[Congressional Record Volume 145, Number 111 (Monday, August 2, 1999)]
[Senate]
[Pages S9982-S9988]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DECEPTIVE MAIL PREVENTION AND ENFORCEMENT ACT--Continued
The PRESIDING OFFICER. Under the previous order, the Senate will now
proceed to vote on S. 335, after recognizing Senator Edwards for 10
minutes, Senator Levin for 5 minutes, and Senator Collins for 5
minutes.
The Senator from Maine is recognized.
Ms. SNOWE. Madam President, I rise today in support of S. 335, the
Deceptive Mail Prevention and Enforcement Act, legislation authored by
my colleague from Maine, Senator Susan Collins. I applaud her
leadership on this issue as chair of the Permanent Subcommittee on
Investigations. I believe that this legislation strikes an important
balance between consumer protection and over-regulation of the
sweepstakes industry.
This issue has long been a priority for me. In the late 1980s, while
in the House of Representatives, I began working on initiatives to curb
deceptive mailings, and during the 101st Congress, I co-authored H.R.
2331, the Deceptive Mailings Prevention Act of 1989, which was signed
into law by President Bush on November 6, 1990. H.R. 2331 prohibited
solicitations by private entities for the purchase of products or
services or the contribution of funds or membership fees, which imply
false federal government connection or endorsement.
At the time, our main focus was on mailings that led one to believe
that they were endorsed by the government--for example, offers that
promise consumers information on federal benefits for which they may be
eligible for a fee, when in fact such information is available at no
cost directly from federal agencies.
The legislation barred the use of any seal, insignia, trade or brand
name, or other symbol designed to construe government connection or
endorsement. Today, I am pleased to support S. 335, which builds on the
foundation laid by the 1990 law, in recognition of the problems that
have emerged as sweepstakes offers have proliferated, with all of the
accompanying abuses we have witnessed.
How many times have each of us received an offer in the mail
promising enormous sweepstakes payoffs or other prizes? These promises
are a clever way to market magazine subscriptions and other products.
The old adage--``if it's too good to be true, it probably is''--comes
to mind. Regrettably, for many, such offers seem too good to pass up
particularly when the are accompanied by dire warnings such as ``urgent
advisory,'' ``don't risk losing your multimillion dollar prize,'' or
``don't risk forfeiture now!'' Many consumers are misled by this type
of advertising, which is deliberately designed to mislead.
Many offers are designed to entice the consumer into believing that
he or she has already won a valuable prize, for example, or is on the
verge of winning, when in fact, the odds against winning may be
astronomical.
The sad truth is that companies use deceptive advertising because it
works--it sells more product. And the tragic problem facing us today is
this: all too often, the consumer who is being victimized is a senior
on a fixed income or is disabled.
We have all heard the horror stories about unwitting victims on fixed
incomes who have purchased hundreds or thousands of dollars worth of
magazine subscriptions--sometimes multiple subscriptions to the same
magazine, thinking they would improve their chances of winning a prize.
We have heard the tragic accounts of individuals flying to another city
or state to claim a prize, genuinely believing that they had been
selected as the winner, only to find that they have become a victim.
Some have squandered life savings on misleading offers. When these
types of incidents become commonplace, I think, we have a good
indication that there is a problem. And we have a responsibility to
correct the problem.
What I find most troubling about this issue is that many unscrupulous
companies intentionally target the most vulnerable consumers, knowing
full well how devastating the results can be. S. 355 is designed to
target these those companies that have demonstrated that they will not
police themselves.
Among other things, S. 335 requires sweepstakes mailings to display
rules clearly and state explicitly that no purchase is necessary to
increase one's chance of winning. It requires the sponsor of an offer
to clearly state the odds of winning and the value of the prize, and
prohibits companies from making false statements, such as an individual
is a winner, unless they have actually won a prize. It also strengthens
safeguards to protect those who have requested not to receive
sweepstakes mailings and other such offers, and enhances the Postal
Service's authority to investigate, penalize, and stop deceptive
mailings.
