[Congressional Record Volume 145, Number 111 (Monday, August 2, 1999)]
[Senate]
[Pages S9965-S9977]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             DECEPTIVE MAIL PREVENTION AND ENFORCEMENT ACT

  The PRESIDING OFFICER. Under the previous order, the Senate will now 
proceed to consideration of S. 335, which the clerk will report by 
title.
  The legislative assistant read as follows:

       A bill (S. 335) to amend chapter 30 of title 39, United 
     States Code, to provide for the nonmailability of certain 
     deceptive matter relating to games of chance, administrative 
     procedures, orders, and civil penalties relating to such 
     matter, and for other purposes.

  The Senate proceeded to consider the bill which had been reported 
from the Committee on Governmental Affairs, with an amendment to strike 
all after the enacting clause and inserting in lieu thereof the 
following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Deceptive Mail Prevention 
     and Enforcement Act''.

     SEC. 2. RESTRICTIONS ON MAILINGS USING MISLEADING REFERENCES 
                   TO THE UNITED STATES GOVERNMENT.

       Section 3001 of title 39, United States Code, is amended--
       (1) in subsection (h)--
       (A) in the first sentence by striking ``contains a seal, 
     insignia, trade or brand name, or any other term or symbol 
     that reasonably could be interpreted or construed as implying 
     any Federal Government connection, approval or endorsement'' 
     and inserting the following: ``which reasonably could be 
     interpreted or construed as implying any Federal Government 
     connection, approval, or endorsement through the use of a 
     seal, insignia, reference to the Postmaster General, citation 
     to a Federal statute, name of a Federal agency, department, 
     commission, or program, trade or brand name, or any other 
     term or symbol; or contains any reference to the Postmaster 
     General or a citation to a Federal statute that misrepresents 
     either the identity of the mailer or the protection or status 
     afforded such matter by the Federal Government''; and
       (B) in paragraph (2)--
       (i) in subparagraph (A) by striking ``and'' at the end;
       (ii) in subparagraph (B) by striking ``or'' at the end and 
     inserting ``and''; and
       (iii) by inserting after subparagraph (B) the following:
       ``(C) does not contain a false representation implying that 
     Federal Government benefits or services will be affected by 
     any purchase or nonpurchase; or'';
       (2) in subsection (i) in the first sentence--
       (A) in the first sentence by striking ``contains a seal, 
     insignia, trade or brand name, or any other term or symbol 
     that reasonably could be interpreted or construed as implying 
     any Federal Government connection, approval or endorsement'' 
     and inserting the following: ``which reasonably could be 
     interpreted or construed as implying any Federal Government 
     connection, approval, or endorsement through the use of a 
     seal, insignia, reference to the Postmaster General, citation 
     to a Federal statute, name of a Federal agency, department, 
     commission, or program, trade or brand name, or any other 
     term or symbol; or contains any reference to the Postmaster 
     General or a citation to a Federal statute that misrepresents 
     either the identity of the mailer or the protection or status 
     afforded such matter by the Federal Government''; and
       (B) in paragraph (2)--
       (i) in subparagraph (A) by striking ``and'' at the end;
       (ii) in subparagraph (B) by striking ``or'' at the end and 
     inserting ``and''; and
       (iii) by inserting after subparagraph (B) the following:
       ``(C) does not contain a false representation implying that 
     Federal Government benefits or services will be affected by 
     any purchase or nonpurchase; or'';
       (3) by redesignating subsections (j) and (k) as subsections 
     (m) and (o), respectively; and
       (4) by inserting after subsection (i) the following:
       ``(j)(1) Matter otherwise legally acceptable in the mails 
     described under paragraph (2)--
       ``(A) is nonmailable matter;
       ``(B) shall not be carried or delivered by mail; and
       ``(C) shall be disposed of as the Postal Service directs.
       ``(2) Matter that is nonmailable matter referred to under 
     paragraph (1) is any matter that--
       ``(A) constitutes a solicitation for the purchase of any 
     product or service that--
       ``(i) is provided by the Federal Government; and
       ``(ii) may be obtained without cost from the Federal 
     Government; and
       ``(B) does not contain a clear and conspicuous statement 
     giving notice of the information under subparagraph (A) (i) 
     and (ii).''.

     SEC. 3. RESTRICTIONS ON SWEEPSTAKES AND DECEPTIVE MAILINGS.

       Section 3001 of title 39, United States Code, is amended by 
     inserting after subsection (j) (as added by section 2(4) of 
     this Act) the following:
       ``(k)(1) In this subsection, the term--
       ``(A) `facsimile check' means any matter designed to 
     resemble a check or other negotiable instrument that is not 
     negotiable;

[[Page S9966]]

       ``(B) `skill contest' means a puzzle, game, competition, or 
     other contest in which--
       ``(i) a prize is awarded or offered;
       ``(ii) the outcome depends predominately on the skill of 
     the contestant; and
       ``(iii) a purchase, payment, or donation is required or 
     implied to be required to enter the contest; and
       ``(C) `sweepstakes' means a game of chance for which no 
     consideration is required to enter.
       ``(2) Matter otherwise legally acceptable in the mails that 
     is nonmailable matter described under paragraph (3) shall not 
     be carried or delivered by mail and may be disposed of as the 
     Postal Service directs.
       ``(3) Matter that is nonmailable matter referred to under 
     paragraph (2) is any matter (except matter as provided under 
     paragraph (4)) that--
       ``(A)(i) includes entry materials for a sweepstakes or a 
     promotion that purports to be a sweepstakes; and
       ``(ii)(I) does not contain a statement that discloses in 
     the mailing, in the rules, and on the order or entry form, 
     that no purchase is necessary to enter such sweepstakes;
       ``(II) does not contain a statement that discloses in the 
     mailing, in the rules, and on the order or entry form, that a 
     purchase will not improve an individual's chances of winning 
     with an entry from such materials;
       ``(III) does not state all terms and conditions of the 
     sweepstakes promotion, including the rules and entry 
     procedures for the sweepstakes, in language that is easy to 
     find, read, and understand;
       ``(IV) does not disclose the sponsor or mailer of such 
     matter and the principal place of business or an address at 
     which the sponsor or mailer may be contacted;
       ``(V) does not contain sweepstakes rules that clearly 
     state--
       ``(aa) the estimated odds of winning each prize;
       ``(bb) the quantity, estimated retail value, and nature of 
     each prize; and
       ``(cc) the schedule of any payments made over time;
       ``(VI) represents that individuals not purchasing products 
     may be disqualified from receiving future sweepstakes 
     mailings;
       ``(VII) requires that a sweepstakes entry be accompanied by 
     an order or payment for a product previously ordered;
       ``(VIII) represents that an individual is a winner of a 
     prize unless that individual has won a prize;
       ``(IX) contains a representation that contradicts, or is 
     inconsistent with sweepstakes rules or any other disclosure 
     required to be made under this subsection, including any 
     statement qualifying, limiting, or explaining the rules or 
     disclosures in a manner inconsistent with such rules or 
     disclosures; or
       ``(X) represents that the purchase of a product will allow 
     a sweepstakes entry to receive an advantage in the winner 
     selection process, to be eligible for additional prizes in 
     that sweepstakes, or for an entry submitted in a future 
     sweepstakes to have a better chance of winning;
       ``(B)(i) includes entry materials for a skill contest or a 
     promotion that purports to be a skill contest; and
       ``(ii)(I) does not state all terms and conditions of the 
     skill contest, including the rules and entry procedures for 
     the skill contest, in language that is easy to find, read and 
     understand;
       ``(II) does not clearly and conspicuously disclose the 
     sponsor or mailer of the skill contest and the principal 
     place of business or an address at which the sponsor or 
     mailer may be contacted; or
       ``(III) does not contain skill contest rules that clearly 
     state, as applicable--
       ``(aa) the number of rounds or levels of the contest and 
     the cost to enter each round or level;
       ``(bb) that subsequent rounds or levels will be more 
     difficult to solve;
       ``(cc) the maximum cost to enter all rounds or levels;
       ``(dd) the estimated number or percentage of entrants who 
     may correctly solve the skill contest or the approximate 
     number or percentage of entrants correctly solving the past 3 
     skill contests conducted by the sponsor;
       ``(ee) the identity or description of the qualifications of 
     the judges if the contest is judged by other than the 
     sponsor;
       ``(ff) the method used in judging;
       ``(gg) the date by which the winner or winners will be 
     determined and the date or process by which prizes will be 
     awarded;
       ``(hh) the quantity, estimated retail value, and nature of 
     each prize; and
       ``(ii) the schedule of any payments made over time; or
       ``(C) includes any facsimile check that does not contain a 
     statement on the check itself that such check is not a 
     negotiable instrument and has no cash value.
       ``(4) Matter that appears in a magazine, newspaper, or 
     other periodical and contains materials that are a facsimile 
     check, skill contest, or sweepstakes is exempt from paragraph 
     (3), if the matter--
       ``(A) is not directed to a named individual; or
       ``(B) does not include an opportunity to make a payment or 
     order a product or service.
       ``(5) Any statement, notice, or disclaimer required under 
     paragraph (3) shall be clearly and conspicuously displayed.
       ``(6) In the enforcement of paragraph (3), the Postal 
     Service shall consider all of the materials included in the 
     mailing and the material and language on and visible through 
     the envelope.
       ``(l)(1) Any person who uses the mails for any matter to 
     which subsection (h), (i), (j), or (k) applies shall adopt 
     reasonable practices and procedures to prevent the mailing of 
     such matter to any person who, personally or through a 
     conservator, guardian, individual with power of attorney--
       ``(A) submits to the mailer of such matter a written 
     request that such matter should not be mailed to such person; 
     or
       ``(B)(i) submits such a written request to the attorney 
     general of the appropriate State (or any State government 
     officer who transmits the request to that attorney general); 
     and
       ``(ii) that attorney general transmits such request to the 
     mailer.
       ``(2) Any person who mails matter to which subsection (h), 
     (i), (j), or (k) applies shall maintain or cause to be 
     maintained a record of all requests made under paragraph (1). 
     The records shall be maintained in a form to permit the 
     suppression of an applicable name at the applicable address 
     for a 5-year period beginning on the date the written request 
     under paragraph (1) is submitted to the mailer.''.

     SEC. 4. POSTAL SERVICE ORDERS TO PROHIBIT DECEPTIVE MAILINGS.

       Section 3005(a) of title 39, United States Code, is 
     amended--
       (1) by striking ``or'' after ``(h),'' both places it 
     appears; and
       (2) by inserting ``, (j), or (k)'' after ``(i)'' in both 
     such places.

     SEC. 5. TEMPORARY RESTRAINING ORDER FOR DECEPTIVE MAILINGS.

