have nothing to fear from this 
bill, those promotions that revert to false and deceptive tactics will 
feel the heat.
  The Honesty in Sweepstakes Act of 1999 is a refined version of my 
original legislation, S. 2141, that I introduced during the 105th 
Congress. The bill I am introducing today incorporates valuable input I 
received during a Senate hearing on S.2141 and from productive 
discussions and negotiations involving key interested parties. Included 
among those who have made valuable contributions are: my Senate 
colleagues; the U.S. Postal Service; the General Accounting Office; 
Attorneys General from several states including Colorado, Florida, 
Michigan and New York; the American Association of Retired Persons; the 
Consumer Federation of America; the National Consumers League; the 
Direct Marketing Association; the Magazine Publishers of America and 
other industry representatives and experts. I want to thank them for 
their contributions to the Honesty in Sweepstakes Act of 1999.
  The AARP has informed me that ``Research has shown that older 
Americans may be particularly vulnerable to techniques used by 
sweepstakes companies. At times they end up purchasing products that 
they do not want in the hopes of improving their chances of winning. 
Additionally, it has been shown that participation in these sweepstakes 
can lead to a rise in the number of telemarketing calls a person 
receives as well as an increase in mailed solicitations.''
  The Honesty in Sweepstakes Act of 1999 will go a long way toward 
protecting our nation's seniors and other vulnerable consumers from 
misleading and deceptive sweepstakes promotions. The most vulnerable 
consumers among us deserve this protection. I urge my colleagues to 
support this legislation.
  I ask unanimous consent that this bill and a letter from the AARP be 
printed in the Record.
  There being no objection, the items were ordered to be printed in the 
Record, as follows:

                                 S. 301

       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 1999.

       (a) Short Title.--This Act may be cited as the ``Honesty in 
     Sweepstakes Act of 1999''.
       (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 disposed 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 3015 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 subsection (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 this 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 1999.
       (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.

[[Page S924]]

     
                                  ____
                                                         AARP,

                                 Washington, DC, January 22, 1999.
     Hon. Ben Nighthorse Campbell,
     Russell Senate Office Building, Washington, DC.
       Dear Senator Campbell: AARP thanks you for drawing 
     attention to the problem of deceptive and misleading 
     sweepstakes solicitations by introducing the ``Honesty in 
     Sweepstakes Act of 1999.'' Research has shown that older 
     Americans may be particularly vulnerable to techniques used 
     by sweepstakes companies. At times they end up purchasing 
     products that they do not want in the hopes of improving 
     their chances of winning. Additionally, it has been shown 
     that participation in these sweepstakes can lead to a rise in 
     the number of telemarketing calls a person receives as well 
     as an increase in mailed solicitations.
       AARP appreciates your efforts on behalf of consumers to 
     eradicate the practice of fraudulent sweepstakes mailings 
     through the introduction of the ``Honesty in Sweepstakes Act 
     of 1999.'' We look forward to working with you and other 
     Members on a bi-partisan basis to address this issue in the 
     106th Congress.
           Sincerely,
     Horace B. Deets.

                          ____________________