S. 335 does not prohibit legitimate offers. Rather, it puts fair,
common sense restrictions in place in order to protect consumers,
particularly those most at risk, such as seniors, or the disabled.
This week, the Senate Commerce Committee, of which I am a member, is
scheduled to hold a hearing on fraud against seniors. It is a serious
problem, and one that is not going to go away on its own. We must
address the problem, and the deceptive mailings which S. 335 seeks to
curb are certainly a component of this problem.
I am pleased that S. 335 has generated so much debate on this issue,
because I believe that in addition to government action, the key to
this challenge is increased awareness and personal responsibility--on
the part of companies and individual consumers and families.
Companies should police themselves. Likewise, there are steps that
consumers can take to protect themselves. For example, always read the
rules for any offer very carefully, especially if it sounds too good to
be true. And if it sounds too good to be true, it probably is. If you
receive a letter in the mail informing you that you have won a prize,
and it solicits a shipping or handling fee, be wary. This type of offer
should raise a red flag, and could be a fraud. Finally, make sure you
know the company is a reputable one, and don't give out your bank
account or credit card number.
I hope this legislation will be a constructive step forward in this
important effort, and I hope that it sends a strong message that
government takes its responsibility as a watchdog and regulator of
anti-consumer practices very seriously.
Mr. CAMPBELL. Madam President, today the Senate is taking another
important step toward enacting sweepstakes reform legislation.
Today we continue the good fight that was launched nearly fourteen
months ago when the Senate first began consideration of sweepstakes
reform legislation. I was pleased to lead the fight for sweepstakes
reform on June 5th, 1998, in the 105th Congress, when I introduced S.
2414, the Honesty
[[Page S9983]]
in Sweepstakes Act of 1998. This was the first legislation of its kind.
A few months later, on September 1st, 1998, a high-impact Senate
hearing focusing on the Honesty in Sweepstakes Act of 1998 attracted
national attention and widespread public support. That hearing,
followed by a series of hearings chaired by Senator Collins this year,
was the turning point in the battle for sweepstakes reform and helped
generate the powerful momentum that has carried sweepstakes reform
forward.
I was prompted to fight for Honesty in Sweepstakes when I heard far
too many horrible stories about how consumers, especially our seniors,
were being taken advantage of, and all too often seriously financially
harmed by sweepstakes promotions that prey upon people's hopes and
dreams by making convincing yet false promises of riches. They use
massive mailing lists to deliberately target our most vulnerable
consumers with false promises of riches and then bombard them again and
again.
Since I first introduced the Honesty in Sweepstakes Act I have been
contacted by many people from Colorado and all over the country with
stories of their unfortunate experiences with sweepstakes promotions.
They told stories of how their loved ones, often their elderly parents,
had squandered many thousands of dollars after having been lured in by
cleverly presented promotions promising instant riches. Many people
from all over the country have also sent me large envelopes stuffed
full of examples of the misleading sweepstakes promotions they and
their loved ones have received.
I am pleased to be an early cosponsor of the bill we consider today,
S. 335, the Deceptive Mail Prevention and Enforcement Act, which was
introduced by my colleague Senator Collins. This bill includes a number
of provisions similar to those I included in the Honesty in Sweepstakes
Act. There are two additional provisions included in S. 335 that I
believe will be especially beneficial in the fight against misleading
sweepstakes. The first calls for establishing centralized and easy to
access toll free phone numbers where consumers' questions can be
answered. The second provision makes it much easier for people to have
their names removed from mailing lists.
Our nation's seniors and other vulnerable consumers are clearly being
taken advantage of, and in some cases seriously financially harmed, by
intentionally misleading sweepstakes promotions. Something needs to be
done. I support passage of this legislation to bring this harmful
practice to a halt.
Mr. DODD. Mr. President, I rise today in support of S. 335, the
Deceptive Mail Prevention and Enforcement Act. I am proud to be one of
the cosponsors of this important legislation.