       Section 3007 of title 39, United States Code, is amended--
       (1) by redesignating subsection (b) as subsection (c); and
       (2) by striking subsection (a) and inserting the following:
       ``(a)(1) In preparation for or during the pendency of 
     proceedings under sections 3005 and 3006, the Postal Service, 
     in accordance with section 409(d), may apply to the district 
     court in any district in which mail is sent or received as 
     part of the alleged scheme, device, lottery, gift enterprise, 
     sweepstakes, skill contest, or facsimile check or in any 
     district in which the defendant is found, for a temporary 
     restraining order and preliminary injunction under the 
     procedural requirements of rule 65 of the Federal Rules of 
     Civil Procedure.
       ``(2)(A) Upon a proper showing, the court shall enter an 
     order which shall--
       ``(i) remain in effect during pendency of the statutory 
     proceedings, any judicial review of such proceedings, or any 
     action to enforce orders issued under the proceedings; and
       ``(ii) direct the detention by the postmaster, in any and 
     all districts, of the defendant's incoming mail and outgoing 
     mail, which is the subject of the proceedings under sections 
     3005 and 3006.
       ``(B) A proper showing under this paragraph shall require 
     proof of a likelihood of success on the merits of the 
     proceedings under section 3005 or 3006.
       ``(3) Mail detained under paragraph (2) shall--
       ``(A) be made available at the post office of mailing or 
     delivery for examination by the defendant in the presence of 
     a postal employee; and
       ``(B) be delivered as addressed if such mail is clearly 
     shown not to be the subject of proceedings under sections 
     3005 and 3006.
       ``(4) No finding of the defendant's intent to make a false 
     representation or to conduct a lottery is required to support 
     the issuance of an order under this section.
       ``(b) If any order is issued under subsection (a) and the 
     proceedings under section 3005 or 3006 are concluded with the 
     issuance of an order under that section, any judicial review 
     of the matter shall be in the district in which the order 
     under subsection (a) was issued.''.

     SEC. 6. CIVIL PENALTIES AND COSTS.

       Section 3012 of title 39, United States Code, is amended--
       (1) in subsection (a) by striking ``$10,000 for each day 
     that such person engages in conduct described by paragraph 
     (1), (2), or (3) of this subsection.'' and inserting 
     ``$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.'';
       (2) in subsection (b) (1) and (2) by inserting after ``of 
     subsection (a)'' the following: ``, (c), or (d)'';
       (3) by redesignating subsections (c) and (d), as 
     subsections (e) and (f), respectively;
       (4) by inserting after subsection (b) the following:
       ``(c)(1) In any proceeding in which the Postal Service may 
     issue an order under section 3005(a), the Postal Service may 
     in lieu of that order or as part of that order assess civil 
     penalties in an amount not to exceed $25,000 for each mailing 
     of less than 50,000 pieces; $50,000 for each mailing of 
     50,000 to 100,000 pieces; with an additional $5,000 for each 
     additional 10,000 pieces above 100,000, not to exceed 
     $1,000,000.
       ``(2) In any proceeding in which the Postal Service 
     assesses penalties under this subsection the Postal Service 
     shall determine the civil penalty taking into account the 
     nature, circumstances, extent, and gravity of the violation 
     or violations of section 3005(a), and with respect to the 
     violator, the ability to pay the penalty, the effect of the 
     penalty on the ability of the violator to conduct lawful 
     business, any history of prior violations of such section, 
     the degree of culpability and other such matters as justice 
     may require.
       ``(d) Any person who violates section 3001(l) shall be 
     liable to the United States for a civil penalty not to exceed 
     $10,000 for each mailing to an individual.''; and
       (5) by amending subsection (e) (as redesignated by 
     paragraph (3) of this section) to read as follows:
       ``(e)(1) From all civil penalties collected in the 
     administrative and judicial enforcement of this chapter, 
     an amount equal to the administrative and judicial costs 
     incurred by the Postal Service in such enforcement, not to 
     equal or exceed $500,000 in each year, shall be--

[[Page S9967]]

       ``(A) deposited in the Postal Service Fund established 
     under section 2003; and
       ``(B) available for payment of such costs.
       ``(2) Except for amounts deposited in the Postal Service 
     Fund under paragraph (1), all civil penalties collected in 
     the administrative and judicial enforcement of this chapter 
     shall be deposited in the General Fund of the Treasury.''.

     SEC. 7. ADDITIONAL AUTHORITY FOR THE POSTAL INSPECTION 
                   SERVICE.

       (a) In General.--Chapter 30 of title 39, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 3016. Administrative subpoenas

       ``(a) Authorization of Use of Subpoenas by Postmaster 
     General.--In any investigation conducted under this chapter, 
     the Postmaster General may require by subpoena the production 
     of any records (including books, papers, documents, and other 
     tangible things which constitute or contain evidence) which 
     the Postmaster General finds relevant or material to the 
     investigation.
       ``(b) Service.--
       ``(1) Service within the united states.--A subpoena issued 
     under this section may be served by a person designated under 
     section 3061 of title 18 at any place within the territorial 
     jurisdiction of any court of the United States.
       ``(2) Foreign service.--Any such subpoena may be served 
     upon any person who is not to be found within the territorial 
     jurisdiction of any court of the United States, in such 
     manner as the Federal Rules of Civil Procedure prescribe for 
     service in a foreign country. To the extent that the courts 
     of the United States may assert jurisdiction over such person 
     consistent with due process, the United States District Court 
     for the District of Columbia shall have the same jurisdiction 
     to take any action respecting compliance with this section by 
     such person that such court would have if such person were 
     personally within the jurisdiction of such court.
       ``(3) Service on business persons.--Service of any such 
     subpoena may be made by a Postal Inspector upon a 
     partnership, corporation, association, or other legal entity 
     by--
       ``(A) delivering a duly executed copy thereof to any 
     partner, executive officer, managing agent, or general agent 
     thereof, or to any agent thereof authorized by appointment or 
     by law to receive service of process on behalf of such 
     partnership, corporation, association, or entity;
       ``(B) delivering a duly executed copy thereof to the 
     principal office or place of business of the partnership, 
     corporation, association, or entity; or
       ``(C) depositing such copy in the United States mails, by 
     registered or certified mail, return receipt requested, duly 
     addressed to such partnership, corporation, association, or 
     entity at its principal office or place of business.
       ``(4) Service on natural persons.--Service of any subpoena 
     may be made upon any natural person by--
       ``(A) delivering a duly executed copy to the person to be 
     served; or
       ``(B) depositing such copy in the United States mails, by 
     registered or certified mail, return receipt requested, duly 
     addressed to such person at his residence or principal office 
     or place of business.
       ``(5) Verified return.--A verified return by the individual 
     serving any such subpoena setting forth the manner of such 
     service shall be proof of such service. In the case of 
     service by registered or certified mail, such return shall be 
     accompanied by the return post office receipt of delivery of 
     such subpoena.
       ``(c) Enforcement.--
       ``(1) In general.--Whenever any person, partnership, 
     corporation, association, or entity fails to comply with any 
     subpoena duly served upon him, the Postmaster General may 
     request that the Attorney General seek enforcement of the 
     subpoena in the district court of the United States for any 
     judicial district in which such person resides, is found, or 
     transacts business, and serve upon such person a petition for 
     an order of such court for the enforcement of this section.
       ``(2) Jurisdiction.--Whenever any petition is filed in any 
     district court of the United States under this section, such 
     court shall have jurisdiction to hear and determine the 
     matter so presented, and to enter such order or orders as may 
     be required to carry into effect the provisions of this 
     section. Any final order entered shall be subject to appeal 
     under section 1291 of title 28. Any disobedience of any final 
     order entered under this section by any court may be punished 
     as contempt.
       ``(d) Disclosure.--Any documentary material provided 
     pursuant to any subpoena issued under this section shall be 
     exempt from disclosure under section 552 of title 5.''.
       (b) Regulations.--Not later than 120 days after the date of 
     enactment of this section, the Postal Service shall 
     promulgate regulations setting out the procedures the Postal 
     Service will use to implement this section.
       (c) Technical and Conforming Amendment.--The table of 
     sections for chapter 30 of title 39, United States Code, is 
     amended by adding at the end the following:

``3016. Administrative subpoenas.''.

     SEC. 8. REQUIREMENTS OF PROMOTERS OF SKILL CONTESTS OR 
                   SWEEPSTAKES MAILINGS.

       (a) In General.--Chapter 30 of title 39, United States Code 
     (as amended by section 7 of this Act) is amended by adding 
     after section 3016 the following:

     ``Sec. 3017. Nonmailable skill contests or sweepstakes 
       matter; notification to prohibit mailings

       ``(a) Definitions.--In this section, the term--
       ``(1) `promoter' means any person who originates and causes 
     to be mailed more than 500,000 mailings in any calendar year 
     of any skill contest or sweepstakes, except for mailings that 
     do not include an opportunity to make a payment or order a 
     product or service;
       ``(2) `removal request' means a written request stating 
     that an individual elects to have the name and address of 
     such individual excluded from any list used by a promoter for 
     mailing skill contests or sweepstakes;
       ``(3) `skill contest' means a puzzle, game, competition, or 
     other contest in which--
       ``(A) a prize is awarded or offered;
       ``(B the outcome depends predominately on the skill of the 
     contestant; and
       ``(C) a purchase, payment, or donation is required or 
     implied to be required to enter the contest; and
       ``(4) `sweepstakes' means a game of chance for which no 
     consideration is required to enter.
       ``(b) Nonmailable Matter.--
       ``(1) In general.--Matter otherwise legally acceptable in 
     the mails described under paragraph (2)--
       ``(A) is nonmailable matter;
       ``(B) shall not be carried or delivered by mail; and
       ``(C) shall be disposed of as the Postal Service directs.
       ``(2) Nonmailable matter described.--Matter that is 
     nonmailable matter referred to under paragraph (1) is any 
     matter that--
       ``(A) is a skill contest or sweepstakes; and
       ``(B)(i) is addressed to an individual who made an election 
     to be excluded from lists under subsection (e); or
       ``(ii) does not comply with subsection (c)(1).
       ``(c) Requirements of Promoters.--
       ``(1) Notice to individuals.--Any promoter who mails a 
     skill contest or sweepstakes shall provide with each mailing 
     a clear and conspicuous statement that--
       ``(A) includes the address and toll-free telephone number 
     of the notification system established under paragraph (2); 
     and
       ``(B) states how the notification system may be used to 
     prohibit the mailing of any skill contest or sweepstakes to 
     such individual.
       ``(2) Notification system.--Any promoter that mails a skill 
     contest or sweepstakes shall participate in the establishment 
     and maintenance of a single notification system that provides 
     for any individual (or other duly authorized person) to 
     notify the system of the individual's election to have the 
     name and address of the individual excluded from all lists of 
     names and addresses used by all promoters to mail any skill 
     contest or sweepstakes.
       ``(d) Notification System.--If an individual contacts the 
     notification system through use of the toll-free telephone 
     number provided under subsection (c)(1)(A), the system 
     shall--
       ``(1) inform the individual of the information described 
     under subsection (c)(1)(B); and
       ``(2) inform the individual that the election to prohibit 
     mailings of skill contests or sweepstakes to that individual 
     shall take effect 45 business days after receipt by the 
     system of the signed removal request by the individual.
       ``(e) Election To Be Excluded From Lists.--
       ``(1) In general.--An individual may elect to exclude the 
     name and address of such individual from all mailing lists 
     used by promoters of skill contests or sweepstakes by mailing 
     a removal request to the notification system established 
     under subsection (c).
       ``(2) Response after mailing removal request to the 
     notification system.--Not later than 45 business days after 
     receipt of a removal request, all promoters who maintain 
     lists containing the individual's name or address for 
     purposes of mailing skill contests or sweepstakes shall 
     exclude such individual's name and address from all such 
     lists.
       ``(3) Effectiveness of election.--An election under 
     paragraph (1) shall--
       ``(A) be effective with respect to every promoter; and
       ``(B) remain in effect, unless an individual notifies the 
     system in writing that such individual--
       ``(i) has changed the election; and
       ``(ii) elects to receive skill contest or sweepstakes 
     mailings.
       ``(f) Promoter Nonliability.--A promoter, or any other 
     person maintaining the notification system established under 
     this section, shall not be subject to civil liability for the 
     exclusion of an individual's name or address from any mailing 
     list maintained by a promoter for mailing skill contests or 
     sweepstakes, if--
       ``(1) a removal request is received by the notification 
     system; and
       ``(2) the promoter or person maintaining the system has a 
     good faith belief that the request is from--
       ``(A) the individual whose name and address is to be 
     excluded; or
       ``(B) another duly authorized person.
       ``(g) Prohibition on Commercial Use of Lists.--
       ``(1) In general.--
       ``(A) Prohibition.--No person may provide any information 
     (including the sale or rental of any name or address) in a 
     list described under subparagraph (B) to another person for 
     commercial use.
       ``(B) Lists.--A list referred to under subparagraph (A) is 
     any list of names and addresses (or other related 
     information) used, maintained, or created by the system 
     established under this section.
       ``(2) Civil penalty.--Any person who violates paragraph (1) 
     shall be assessed a civil penalty by the Postal Service not 
     to exceed $2,000,000 per violation.
       ``(h) Civil Penalties.--
       ``(1) In general.--Any promoter--
       ``(A) who recklessly mails nonmailable matter in violation 
     of subsection (b) shall be liable to the United States in an 
     amount of $10,000 per violation for each mailing of 
     nonmailable matter; or
       ``(B) who fails to substantially comply with the 
     requirements of subsection (c)(2) shall be liable to the 
     United States.

[[Page S9968]]

       ``(2) Enforcement.--The Postal Service shall assess civil 
     penalties under this section.''.
       (b) Technical and Conforming Amendments.--The table of 
     sections for chapter 30 of title 39, United States Code, is 
     amended by adding after the item relating to section 3016 the 
     following:

``3017. Nonmailable skill contests or sweepstakes matter; notification 
              to prohibit mailings.''.

       (c) Effective Date.--This section shall take effect 1 year 
     after the date of enactment of this Act.

     SEC. 9. STATE LAW NOT PREEMPTED.

       (a) In General.--Nothing in the provisions of this Act 
     (including the amendments made by this Act) or in the 
     regulations promulgated under such provisions shall be 
     construed to preempt any provision of State or local law that 
     imposes more restrictive requirements, regulations, damages, 
     costs, or penalties. No determination by the Postal Service 
     that any particular piece of mail or class of mail is in 
     compliance with such provisions of this Act shall be 
     construed to preempt any provision of State or local law.
       (b) Effect on State Court Proceedings.--Nothing contained 
     in this section shall be construed to prohibit an authorized 
     State official from proceeding in State court on the basis of 
     an alleged violation of any general civil or criminal statute 
     of such State or any specific civil or criminal statute of 
     such State.

     SEC. 10. EFFECTIVE DATE.

       Except as provided in section 8, this Act shall take effect 
     120 days after the date of enactment of this Act.
         Amend the title so as to read: ``A bill to amend chapter 
     30 of title 39, United States Code, to provide for the 
     nonmailability of certain deceptive matter relating to 
     sweepstakes, skill contests, facsimile checks, administrative 
     procedures, orders, and civil penalties relating to such 
     matter, and for other purposes.''.

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
hours for debate on S. 335, to be equally divided between the Senator 
from Maine and the Senator from Michigan or their designees.


                         Privilege Of The Floor

  Ms. COLLINS. Mr. President, I ask unanimous consent that the 
following members of my staff be granted the privilege of the floor 
during consideration of S. 335: Lee Blaylock and Michael Bopp.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LEVIN. If the Senator will yield for a similar request, I ask 
unanimous consent that Leslie Bell of my staff be granted the privilege 
of the floor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. COLLINS. Mr. President, I ask unanimous consent that at 5:10 
today Senator Edwards be allowed to speak for up to 10 minutes, with 
the time coming from the time controlled by the Senator from Michigan, 
that the Senator from Michigan be permitted to speak for 5 minutes 
following Senator Edwards, and that I be permitted to speak for 5 
minutes immediately prior to the 5:30 vote.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. COLLINS. I thank the Chair.
  Mr. President, I am pleased that the Senate is now considering S. 
335, the Deceptive Mail Prevention and Enforcement Act, legislation I 
authored along with my colleagues, Senator Levin, Senator Cochran, 
Senator Edwards, Senator Durbin, and Senator Specter.
  S. 335 is the product of an extensive investigation and 2 days of 
public hearings held by the Permanent Subcommittee on Investigations, 
which I chair. This legislation would establish for the first time 
tough new Federal standards for sweepstakes and other promotional 
mailings.
  For example, these mailings would be required to clearly inform 
consumers that a purchase is not necessary to win the contest and that 
a purchase will not increase their chances of winning. In addition to 
these important consumer protections, the bill confers additional 
investigative and enforcement authority on the U.S. Postal Service and 
authorizes civil fines of up to $2 million for companies that violate 
the consumer protection standards.
  This comprehensive measure has the support of the AARP, the National 
Consumers League, and the U.S. Postal Service.
  I particularly recognize the leadership roles played by several 
members of the committee. Senator Levin, in particular, has long been a 
leader in the effort to curtail deceptive mailings. Senator Cochran 
held some of the first hearings on this issue. Senator Edwards, Senator 
Specter, and Senator Durbin all contributed greatly to our 
investigation.
  Let me also express my appreciation for the assistance provided by 
the chairman of the Governmental Affairs Committee, Senator Thompson, 
and by the committee's ranking minority member, Senator Lieberman.
  In addition, I salute Senator Campbell, who was one of the first to 
call attention to the growing problems of deceptive sweepstakes 
mailings. Some of the provisions in our legislation are similar to 
those in a bill introduced by Senator Campbell.
  I first became aware of the growing problem of deceptive sweepstakes 
last year after receiving several complaints from my constituents in 
Maine. In order to learn more about this growing problem, the Permanent 
Subcommittee on Investigations began an investigation into the nature 
of deceptive mailings and the extent of sweepstakes and other 
promotional mailings. The subcommittee soon realized that the 
promotional mailing industry generates an enormous volume of mail that 
reaches the mailboxes of millions of Americans. In fact, the four major 
sweepstakes companies alone flood Americans with more than 1 billion 
solicitations every year.
  The subcommittee held 2 days of public hearings. At the first 
subcommittee hearing in March, we examined the practices of the four 
major sweepstakes companies: American Family Publishers, Publishers 
Clearinghouse; Time, Inc.; and Reader's Digest.
  I want to make clear that they all run legitimate sweepstakes, 
legitimate in the sense that they do award the prizes, they do deliver 
the merchandise orders, and they do not seek to conceal their 
identities. However, there is a critical distinction between running a 
legal contest and treating consumers fairly, without resorting to 
misleading or deceptive practices.
  Our hearings in March examined the key issue of whether consumers are 
being clearly informed that no purchase is necessary to enter 
sweepstakes and that buying something does not increase their chance of 
winning. That is the biggest misconception. Far too many consumers 
believe that if they make a purchase in response to the sweepstakes 
solicitation, they somehow improve their chances of winning. Nothing 
could be further from the truth. The subcommittee heard testimony 
indicating that the existing disclaimers used by the large sweepstakes 
companies are of very little value. They are too often deceptively 
worded or they are contradicted by the glowing promises in the 
promotional copy. In addition, they are hard to locate on the mailing, 
and they are often written in very tiny print that is difficult to 
read.

  Our hearings in March prompted over 1,000 letters from across the 
country to the subcommittee. Many of those letters included mailings 
from smaller sweepstakes companies with which the subcommittee had not 
been familiar. This public response prompted an expansion of the 
subcommittee's investigation into the deceptive practices of these 
smaller sweepstakes companies.
  Those smaller companies were the focus of the subcommittee's second 
hearing in July. Many of these smaller companies tend to be fly-by-
night operations that use multiple trade names to hide their identities 
and to confuse consumers. In fact, we found one company that sent out 
solicitations under 40 different trade names. That was obviously very 
confusing to consumers because they believed they were getting a chance 
to enter 40 different contests when, in fact, it was just one 
sweepstakes company using 40 different names.
  In some cases, these smaller companies are run by promoters for a 
year or two and then shut down. The operator then starts up a new 
company under yet another name, often one that is specifically chosen 
to lend credibility to the contest or to deceive consumers. These 
companies profit not only from their extremely deceptive mailings but 
also by reselling the names of their customers to other operators who 
then inundate the unlucky consumer with still more mailings. 
Unfortunately, our investigation suggests that this practice, this 
business, is quite lucrative.
  The smaller companies investigated by the subcommittee sent 
approximately 100 million mailings in 1998 and received over 4 million 
purchases, which we conservatively estimate cost consumers in the 
neighborhood of $40 million.

[[Page S9969]]

  In return, most individuals received a discount coupon book that was 
frequently followed by additional numerous other mailings urging 
consumers to purchase the exact same coupon book once again.
  Anonymity, as our hearings demonstrated, is crucial to the success of 
many of these small operators. They depend on working in the shadows 
and underneath the radar of State and Federal regulators. They are, in 
many ways, the ``stealth'' sweepstakes companies--difficult to detect, 
to track, and to stop. Our investigation discovered that most of these 
companies attempt to conceal their identities through multiple 
corporate names and various mailbox drops in several different States. 
Their mailings are often designed to deceive even the most cautious and 
wary consumer.
  Our investigation and hearings demonstrated that sweepstakes 
companies, both large and small, use deceptive and aggressive marketing 
techniques far too often to entice consumers into making purchases that 
they do not need or want, in the mistaken belief that a purchase will 
improve their chances of winning that grand prize. Indeed, we heard 
testimony that deceptive sweepstakes mailings can induce trusting 
consumers to purchase thousands of dollars of questionable merchandise. 
One example that was related to us by a witness was a magazine 
subscription extending to the year 2018 that had been purchased by her 
82-year-old father-in-law in response to repeated solicitations.
  The subcommittee found that many of our senior citizens are 
particularly vulnerable to such deceptive mailings. They come from 
perhaps a more trusting generation. Many seniors tend to believe what 
they read, particularly if it is endorsed by a trusted spokesman, such 
as Ed McMahon or Dick Clark, or if it comes from a well-known company, 
such as Reader's Digest or Time, or if it involves a mailing that 
appears to be official.
  At the subcommittee's hearings, family members told of loved ones who 
were so convinced that they had won a sweepstakes that they refused to 
leave their home for fear of missing the Prize Patrol. One of my 
constituents in Maine actually postponed needed surgery because she was 
absolutely convinced that that was going to be the day her winnings 
were delivered to her.
  The subcommittee investigated many cases of seniors who, enticed by 
the bold promises in deceptive sweepstakes, actually spent their Social 
Security checks, squandered their life's savings, and even borrowed 
money in order to continue to make purchases through these sweepstakes 
mailings. I will never forget one of our witnesses who actually broke 
down in tears before the subcommittee as he recounted how he had been 
enticed to spend $15,000 on merchandise he did not want because he 
thought it would bring him closer to winning millions of dollars.
  Time and again, family members have described sweepstakes companies 
literally bombarding elderly relatives with repeated mailings. Our 
witnesses explained that their elderly family members spent thousands 
of dollars in the vain hope that if they just bought one more trinket, 
or one more videotape, or one more magazine subscription, it would 
greatly improve their chances of winning. Of course, it never did.
  The losses suffered by consumers could not, however, be measured in 
dollars alone. As one elderly gentleman put it:

       My wife has finally come to realize that she has been duped 
     by the sweepstakes solicitations for all these years. 
     Although the financial drain is now halted, the loss of 
     her dignity is incalculable.