I commend Senators Collins and Levin for their efforts in addressing
the serious problems with deceptive mailings involving sweepstakes,
skill contests, facsimile checks, and mailings made to look like
government documents. The investigation and hearings of the Senate
Governmental Affairs Permanent Subcommittee on Investigations have shed
light on sweepstakes and other mailings that promise extravagant prizes
in order to entice individuals to make unnecessary purchases.
Far too many of these mailings are full of deceptive and misleading
statements, which lead unsuspecting recipients to believe that they
must purchase various items in order to be a winner or in order to
improve their chances of winning. In too many cases, the prizes and
awards are never granted. In many instances, the customer receives a
trinket or coupon book of little value. Those consumers who respond to
these mailings are then bombarded with additional mailings seeking more
money for the same or similar items.
The effect on many consumers can be devastating. One of my
constituents wrote about his 88-year-old father, who had spent
thousands of dollars in hopes of receiving a large cash prize.
This legislation would set new standards for mailings that use
sweepstakes, skill contests, and facsimile checks as promotions to sell
merchandise. More disclosures would be required, disclosures which are
clear and conspicuous, displayed in a manner that is readily
noticeable, readable and understandable. Sweepstakes mailings must
include prominent notice that no purchase is necessary to win, and that
a purchase will not increase the chances of winning. In addition, the
mailing must state the estimated odds of winning.
While S. 335 will probably not put a stop to all of the egregious
practices that the unscrupulous companies employ, I am hopeful that
this bill will result in fewer deceptive mailings and that fewer
consumers will lose their hard-earned savings and retirement funds.
One important provision of this bill would require each company that
sends these mailings to have a toll-free number that consumers may call
to have their names removed from that company's mailing list. This is a
first step in making it possible for individuals to have their names
removed from mailing lists. However, this particular system places an
undue burden on the consumer to call each company that sends him a
mailing. The unscrupulous companies could circumvent the intent of this
provision by forming a new company that would then use the old mailing
lists.
To minimize this risk, I encourage the industry groups to establish a
system whereby consumers would have one toll-free number to call which
would serve as the mechanism to remove their names from all mailing
lists for all sweepstakes, skill contests, facsimile checks and
government look-alike mailings. This system has worked in other areas,
and I believe that it would work here, as well.
I urge my colleagues to support this bill.
The PRESIDING OFFICER. The Senator from North Carolina.
Mr. EDWARDS. Madam President, I rise today to urge my colleagues to
vote in favor of the sweepstakes legislation, which is S. 335, the
Deceptive Mail Prevention and Enforcement Act.
Let me say first, I thank my colleague, Senator Levin--I do not see
him on the floor right now--also, my colleague, Senator Collins. They
worked so hard and so long on this remarkably important piece of
legislation.
Let me start by telling a story. It is a story I have told before,
but I think it goes to the very heart of what this legislation is
about.
There is an elderly man in North Carolina who lives in Raleigh, NC, I
believe--right outside of Raleigh--named Bobby Bagwell. Bobby Bagwell
is an elderly man who was watched over by his family, his daughter-in-
law. Although he lived alone, he had a difficult time living alone.
His daughter-in-law went over to his house one day. When going
through his various belongings, she discovered boxes and boxes of
sweepstakes mailings. She came to discover in addition to that, in
response to these sweepstakes mailings, Mr. Bagwell had purchased
thousands and thousands of dollars of devices--goods that were
basically useless. They were of no value to him at all. When she
questioned her father-in-law about why he had bought these goods, the
response was that he believed it would increase his chances of winning
the sweepstakes. He had spent, I think, something on the order of
$20,000, which was basically his life's savings, on purchasing this
useless, worthless material.
As I mentioned earlier, Mr. Bagwell was an elderly man. For that
reason, he was vulnerable. But there is an even worse part to this
story. Mr. Bagwell, as it turns out, suffers from dementia. So he could
not remember from day to day what he had bought, how much money he had
spent, or why he had spent it. His daughter-in-law, doing everything in
her power to do something about this very sad situation, contacted the
sweepstakes companies, asking them to take him off the mailing lists.