  Unfortunately, these are not isolated examples. According to a recent 
survey commissioned by the AARP, nearly 40 percent of seniors surveyed 
believed there was a connection between purchasing and winning, that 
either making a purchase would help you to win or it would ensure that 
you would win a prize.
  You have only to look at some of these sweepstakes mailings to 
understand why consumers draw these conclusions. For example, one 
mailing by Publishers Clearinghouse, which is famous for its Prize 
Patrol, tells consumers to ``open your door to $31 million on January 
31.'' You can see the personalized mailing, although we blocked out the 
name of the person involved. This mailing clearly suggests to the 
consumer that his or her--her in this case--purchases are paying off. 
It specifically states:

       You see, your recent order and entry has proven to us that 
     you're indeed one of our loyal friends and a savvy 
     sweepstakes player. And now I'm pleased to tell you that 
     you've passed our selection criteria to receive this special 
     invitation. . . .

  Mr. President, this is clearly and blatantly designed to deceive the 
consumers into drawing a connection between making a purchase and 
winning the prize.
  Let me show you another example. The next example is a mailing from 
American Family Publishers. It states:

       It's down to a 2 person race for $11 million--you and one 
     other person in Georgia were issued the winning number. 
     Whoever returns it first wins it all.

  Most people don't see the very fine print that declares:

       . . . if you have the winning number.

  Unless the contestant reads and understands this fine print, the 
mailing leaves the unmistakable impression that this recipient, this 
lucky person, and one other person, have the winning number for the $11 
million prize.
  This mailing actually caused a number of contestants to fly to 
Florida in the hope that their entry would be received first. After 
all, it says, ``Whoever returns it first wins it all.'' It also 
prompted lawsuits by several States' attorneys general, and American 
Family Publishers eventually agreed to a multistate settlement.
  I wish the misleading mailings from the largest sweepstakes companies 
represented the worst of the lot. Unfortunately, they do not. Let's 
take a look at a couple of examples of deceptive practices of some of 
the smaller sweepstakes companies. As you will recall, these were the 
companies that were brought to the subcommittee's attention by outraged 
consumers from across this country who wrote to us after our first 
round of hearings.
  This solicitation, or promotion, from Mellon, Astor & Fairweather is 
a deceptive attempt to make the consumer think that a prestigious 
firm--presumably an accounting firm--is ready to give him or her money. 
Despite describing Mellon, Astor & Fairweather as the ``trustee of 
record,'' the sponsor of this mailing admitted under oath to the 
subcommittee that Mellon, Astor & Fairweather is not a trustee for any 
group or individual. In fact, there is no ``Mellon,'' ``Astor,'' or 
``Fairweather'' associated with this company. The name was completely 
made up to give an air of legitimacy and credibility to this mailing--
in short, to deceive people. Moreover, the sweepstakes promoter 
admitted that this is actually the address of a Mail Boxes, Etc., and 
that the company's offices are located not in Lake Forest, IL, but in 
Las Vegas, NV.

  Another problem the subcommittee found was the use of words or 
symbols that give the impression that the mailing is connected with the 
Federal Government. Here is another example of this kind of mailing. It 
says at the top--it is hard to read: The Official United Sweepstakes of 
America.
  Yes, this mailing implies a Government connection to the sweepstakes. 
It includes a photo of the U.S. Treasury building, and by using the 
address of 611 Pennsylvania Avenue, Southeast, Washington, DC, it 
sounds like a very prestigious Pennsylvania Avenue address of a Federal 
agency. In fact, once again, this is an address of a Mail Boxes, Etc. 
And, of course, the Federal Government does not sponsor sweepstakes, 
contrary to the implication of this mailing.
  Yet another deceptive mailing shows how fraudulent operators link 
their company to the Government. This is a blowup of a postcard sent to 
me by a constituent from Machiasport, ME. As you can see, it is marked 
``Urgent Delivery, A Special Notification of Cash Currently Being Held 
By the U.S. Government is Ready for Shipment to You.'' It mimics the 
typical postcard the Postal Service uses. It is designed to look like 
that.
  The mailing asks the consumer to send $9.97 to learn how to receive 
this cash. Of course, this was not in any way a legitimate postcard 
from the Federal Government. It was merely a ploy used by an 
unscrupulous promoter to trick an unsuspecting consumer into sending 
money. Fortunately, my consumer did not fall for this scam. But

[[Page S9970]]

many others did, leading the Postal Service to bring action against the 
promoter of this scam.
  Sadly, these are just a few of the many examples of deceptive 
mailings that the subcommittee uncovered during its investigation. The 
simple fact is that far too many consumers regularly fall victim to 
increasingly deceptive and sophisticated marketing techniques used in 
these mailings.
  I want to emphasize that sweepstakes can, of course, be a legitimate 
marketing technique. While I have concerns about the deceptive nature 
of far too many sweepstakes mailings, I don't want to give the 
impression that all sweepstakes are deceptive, or that they should be 
outlawed. Our legislation is setting clear standards for them to follow 
to avoid the kind of deception that we found to be rampant in the 
industry.
  Let me outline the major provisions of the legislation before the 
Senate today.
  First, S. 335 requires sweepstakes mailings to clearly 
and conspicuously display several important disclaimers and consumer 
notices, including a clear statement that no purchase is necessary to 
win the contest, and, most of all, a statement that a purchase will not 
improve your chances of winning.

  I think that is the most important disclaimer of all.
  These statements have to appear in three places--on the solicitation, 
in the rules, and on the order form.
  In addition, the mailings must state the odds of winning, the value 
and the nature of the prize, and the name and the address of the 
sponsor of the sweepstakes. Sweepstakes mailings would also be required 
to include all the rules and entry procedures for the contest. The bill 
would prohibit mailings from describing the recipient as a ``winner'' 
unless the recipient has really won a prize.
  You can see from some of the mailings that we have discussed here 
today why that protection is so important.
  Second, this legislation includes the provision drafted by Senator 
Edwards to require companies sending sweepstakes or skill contests to 
establish a system that will allow consumers to request that they be 
removed from sweepstakes mailing lists. Companies sending sweepstakes 
mailings must include either a toll-free number or the address at which 
the consumer may request that their name be removed altogether from 
future sweepstakes mailings. Companies would be required to remove such 
individuals from sweepstakes lists within 35 days.
  Our hearings showed that far too many consumers had great difficulty 
in turning off the spigot of sweepstakes mailings to themselves, or, as 
was often the case, to an elderly family member. Senator Edwards' 
provision will assist consumers who want relief from the flood of 
solicitations.
  Third, our legislation strengthens the current law regarding 
``Government look-alike'' mailings by prohibiting mailings that imply a 
connection to, approval, or endorsement by the Federal Government 
through the misleading use of a seal, insignia, reference to the 
Postmaster General, citation to a Federal law, or any other term or 
symbol unless the mailings carry true disclaimers.
  The bill imposes new Federal standards for facsimile checks that are 
sent in any mailing. These tests must include a statement on the check 
itself stating that it is non-negotiable and has no cash value.
  Finally, S. 335 will strengthen the ability of the Postal Service to 
combat deceptive mailings. Under existing law, the Postal Inspection 
Service does not possess subpoena authority, is unable to obtain a 
judicial order to stop the deceptive mailing at multiple mailboxes in 
different States, and may only seek financial penalties after a company 
has violated a previously imposed order for sending deceptive mailings.
  Our legislation grants the Postal Service subpoena authority, 
nationwide stop mail authority, and the ability to impose strong civil 
penalties for the first violation. At our hearings in July, the Postal 
Service testified that civil penalties would be a significant deterrent 
against deceptive mailings. We can't just have minor penalties that are 
treated as a cost of doing business. The penalties under our 
legislation can reach as high as $1 million, and, if a company violates 
an order, that penalty is doubled and can range as high as $2 million.
  The current penalties--capped at $10,000 per day--are simply 
inadequate to deter deceptive mailings, especially since they can only 
be imposed after the mailer has evaded or failed to comply with a prior 
order.

  Our bill recognizes the important role played by the States in 
investigating and prosecuting deceptive mailings. We do not preempt any 
provision of State or local law. In many instances, it is the States 
that have taken the strong action against deceptive sweepstakes 
mailings largely because of the gap in Federal law. During our 
investigation, we worked very closely with the National Association of 
Attorneys General.
  I would like to close my initial statement by urging my colleagues to 
support S. 2335, the Deceptive Mail Prevention and Enforcement Act, so 
that the Senate, by passing this legislation later today, can take an 
important first legislative step in curtailing deceptive sweepstakes 
and protect the American consumer.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. LEVIN. Mr. President, I thank the Senator from Maine for her 
tremendous leadership on this issue and so many other consumer 
protection issues. She is leading the Permanent Subcommittee on 
Investigations with tremendous distinction, with great strength, and 
the consumers of this Nation are all better off because of that 
leadership. This bill is a further example of that leadership. I am 
proud to be her principal cosponsor of the bill that we have worked on 
for so long.
  Sweepstakes for many Americans has become a cruel joke. Americans are 
overwhelmed with sweepstakes solicitations in the mail that deceptively 
appear to promise large winnings but deliver only empty appeals for 
purchases of unneeded products and more entries into additional 
sweepstakes.
  The majority of Americans may have a healthy skepticism about these 
solicitations and don't believe the misleading representations. But 
many are not so disbelieving, and they can get caught up and do get 
caught up in a spiral of financial and emotional trauma.
  The subcommittee heard story after story before of seniors 
particularly, some of the most vulnerable people in America, who 
receive these mailings and believe that they have been awarded a prize.
  Several of my constituents from Michigan lost tens of thousands of 
dollars to sweepstakes solicitations.
  One woman in Grand Rapids spent over $12,000 in one year with 
Reader's Digest alone.
  A woman in the Upper Peninsula of Michigan spent $30,000 in less than 
a month on sweepstakes-related promotions.
  Sweepstakes solicitations are big business. Companies using 
sweepstakes to promote their products, be it magazines or coupon books, 
or jewelry, send over a billion pieces of mail a year to American 
consumers.

  We learned that one person could get from one company alone as much 
as 144 different pieces of sweepstakes mail in a year. That was from a 
so-called ``legitimate company.''
  Purchases through these types of mailings are in the billions of 
dollars. Sweepstakes are used as the ``come-on'' to get the recipient 
to purchase a product or make a contribution. They are used, companies 
say, to get the recipients to open the envelopes, and, once opened, 
used to get the person to respond with a purchase or contribution. 
Promoters argue that sweepstakes entrants buy these products because 
they want them or need them.
  Our investigation demonstrated that many people who enter these 
sweepstakes purchase items only because they think doing so will 
improve their chances of winning the sweepstakes prize. A large number 
buy and buy and buy, spending tens of thousands of dollars, with that 
expectation that the purchase of items will help improve their chances 
of winning.
  Companies are not allowed by law to use the U.S. mails to conduct a 
lottery. A lottery is where payment must be given in order to have a 
chance to win. It is illegal for a sweepstakes promotor to require a 
purchase in order for a person to have a chance to win or to improve a 
person's chances of winning.

[[Page S9971]]

 Buying something when entering a sweepstakes cannot, by law, do 
anything to improve a person's chances of winning. Many people don't 
know that or believe a purchase will improve their chance and many 
sweepstake companies try to leave the impression that buying something 
will give that recipient an advantage.
  Sweepstake companies encourage this in many ways. For example, some 
use different envelopes for those who buy a product and those who 
don't. Here is an example from Reader's Digest. They send two 
envelopes. If a person orders something, the envelope says: Yes, Reward 
Entitlement [underlined], Granted and Guaranteed. If a person does not 
order something, the envelope says: No Reward Entitlement, Denied and 
Unwarranted.
  They go to different post office boxes, clearly leaving a very 
different impression. It is a very strong different impression and a 
very deceptive different impression.
  Other sweepstake companies use their own envelope and address card 
for those entering the sweepstake without purchasing a product. In 
another sweepstakes, they are given an envelope if they want to buy 
something; if they don't want to buy something but still enter, they 
have to fill out their own envelope or their own card, which is much 
more difficult than if they are simply buying a product.

  Some companies try to confuse the message, leaving the recipient to 
believe he has to pay a fee to collect a prize that he has already won. 
This certificate from the ``Motor Vehicle Awards'' states: [You] are 
guaranteed to receive a brand-new automobile or a cash award.
  The first envelope has the name of the person receiving it, so it is 
very personalized: [Mr. or Miss Someone] are guaranteed to receive a 
brand-new automobile or cash award.
  They ask the recipient to confirm that his name is spelled correctly 
on the certificate and to indicate how he wants the car delivered. In 
the very last paragraph it says: In addition, an optional commodities 
package with a fully redeemable value of over $2,500 is being held 
pending your submission of the standard acquisition fee.
  The impression is that the recipient has won a car, that all he has 
to do is return the certificate for the car, and pay an acquisition 
fee. Of course, the impression they attempt to create--and often do, 
according to our testimony--is that acquisition fee relates to the car.
  If he does that, the impression is he will receive a car and the 
commodities package. That is a pretty good bargain, at $14.98 for a car 
and commodities package. In reality, this is a sales promotion for the 
commodities package connected to a sweepstake. The acquisition fee of 
$14.98 is buying the commodities package. The commodities package is 
nothing more than a booklet of coupons that require buying items in 
order to redeem the coupons.
  One must spend thousands and thousands and thousands of dollars for 
items that you don't need in order to receive the savings that are 
promised. Yet we learned at our hearings this is a very common 
sweepstakes scheme. Honest businesses don't engage in these practices, 
or they shouldn't. Over and over we heard from victims of the deceptive 
sweepstakes packages that they thought they had to buy something to 
receive the big prize or to improve their chances of winning. The 
sweepstake companies are very artful at creating this impression. This 
is about stringing people along. Often the people being strung along 
are the most vulnerable.
  This is a promotion from Reader's Digest to a constituent of mine 
whose house is filled to the brim with tapes, books, CDs, and magazines 
she bought believing it would help her get the prize. This is a 
Certificate of Recognition for her loyalty to Reader's Digest: Dear 
valued customer: You've been selected to receive one of our highest 
honors--the Reader's Digest Recognition Reward. It's your obvious love 
of Reader's Digest and sweepstakes that made you an ideal candidate. In 
fact, it was your recent subscription request that finalized our 
decision.
  In other words, keep buying and we will keep sending opportunities to 
win a sweepstake. It is buying the Reader's Digest that they are saying 
gets the special treatment. What is the Reader's Digest Recognition 
Award? It is a little stick 'em label that is pulled off this letter 
that has my constituent's name on it so she can paste it on any article 
of furniture around her house. It really is a come-on, an opportunity 
to enter yet another sweepstake. That is the award, a little stick 'em 
that Mrs. Roosenberg got for spending over $12,000 in 1 year for 
products she didn't even open, filling up her house.

  Through the artful placement of words and graphics, the sweepstakes 
companies make the reader believe they have won. They use such large 
screaming headlines: [Mr. X] is Officially Declared $833,337 Winner.
  A big headline you can't miss. However, one misses the fine print 
that says, no, you haven't--only if you held the right number. What 
jumps out is the headline that you have won.
  Our sweepstakes promoters try to make their envelopes look special, 
not like the bulk mail which they are, or try to make them look like a 
Government document, or even in the case of a recent Publishers 
Clearinghouse envelope, as if they were photographs that the recipient 
paid to have developed. This envelope looks exactly like envelopes 
received from the photo store. In fact, this is one of these sweepstake 
offers from Publishers Clearinghouse.
  We cannot control each and every trick that a company uses to get the 
recipient of a sweepstakes promotion to buy something. However, there 
are some things we can and we should insist upon. We can insist that 
the companies state clearly and conspicuously that buying something 
will not improve a person's chances of winning. We can insist that 
these companies state clearly and conspicuously that you don't need to 
buy anything to win. We can make these companies state clearly and 
conspicuously what are the odds of winning. In many cases, the odds are 
nearly 1 in 100 million or 1 in 150 million. We can also require the 
sweepstake promoters not tell a person they have won if they haven't 
and not use devices to suggest that the mail is from a Government 
agency. That will hopefully alert the folks receiving the sweepstakes 
promotion and will help them think twice before buying items they 
really do not want and do not need.
  In the last Congress, several of our colleagues joined in sponsoring 
a bill to increase enforcement of deceptive mailings by the Postal 
Service. This, year Senator Collins held hearings on sweepstakes and 
other forms of deceptive mail. We have introduced two bills to try to 
eliminate deceptive sweepstakes practices. Senator Collins' bill is S. 
335; my bill is S. 336. We learned during the hearings that the 
financial costs to consumers for deceptive and fraudulent sweepstakes 
is a serious problem and one that particularly plagues our senior 
citizens. We learned that the Postal Service has inadequate law 
enforcement tools to effectively shut down deceptive direct marketers 
who use deceptive sweepstakes promotions to sell their products. We 
also learned that the Postal Service can't impost a fine against such a 
promoter until the Postal Service has issued a stop order, and the stop 
order has been violated. Wily promoters craft their mailing so that it 
technically complies with a particular stop order but is this 
deceptive? Thus, time and time again these promoters continue to prey 
on Americans, and the postal Service has been all but powerless to stop 
them.

  The bill before us is a combination of our two bills. It establishes 
a special provision in law for deceptive sweepstakes mailings, requires 
certain disclosures to be clearly and conspicuously displayed in key 
parts of the sweepstakes promotion; prohibits other misleading and 
deceptive statements in the promotion; gives the Postal Service 
additional enforcement tools, and requires sweepstakes promoters to 
provide a mechanism for a recipient of mail to remove his or her name 
off a mailing list if requested.
  Mr. President, what is the time situation?
  The PRESIDING OFFICER. These are 34\1/2\ minutes remaining on the 
Senator's side.
  Mr. LEVIN. I yield myself 10 additional minutes.
  Three key provisions in S. 336 have been incorporated into the 
substitute. First, to prevent unscrupulous mailers from duping people 
into believing that a purchase will increase their chances

[[Page S9972]]

of winning, the bill requires that a statement that a purchase will not 
increase an individual's chances of winning be clearly and 
conspicuously displayed in a prominent place and manner in the mailing, 
in the rules, and on the order or entry form.
  I believe of all of the new requirements and standards, this is 
perhaps the most important. The statement that a purchase will not 
increase an individual's chances of winning must not only be clearly 
and conspicuously displayed but also displayed in a prominent place and 
manner in the mailing, in the rules, and on the order or entry form. 
Such a statement will, hopefully, help readers dissociate the ordering 
process from the sweepstakes entry.
  Second, it provides the Postal Service with the authority to issue a 
civil penalty for a first-time violation of the statute. This means the 
Postal Service does not have to first issue a stop order and then wait 
for that order to be violated before assessing civil penalties. This 
has the effect of applying the penalty to the deceptive offense, not 
for noncompliance with the order. It makes enforcement a one-step 
instead of a two-step process. Third, it gives the Postal Service the 
subpoena authority it often needs to help identify sweepstakes scams.
  Despite the specificity of the disclosures required under the bill, I 
remain quite concerned that the disclosures be noticeable and 
understandable to the reader. That is why the bill requires all 
disclosures to be clearly and conspicuously displayed. With a managers' 
amendment, we define ``clearly and conspicuously displayed'' in the 
bill so that there can be no misunderstanding by the Postal Service and 
the direct mail industry as to what we mean. Furthermore, two critical 
disclsoures--``no purchase necessary'' and ``a purchase will not 
increase an individual's chances of winning''--are required to be not 
only ``clearly and conspicuously displayed'' but ``prominently'' 
displayed as well. This means that these two diclsoures must be highly 
visible to and easily noticeable by the reader. These important 
messages will not be allowed to be hidden or disguised through 
illegible print size, glitzy displays which detract from the 
disclosure, or barely noticeable ink color.
  The Deceptive Mail Prevention and Enforcement Act of 1999 takes a 
tough approach to dealing with sweepstakes solicitations and other 
games of chance offerings that are sent through the mail. If you use 
sweepstakes or a game of chance to promote the sale of a legitimate 
product, provide adequate disclosure, and abide with Postal Service 
regulations, then the Postal Service will deliver that solicitation 
without any interruption. If deceptive practices are used in a 
sweepstakes or game of chance solicitation, the Postal Service will be 
able to stop the solicitation and impose a significant penalty.
  I again thank Senator Collins again for her hard work and commitment 
to consumers in this legislation. I also thank Senator Cochran for his 
early support and Senator Edwards for his excellent work on the 
provision requiring a delisting of persons not wanting to receive 
sweepstakes mailings. Finally, I want to thank the staff of the 
Permanent Subcommittee on Investigations for the terrific job they did 
putting together the hearings and developing this legislation. In 
particular I want to thank Linda Gustitus and Leslie Bell of the 
minority staff, Lee Blaylock and Kirk Walder of the majority staff, and 
Maureen Mahon of Senator Edwards' staff.
  I reserve the remainder of our time as Senator Collins has indicated, 
and I yield the floor.
  The PRESIDING OFFICER. For the Senator's information, the Senator 
from Michigan has 29 minutes remaining. The Senator from Maine has 35 
minutes.
  Ms. COLLINS. Mr. President, first I thank my colleague from Michigan 
for his very generous comments. Also, once again I commend his 
outstanding leadership on this issue. It has been terrific working with 
him in a variety of areas related to consumer protection. We are where 
we are today because of his efforts.
  I also echo the thanks to our staff who have done a tremendous job.


                         Privilege Of The Floor

  I do ask unanimous consent the privilege of the floor be granted to 
the following members of my staff during the pendency of this 
legislation: R. Emmett Mattes, Kathy D. Cutler, and Deirdre Foley.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. COLLINS. Mr. President, it is now my great pleasure to yield to 
the Senator from Mississippi, who is the chairman of the Subcommittee 
on Governmental Affairs with jurisdiction over the Postal Service. 
Senator Cochran held the very first hearings on deceptive mailings last 
year. He has been a tremendous supporter of the effort to curtail 
deceptive mailings. I really appreciate his leadership on this issue.
  The PRESIDING OFFICER. The Senator from Mississippi.
  Mr. COCHRAN. Mr. President, I am pleased to be a cosponsor and to 
support the passage of the Deceptive Mail Prevention and Enforcement 
Act, S. 335. This legislation would establish new safeguards to protect 
consumers against deceptive and dishonest sweepstakes and other 
promotional mailings. The bill grants additional investigative and 
enforcement authority to the U.S. Postal Service to stop deceptive 
mailings, and it establishes standards for all sweepstakes mailings by 
requiring certain disclosures on each mailing.

  In the last Congress, our subcommittee examined the use of mass mail 
to deceive and defraud consumers. At the subcommittee's hearing, we 
heard how sweepstakes and other promotions were causing individuals to 
make unwanted or excessive purchases in the hope that the purchases 
would increase their chances of winning money or other prizes. Since 
conducting that hearing, the subcommittee has been flooded with stories 
from consumers all over the country who have lost thousands of dollars 
in some cases--sometimes their life savings--to deceptive mailing 
practices. But it is not just sweepstakes offers that deceive 
consumers. Some mailers imply an association with the Government, often 
enticing consumers to pay unnecessary fees.
  This bill will address several types of deceptive mailings, including 
sweepstakes and Government look-alike mailings.
  First, it will require sweepstakes mailings to display a statement 
that no purchase is necessary to enter the contest and that a purchase 
will not improve the chances of winning. Other disclosures will also be 
required, including the sponsor of the sweepstakes and the principal 
place of business or an address at which the sponsor can be reached, 
and the estimated odds of winning each prize and the estimated value of 
each prize. In addition, all terms and conditions of the sweepstakes 
promotion, including the rules and entry procedures for the 
sweepstakes, will be required on each mailing.
  Second, the bill will expand the authority of the U.S. Postal Service 
by granting the Postal Inspection Service subpoena authority, 
nationwide stop-mail authority, and the ability to impose civil 
penalties of up to $1 million for the first offense and $2 million for 
a violation of an existing order.
  Finally, the bill will strengthen existing law regarding Government 
look-alike mailings by requiring disclaimers on any mailings that might 
be interpreted as implying a connection to the Federal Government.
  This legislation was reported out of the Subcommittee on 
International Security, Proliferation and Federal Services on April 12 
and reported unanimously by the Committee on Governmental Affairs on 
May 20. It has the support of the U.S. Postal Service, a number of 
consumer groups, and the American Association of Retired Persons.
  I commend the work of the distinguished Senator from Maine, Ms. 
Collins, in crafting this legislation to curb deceptive mailings. As 
chair of the Permanent Subcommittee on Investigations, Senator Collins 
has thoroughly examined the issue, and I applaud her important efforts 
in developing this bill and her continuing efforts to protect 
consumers. The distinguished ranking minority member of the committee, 
Senator Levin, has also supported this initiative, and we appreciate 
his assistance.
  This bill takes an important step toward the prevention of deception 
in sweepstakes and other promotional mailings. I urge Senators to 
support it.
  The PRESIDING OFFICER (Mr. Voinovich). The Senator from Maine.

[[Page S9973]]

  Ms. COLLINS. Mr. President, I thank the Senator from Mississippi for 
his very kind comments and for his strong support of this initiative. 
He has been a partner throughout this investigation into deceptive 
mailings, and I am very grateful for his support.


             different promotions for the same sweepstakes

  Mr. LEVIN. Mr. President, during the July 1999 hearing on deceptive 
mail held by the Permanent Subcommittee on Investigations, several 
promoters testified that they use different business names and 
different stationery to send to the same people different-looking 
mailings to promote the same sweepstakes. So, for example, on day one, 
a person can get a solicitation to enter a $10,000 sweepstakes, and the 
solicitation says on the top that ``Company Blue'' is making the offer. 
In the rules it says ``your chances of winning are 1 in 3 million.'' 
Let's say you enter that sweepstakes. One week later you get another 
solicitation for a $10,000 sweepstakes.
  And we learned that the standard operating procedure for this type of 
sweepstakes is to send 5 or 6 mailings for the same sweepstakes after 
the person responds to the first mailing.
  So on this second mailing, it says ``Company Red'' at the top and the 
materials look totally different from the ``Company Blue'' promotions. 
The rules of this second solicitation also say you have a 1 in 3 
million chance of winning $10,000, which a reasonable person would 
think is a completely different sweepstakes. That's also what the 
promoter wants you to think. So you think you have a chance of winning 
$20,000 in total. But, you don't. The most you can win is $10,000.
  I believe these mailings are misrepresenting the facts, and under 
existing law these misrepresentations are deceptive. For example, in 
the ``Company Blue'' and ``Company Red'' scenario I just described, the 
promoter wants you to think that you're receiving two separate 
solicitations, each involving two separate sweepstakes. In fact, the 
solicitations for ``Company Blue'' and ``Company Red'' are for the same 
sweepstakes and thus you can win only once. Section 3005 of title 39 
currently allows the Postal Service to deny delivery of mail used as 
part of a scheme to obtain money through the mail by means of false 
representations. Clearly many sweepstakes promoters use different 
business names and different stationery to make you think their 
multiple solicitations are unique and have no relationship to each 
other.
  Does the Senator from Maine agree that these multiple mailing schemes 
mislead people into thinking they are entering separate contests from 
different companies?
  Ms. COLLINS. Yes, I agree with the Senator from Michigan. The 
practice of using different-looking promotional mailings without any 
information explaining that they are for the same sweepstakes serves no 
purpose except to lead recipients into believing that they are 
different sweepstakes. Once the recipient believes that they are 
different sweepstakes, the recipient who believes that a purchase 
either is required or will confer an advantage upon them will then 
believe that a separate purchase must be made for each unique-looking 
sweepstakes. Because these different-looking mailings do not clearly 
state that they are promoting the same sweepstakes, I agree with the 
Senator from Michigan that they can be deceptive.


                     use of the word ``prominent''

  Mr. LEVIN. Mr. President, our bill requires a sweepstakes or skill 
contest promotion, in order to be mailable matter, to contain a number 
of specific disclosures. Each of the disclosures required by the bill 
must be ``clearly and conspicuously displayed.'' We have defined that 
term in the bill to mean ``readily noticeable, readable, and 
understandable.'' This is a definition consistent with the definition 
used by the Federal Trade Commission.
  Two of the required disclosures--that no purchase is necessary to win 
and that purchasing does not improve your chances of winning--are so 
important to giving a consumer the information he or she needs to 
decide whether or not to enter a sweepstakes and if so, whether or not 
to purchase an advertised product--that they should appear prominently 
in three places in each mailing. Our addition of the term 
``prominently'' to these two disclosures is intended to emphasize the 
heightened significance of these disclaimers. This means that these two 
disclosures must be highly visible and highly noticeable to the reader. 
In Edgeworth v. Fort Howard Paper Co., 673 F. Supp. 922, 923 (N.D. Ill. 
1987), rev. on other grounds, 683 F. Supp. 1193 (1988), the District 
Court defined ``prominent and accessible place'' to mean that the 
message conveyed can readily be observed by the people for whom it is 
intended. In Allstate Insurance Co. v. Clemmons, 742 F. Supp. 1073, 
1075 (D.NV 1990), the District Court defined ``prominently displayed'' 
to mean ``the message must have greater prominence than the balance of 
the policy language. . . . In other words, a clause attains prominence 
by being different from its surrounding terms.'' ``Prominently'' 
requires, for purposes of our bill, making the two disclosures to which 
``prominently'' applies different from other messages in appearance, 
manner of presentation, and location. These two disclosures must stand 
out from the rest of the printed material on the three locations where 
they are required to appear.
  One can argue that there is going to be some subjectivity in deciding 
whether a statement is prominently placed in a promotion or not. Our 
intention here is to provide the Postal Service with enough guidance to 
ensure that when it comes to these two disclosures, there should be no 
close calls. These two disclosures should be obviously clearly and 
conspicuously displayed in a prominent manner and location.
  Does the Senator from Maine agree with my description?
  Ms. COLLINS. Yes, I do. Of the several disclosures we require to be 
included in a mailing containing a sweepstakes or skill contest 
promotion, these two disclosures--that no purchase is necessary and 
that purchasing does not improve your chances of winning--are 
particularly important for the reader to see in a prominent way. The 
statements themselves should be clear and conspicuous, as required by 
the bill, and they should be prominent in three places in each mailing, 
so it would be very difficult for a recipient not to notice them.
  A number of sweepstakes and skill contest promoters currently include 
in their mailings the statement that no purchase is necessary. But this 
is often included only as a part of a lengthy set of rules or buried in 
other statements and notices that allow it to be easily overlooked. 
That is why our managers' amendment includes the requirement that these 
two statements be prominent, and clearly and conspicuously displayed. I 
thank the Senator from Michigan for his assistance on this issue.


                           Amendment No. 1497

              (Purpose: To provide a managers' amendment)

  Ms. COLLINS. Mr. President, I send to the desk the managers' 
amendment.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Maine [Ms. Collins], for herself and Mr. 
     Levin, proposes an amendment numbered 1497.

  Ms. COLLINS. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 19, insert between lines 22 and 23 the following:
       ``(A) `clearly and conspicuously displayed' means presented 
     in a manner that is readily noticeable, readable, and 
     understandable to the group to whom the applicable matter is 
     disseminated;
       On page 19, line 23, strike ``(A)'' and insert ``(B)''.
       On page 20, line 1, strike ``(B)'' and insert ``(C)''.
       On page 20, line 9, strike ``(C)'' and insert ``(D)''.
       On page 20, line 21, insert ``prominently'' after ``that''.
       On page 21, line 1, insert ``prominently'' after ``that''.
       On page 21, lines 4 and 5, strike ``an entry from such 
     materials'' and insert ``such entry''.
       On page 21, lines 8 and 9, strike ``, in language that is 
     easy to find, read, and understand''.
       On page 21, line 15, strike ``clearly''.
       On page 22, line 5, insert ``or'' after the semicolon.
       On page 22, line 11, strike ``or'' after the semicolon.
       On page 22, strike lines 12 through 17.

[[Page S9974]]

       On page 22, lines 23 and 24, strike ``, in language that is 
     easy to find, read and understand''.
       On page 23, line 1, strike ``clearly and conspicuously''.
       On page 23, line 6, strike ``clearly''.
       On page 34, line 1, strike all through page 39, line 23, 
     and insert the following:

     SEC. 8. REQUIREMENTS OF PROMOTERS OF SKILL CONTESTS OR 
                   SWEEPSTAKES MAILINGS.

       (a) In General.--Chapter 30 of title 39, United States Code 
     (as amended by section 7 of this Act) is amended by adding 
     after section 3016 the following:

     ``Sec. 3017. Nonmailable skill contests or sweepstakes 
       matter; notification to prohibit mailings

       ``(a) Definitions.--In this section, the term--
       ``(1) `promoter' means any person who--
       ``(A) originates and mails any skill contest or 
     sweepstakes, except for any matter described under section 
     3001(k)(4); or
       ``(B) originates and causes to be mailed any skill contest 
     or sweepstakes, except for any matter described under section 
     3001(k)(4);
       ``(2) `removal request' means a request stating that an 
     individual elects to have the name and address of such 
     individual excluded from any list used by a promoter for 
     mailing skill contests or sweepstakes;
       ``(3) `skill contest' means a puzzle, game, competition, or 
     other contest in which--
       ``(A) a prize is awarded or offered;
       ``(B) the outcome depends predominately on the skill of the 
     contestant; and
       ``(C) a purchase, payment, or donation is required or 
     implied to be required to enter the contest; and
       ``(4) `sweepstakes' means a game of chance for which no 
     consideration is required to enter.
       ``(b) Nonmailable Matter.--
       ``(1) In general.--Matter otherwise legally acceptable in 
     the mails described under paragraph (2)--
       ``(A) is nonmailable matter;
       ``(B) shall not be carried or delivered by mail; and
       ``(C) shall be disposed of as the Postal Service directs.
       ``(2) Nonmailable matter described.--Matter that is 
     nonmailable matter referred to under paragraph (1) is any 
     matter that--
       ``(A) is a skill contest or sweepstakes, except for any 
     matter described under section 3001(k)(4); and
       ``(B)(i) is addressed to an individual who made an election 
     to be excluded from lists under subsection (d); or
       ``(ii) does not comply with subsection (c)(1).
       ``(c) Requirements of Promoters.--
       ``(1) Notice to individuals.--Any promoter who mails a 
     skill contest or sweepstakes shall provide with each mailing 
     a statement that--
       ``(A) is clearly and conspicuously displayed;
       ``(B) includes the address or toll-free telephone number of 
     the notification system established under paragraph (2); and
       ``(C) states that the notification system may be used to 
     prohibit the mailing of all skill contests or sweepstakes by 
     that promoter to such individual.
       ``(2) Notification system.--Any promoter that mails or 
     causes to be mailed a skill contest or sweepstakes shall 
     establish and maintain a notification system that provides 
     for any individual (or other duly authorized person) to 
     notify the system of the individual's election to have the 
     name and address of the individual excluded from all lists of 
     names and addresses used by that promoter to mail any skill 
     contest or sweepstakes.
       ``(d) Election To Be Excluded From Lists.--
       ``(1) In general.--An individual (or other duly authorized 
     person) may elect to exclude the name and address of that 
     individual from all lists of names and addresses used by a 
     promoter of skill contests or sweepstakes by submitting a 
     removal request to the notification system established under 
     subsection (c).
       ``(2) Response after submitting removal request to the 
     notification system.--Not later than 35 calendar days after a 
     promoter receives a removal request pursuant to an election 
     under paragraph (1), the promoter shall exclude the 
     individual's name and address from all lists of names and 
     addresses used by that promoter to select recipients for any 
     skill contest or sweepstakes.
       ``(3) Effectiveness of election.--An election under 
     paragraph (1) shall remain in effect, unless an individual 
     (or other duly authorized person) notifies the promoter in 
     writing that such individual--
       ``(A) has changed the election; and
       ``(B) elects to receive skill contest or sweepstakes 
     mailings from that promoter.
       ``(e) Promoter Nonliability.--A promoter shall not be 
     subject to civil liability for the exclusion of an 
     individual's name or address from any list maintained by that 
     promoter for mailing skill contests or sweepstakes, if--
       ``(1) a removal request is received by the promoter's 
     notification system; and
       ``(2) the promoter has a good faith belief that the request 
     is from--
       ``(A) the individual whose name and address is to be 
     excluded; or
       ``(B) another duly authorized person.
       ``(f) Prohibition on Commercial Use of Lists.--
       ``(1) In general.--
       ``(A) Prohibition.--No person may provide any information 
     (including the sale or rental of any name or address) derived 
     from a list described under subparagraph (B) to another 
     person for commercial use.
       ``(B) Lists.--A list referred to under subparagraph (A) is 
     any list of names and addresses (or other related 
     information) compiled from individuals who exercise an 
     election under subsection (d).
       ``(2) Civil penalty.--Any person who violates paragraph (1) 
     shall be assessed a civil penalty by the Postal Service not 
     to exceed $2,000,000 per violation.
       ``(g) Civil Penalties.--
       ``(1) In general.--Any promoter--
       ``(A) who recklessly mails nonmailable matter in violation 
     of subsection (b) shall be liable to the United States in an 
     amount of $10,000 per violation for each mailing to an 
     individual of nonmailable matter; or
       ``(B) who fails to comply with the requirements of 
     subsection (c)(2) shall be liable to the United States.
       ``(2) Enforcement.--The Postal Service shall assess civil 
     penalties under this section.''.
       (b) Technical and Conforming Amendments.--The table of 
     sections for chapter 30 of title 39, United States Code, is 
     amended by adding after the item relating to section 3016 the 
     following:

``3017. Nonmailable skill contests or sweepstakes matter; notification 
              to prohibit mailings.''.

       (c) Effective Date.--This section shall take effect 1 year 
     after the date of enactment of this Act.

  Ms. COLLINS. Mr. President, I offer this managers' amendment on 
behalf of myself and Senator Levin to clarify certain provisions of S. 
335.
  As I described in my opening statement, this legislation imposes a 
number of new standards on promotional mailings. The managers' 
amendment further defines the ``clear and conspicuous'' standard for 
the disclaimers and notices required in this bill. All disclaimers and 
notices must be ``clearly and conspicuously displayed,'' which means 
``in a manner that is readily noticeable, readable and understandable 
to the group to whom the applicable matter is disseminated.''
  During its investigation into deceptive sweepstakes mailings, the 
Permanent Subcommittee on Investigations found numerous examples of 
mailings that misled consumers into believing that they must purchase a 
product to win a prize, or that a purchase will improve their chances 
of winning. The investigation showed that many mailings did not clearly 
inform consumers that no purchase was necessary to enter the 
sweepstakes and that buying a product did not increase their chances of 
winning. The disclaimers and notices in many existing sweepstakes 
mailings are of little value because they are too often buried in tiny 
print or contradicted by the promotional copy. Consumers should not 
need a law degree or a magnifying glass to read the rules or to 
decipher how to enter a sweepstakes without placing an order. In order 
to give some value to the disclaimers and consumer notices mandated by 
this bill, S. 335 requires each of these disclosures to be ``clearly 
and conspicuously displayed.''
  The managers' amendment defines ``clearly and conspicuously 
displayed'' in a manner that is consistent with previous agency and 
court rulings. As the committee report for this legislation explains, 
the Federal Trade Commission has issued opinions on the meaning of 
``clear and conspicuous'' and this standard is a staple of commercial 
law. The definition of clear and conspicuous, as used in S. 335, is 
meant to be consistent with the interpretation of the standard as 
developed in previous regulatory opinions, statements, and case law.
  Thus, as the definition states, the required disclosures must be 
readily noticeable, readable, and understandable to the group to whom 
the matter is mailed. As the committee report notes, in some instances, 
the language may need to be highlighted, in bold letters, or placed in 
a visible location. We recognize that the format and layout of 
promotional mailings differ dramatically and, accordingly, the 
presentation of each required disclosure will necessarily vary. Thus, 
we believe it is unwise to dictate the size, font, color, or placement 
of each disclaimer imposed on promotional mailings. The definition in 
this managers' amendment, however, gives the regulators broad guidance 
to interpret on a case-by-case basis what is required for a disclaimer 
or notice to qualify as ``clearly and conspicuously displayed.''
  The committee report accompanying S. 335 provides a detailed 
description of the clear and conspicuous standard as

[[Page S9975]]

enunciated by the Federal Trade Commission and in court decisions. The 
standard was designed to prevent deception, and we expect those 
enforcing this Act to make use of this standard to protect consumers 
receiving promotional mailings from deceptive practices. We agree with 
the Federal Trade Commission that deception occurs if there is a 
representation, omission, or practice that is likely to mislead the 
reasonable consumer or his or her detriment.
  Furthermore, the managers' amendment adds the word ``prominently'' to 
the two most significant disclosures required by S. 335: first, that no 
purchase is necessary to enter the sweepstakes; and second, that a 
purchase will not increase an individual's chances of winning with that 
entry. S. 335 already places significance on these two disclaimers by 
requiring that they appear in three different places in most 
sweepstakes mailings: (1) the mailing, (2) the rules, and (3) the entry 
or order form. Because the subcommittee's investigation found strong 
evidence that some consumers believed a purchase would increase their 
chances of winning, we view these two disclosures as particularly 
important. As such, and because of the brevity of these disclosures, we 
believe that it is particularly important that they be easily 
identifiable by the reader.
  The Federal Trade Commission has used a variety of terms to describe 
clear and conspicuous, including sufficiently clear and prominent. 
Because many of the other disclosures required by S.  335 may be 
lengthy and may only appear in one place in a mailing, we believe that 
what is ``clear and conspicuous'' for one disclaimer may differ from 
what is necessitated by another. A disclosure of a few words, such as 
``no purchase necessary,'' would by its very nature dictate a different 
yardstick than would the entire contest rules, which might consist of 
several hundred words. We expect all disclosures to be clear and 
conspicuous but these two disclosures should be ``prominent'' in the 
three required places in each mailing.
  The managers' amendment also makes several technical changes. it 
removes duplicative language from several different disclosures 
required by S. 335. These deletions, however, are not intended in any 
way to weaken the overall requirement that disclosures must be 
``clearly and conspicuously displayed.'' The managers' amendment also 
deletes a somewhat duplicative requirement relating to advantages that 
a sweepstakes might imply are given to those entries that accompany a 
purchase. Given the disclaimer which states that a purchase will not 
improve the contestant's chance of winning, we determined that this 
provision was superfluous.
  Finally, the managers' amendment replaces section 8 of the bill 
reported by the Governmental Affairs Committee with new language 
requiring all companies sending sweepstakes or skill contest mailings 
to establish a system for removing the names of individuals who do not 
wish to receive such mailings. Section 8, as reported out of the 
Committee on Governmental Affairs, established a uniform notification 
system for most sweepstakes and contest mailings.
  Under the new provisions companies would be required--on a company-
by-company basis--to include on their mailings a notice of the address 
or toll-free telephone number that individuals could contact to request 
that their names be removed from future mailings. Such names must be 
removed within 35 days after appropriate notice. If a mailing is 
recklessly sent to consumers who have requested not to receive further 
solicitations, the mailer shall be subject to a penalty of $10,000. 
This section shall take effect one year after enactment of this 
legislation. We commend our colleague and friend Senator Edwards for 
his strong leadership in crafting this proposal.
  In closing, I thank my colleagues, particularly Senator Levin, for 
their assistance in crafting this managers' amendment, and I urge its 
adoption.
  The PRESIDING OFFICER. Without objection, the amendment is agreed to.
  The amendment (No. 1497) was agreed to.
  Ms. COLLINS. Mr. President, I move to reconsider the vote.
  Mr. LEVIN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Ms. COLLINS. Mr. President, we are expecting additional speakers. In 
the meantime, I suggest the absence of a quorum, and I ask unanimous 
consent that time be charged equally to both sides.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will call the roll.
  The legislative clerk proceeded to call the roll.
  Ms. COLLINS. Mr. President, I ask unanimous consent that the order 
for the quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ROTH. Mr. President, I rise today to speak in support of the 
Deceptive Mail Prevention and Enforcement Act. Unrequested mailings are 
seen by many as a nuisance. But when junk mail makes insupportable and 
outrageous claims of instant wealth, phantom prices, and bogus benefits 
annoyance becomes fraud--the small print notwithstanding.
  Among its provisions, the Deceptive Mail Prevention and Enforcement 
Act, S. 335, would place new requirements on sweepstakes offerings and 
allow fines to be levied on deceptive mailings. S. 335 would also 
require sweepstakes information to be presented clearly, and grants the 
Postal Service new authority to halt misleading mailings. I feel 
strongly that these reforms will benefit an untold number of American 
families and elderly persons from some unscrupulous elements of our 
society.
  It pleases me to remark briefly on the genesis of this proposal. In 
my experience, the role of oversight and investigation has enabled the 
Congress to craft its most informed, well reasoned, and thorough 
legislative proposals. As past chairman of the Senate's Permanent 
Subcommittee on Investigation and current chairman of the Senate 
Finance Committee, I have long used and will continue to use these 
tools to assess and reform.
  I commend my successor as chairman of the Permanent Subcommittee on 
Investigation, Senator Susan Collins, for taking a thorough approach to 
crafting this proposal. Following a process of investigation and 
hearings, Senator Collins has applied the right tools to a common 
problem. The people of Maine, Delaware, and the rest of our Nation will 
benefit from her hard work.
  Mr. JEFFORDS. Mr. President, I rise today to express my strong 
support for S. 335, the Deceptive Mail Prevention and Enforcement Act.
  As a cosponsor of this legislation, let me first thank Senator 
Collins for her hard work in crafting this legislation, and for the 
informative and insightful oversight hearings she has held on the 
sweepstakes industry this year. Those hearings have exposed some 
troubling practices, and clearly demonstrate the need for this 
important legislation.
  Earlier this year a constituent of mine from Huntington, Vermont, e-
mailed my office and relayed his own personal story as an example of 
the need for this legislation. He had been asked by his mother to help 
review her mail as she was certain she had won something from a variety 
of sweepstakes mailings. He was shocked to learn in reviewing the 
material that while technically correct the material she was sent was 
very misleading. Any information that would lead the person to believe 
they had won was highlighted or in bold print, while the statements 
containing words like ``if you have the winning number'' are subdued, 
and in small print. The intent of these mailings was clearly to create 
a false sense of ``winning'' in the recipient.
  As his e-mail further points out, it used to be only the big names 
which sent out these sweepstakes mailings, but it ow seems to be every 
fund-raising group, catalog, or magazine has some version of these 
sweepstakes mailings. However, even if you are just receiving material 
from one company if can be an overwhelming amount of sweepstakes 
mailings.
  For example, another constituent of mine from Barre, Vermont, brought 
into my office over fifteen pounds of sweepstakes mailings from one 
company that related to only one contest. You heard me right, fifteen 
pounds of material for only one contest from one company. Multiply that 
by the number

[[Page S9976]]

of contests and companies people receive mailings from and you are 
looking at an overwhelming amount of mail.
  One of the most outrageous practices in these mailings is the request 
for a donation or a purchase of a product without making it clear that 
the donation or purchase has no effect on your chances of winning any 
of the prizes. This has caused some people to expend their precious 
resources thinking they are giving themselves a better chance at 
winning the grand prize, when in reality it has done nothing to change 
the odds.
  Senator Collin's legislation, S. 335, will go a long way to solve the 
problems of these deceptive sweepstakes mailings. It requires a clear 
disclosure of the game's rules and an indication that the odds of 
winning are not improved by purchasing any products that are being 
advertised. It also will restrict the mailing from depicting an 
individual as a winner unless that person actually has won a prize. In 
addition, the bill will implement stricter penalties for sending mail 
that does not comply with the federal standards.
  Every day people are being inundated with these mailings and many of 
them promote a belief that you have already won, or that a donation or 
purchase will increase your chances of winning. For many, especially 
for the most vulnerable in our society, it has been very difficult to 
separate the truth from the fantasy in these mailings, and as past 
history has shown sweepstakes mailings are a particular problem for the 
elderly in our society.
  Mr. President, we have a chance to protect all Americans, 
particularly the elderly, and I urge all my colleagues to support this 
important piece of legislation.
  Ms. COLLINS. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Ms. COLLINS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. COLLINS. Mr. President, how much time is remaining on the 
majority side?
  The PRESIDING OFFICER. Fifteen minutes 12 seconds.
  Ms. COLLINS. Mr. President, I ask unanimous consent that the time 
remaining on the majority side be equally divided between Senator 
Thompson and Senator Burns.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. COLLINS. I thank the Chair.
  Mr. LEVIN. Mr. President, I ask unanimous consent that the time under 
the quorum call, which I will ask for, be charged against our side.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LEVIN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. THOMPSON. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. THOMPSON. Mr. President, I lend my strong support for Senate 
approval of S. 335, the Deceptive Mail Prevention and Enforcement Act. 
This bill will establish new consumer protections to shield consumers 
from falling victim to deceptive and fraudulent practices found in some 
sweepstakes and mail promotions.
  Thanks to the hard work of the Permanent Subcommittee on 
Investigations, under the leadership of Senator Susan Collins, we have 
become privy to the operations of some of these sweepstakes companies. 
As the hearings pointed out, sweepstakes companies are now sending out 
more than one billion mailings per year. In the course of these 
mailings, some recipients have been led to believe that their chances 
of winning large amounts of money could be increased through the 
purchase of the promoter's products or merchandise. Whether through the 
use of unclear and ambiguous language, symbols, or documents, these 
mailings have been a source of confusion and have lead to some readers 
spending significant sums of money ordering products in the mistaken 
belief that this would increase their chances of winning.
  S. 335, for the first time, would establish specific guidelines and 
parameters for mailings containing sweepstakes, games of skill and 
facsimile checks. The legislation requires clear and conspicuous 
disclaimers that ``no purchase is necessary'' on the sweepstakes claim 
or entry form. The legislation also improves restrictions on government 
look-alike mailings. Further, the bill directs sweepstakes companies to 
adopt procedures to prevent the mailing of these materials to anyone 
who submits a request stating their intent not to receive these 
mailings.
  This bill has the strong support of the Postal Service. In providing 
the Postal Service with the ability to protect consumers through civil 
enforcement, the bill further grants the Postal Service administrative 
subpoena authority. It will also give U.S. district courts the ability 
to impose nationwide temporary training orders.
  As a strong proponent of federalism, I think it is important that 
this bill does not preempt the authority of the state attorneys general 
and various consumer protection agencies which also combat deceptive 
mailings. The Postal Service and these agencies have a history of 
cooperation in the investigation and prosecution of these cases. The 
Postal Service reports that this collective effort has produced 
significant results in policing a variety of frauds while enabling 
state prosecution efforts to investigate questionable promotion 
practices beyond their state borders. S. 335 will not only improve the 
Postal Service's ability to investigate and stop deceptive mailings, 
but it will also help state attorneys general work more effectively 
against fraud.
  This bill represents the bipartisan efforts of a number of Senators. 
S. 335 was unanimously reported out of the Committee on Governmental 
Affairs with the support of both myself and the ranking minority 
member, Senator Lieberman. I would like to take this opportunity to 
acknowledge the hard work put forth by the bill's sponsor, Senator 
Collins, and other cosponsors of the legislation including Senators 
Cochran, Levin, and Edwards. In addition I want to acknowledge the role 
of Senator Campbell in first introducing legislation last year on this 
issue. His efforts served as the genesis for the successful 
investigative and legislative efforts we have seen this year.
  In conclusion, Mr. President, S. 335 presents a balanced and fair 
approach in protecting consumers from misleading and fraudulent 
sweepstakes and related mailings, while not unduly burdening those 
mailers who legitimately use the mail as an advertising medium. I urge 
all Senators to support Senate approval of S. 335.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. LEVIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LEVIN. I yield 6 minutes to the Senator from Connecticut.
  Mr. LIEBERMAN. Mr. President, I thank my friend and colleague from 
Michigan.
  I am delighted to stand in support of defending S. 335, the Deceptive 
Mail Prevention and Enforcement Act. I commend my colleague from 
Michigan, along with Senators Collins, Cochran, and Edwards, for the 
way they have worked together with my former colleagues, the State 
attorneys general, the AARP, and the sweepstakes industry itself to put 
together this important consumer protection legislation. I think their 
combined efforts stand as a model not only of cooperation but of 
thoughtful legislating from which we can all learn. I am very proud to 
join them as a cosponsor of this bill.
  No marketing effort should be based on misleading advertising. That 
principle is at the core of the legislation before the Senate. It 
reminds everyone that occasionally the Federal Government has to step 
in to make sure that the free market we celebrate and benefit so much 
from truly remains free. That freedom is so often based on the 
truthfulness of representations made by those who are marketing.
  The purpose of this bill is to eliminate deceptive practices in the 
sweepstakes industry. We have all seen

[[Page S9977]]

them. Who wouldn't be tantalized by a letter proclaiming you may 
already be a winner? It is hard not to open that one up. Everybody 
wants to be a winner. Most of us have probably fantasized about how we 
would spend a sudden windfall that dropped into our bank accounts.
  Unfortunately, sweepstakes mailings often involve sophisticated 
marketing techniques that persuade recipients to spend money in the 
hope of finding the pot of gold at the end of the rainbow, but it is a 
long way off in almost all cases. Often the mailings are targeted at 
the elderly or the financially vulnerable who don't realize that 
sweepstake companies are not in business primarily to rain riches down 
upon them. Sweepstakes companies are in business to sell products that 
make a profit, plain and simple. That is legitimate so long as they do 
it fairly and truthfully.
  It is a big business. The fact is that sweepstakes and telemarketing 
firms take in more than $400 million a year from promotional campaigns 
in my State of Connecticut alone. Nationally, estimates are that the 
sweepstakes in telemarketing firms have gross revenues between $40 and 
$60 billion a year. This legislation makes sure that before consumers 
take a chance on the sweepstakes, they know it is just that, a chance--
not a winning ticket, not a prize, but a chance. They will know the 
odds are not improved no matter how many subscriptions they buy.
  This legislation requires a clear statement that no purchase is 
necessary to win, as well as terms and conditions of the promotion in 
language that is easy to find, to read, and to understand. It prohibits 
abuses we have seen such as symbols or statements that imply Federal 
Government endorsement, and it provides meaningful disclosures to let 
consumers know the actual odds of winning.
  Further, the bill sets up a mechanism for consumers and those who 
care for them to stop unwanted sweepstake solicitations and a 
recordkeeping requirement to assure that such requests are properly 
implemented.

  Finally, the bill gives the Postal Service the additional enforcement 
authority it needs to stop unlawful sweepstake schemes, particularly 
those that flirt with fraud and skip from State to State.
  I strongly support this legislation as a tool to help consumers 
negotiate their way through the high pressure sales tactics sometimes 
employed by marketers using sweepstakes to sell their products. I am 
very grateful to colleagues on the Governmental Affairs Committee for 
the leadership they have shown.
  I am delighted to join this bipartisan effort to protect our 
citizens--again, particularly the aged--from these deceptive marketing 
tactics. I urge the Senate to vote for this strong consumer protection 
measure. I hope the House will then join in adopting this bill and 
sending it to the President.
  I yield the floor and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative assistant proceeded to call the roll.
  Mr. WELLSTONE. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WELLSTONE. Mr. President, I am going to speak for a brief period 
of time in morning business. I see the Senator from Mississippi is 
coming into the Chamber. I know we are ready to start with the Ag 
appropriations bill.

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