She got no response. She then sent a doctor's order to the sweepstakes
companies saying, ``My father-in-law suffers from dementia. I ask you,
take him off your lists for sweepstakes mailings because he is buying
all these goods, he doesn't remember that he is spending his life's
savings, and we need to take him off the lists so he does not continue
to engage in this kind of behavior.'' For the second time, she got no
response.
Finally, when they contacted me and I became aware of the situation
and I contacted the sweepstakes companies,
[[Page S9984]]
they responded appropriately and took him off the lists.
The sad part of this story is that in this country, in this day and
time, it was necessary for a Senator to contact the sweepstakes
companies in order to get this accomplished. That goes to the very
heart of what this sweepstakes legislation is about. It is the reason
Senator Collins has done such a remarkable job in conducting hearings
and bringing this matter to the attention of the American people so
something can be done about it. It is something for which I believe we
have broad bipartisan support, support on both sides of the aisle.
Everyone knows and recognizes something needs to be done about this
problem.
I do want to discuss one specific feature. The bill has many
wonderful provisions, including provisions that require the sweepstakes
companies, for example, to tell people that buying these goods does not
increase their chances of winning. That would save a man such as Bobby
Bagwell from being taken advantage of.
One specific provision I worked on awfully hard, with Senator Collins
and Senator Levin, basically provides that sweepstakes companies be
required to provide a vehicle for people to be taken off these mailing
lists so someone such as Bobby Bagwell, who has dementia, an elderly
person who is being taken advantage of, who is vulnerable, can be
protected and can be taken off the lists. In addition to that, it helps
every North Carolinian--in my case--and every American who simply does
not want to continue to receive these sweepstakes mailings.
We all recognized during the course of the hearings there are some
reputable, legitimate companies that engage in these sweepstakes
techniques as a marketing tool. But people need to have a way to get
off these lists if they want to get off the lists. One of the
provisions in this legislation specifically provides for that.
The bottom line is this. This legislation goes a long way toward
eliminating any sort of deceptive, misleading sweepstakes mailings. It
allows people who do not want to receive these mailings to no longer
receive them. Ultimately, what it does is it empowers American families
who want to make sure the elderly members of their families--their
parents, their in-laws--are taken care of. It empowers them to make
sure they are not taken advantage of with these sweepstakes mailings,
and in fact, if they so choose, that they no longer continue to receive
these mailings.
This is a wonderful piece of legislation. As I mentioned earlier, it
has bipartisan support. I am very proud to have worked with Senator
Collins and Senator Levin, who have done a tremendous job for the
American people in connection with this legislation.
Lastly, I ask unanimous consent that a letter from the American
Association of Retired Persons be printed in the Record. They
specifically provide their strong support for this legislation.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
AARP,
Washington, DC, July 28, 1999.
Hon. John Edwards,
U.S. Senate, Hart Senate Office Building, Washington, DC.
Dear Senator Edwards: AARP thanks you for including a
provision to the Managers Amendment to S. 335, the Deceptive
Mail Prevention and Enforcement Act, to institute a
notification system. As drafted, the notification system
would provide consumers with numbers to call to have their
names removed from the mailing lists of companies that
promote products and services through sweepstakes. The
ability to have one's name removed from mailing lists is an
important consumer protection, and facilitating such removal
through the use of a toll free number is even better for
consumers.
AARP has supported the use of toll free helplines to
respond to questions or concerns in the telemarketing area,
and the requirement that companies provide such a service to
slow the proliferation of deceptive mailings is a logical
extension. Further, we applaud the amendment's strong civil
penalty provisions imposed on companies that violate a
consumer's request.
AARP appreciates your efforts on behalf of consumers to
eradicate the practice of fraudulent sweepstakes mailings
through this provision to the Manager's Amendment to S. 335.
We strongly support the ``notification system'' provisions
that you authored, and hope that this section of the bill
will be retained as it works its way through conference. We
look forward to working with you and other Members on a bi-
partisan basis to ensure that this issue is resolved in the
106th Congress.
Sincerely,
Horace B. Deets,
Executive Director.
The PRESIDING OFFICER. The Senator from Michigan is recognized.
Mr. LEVIN. Madam President, I again commend Senator Collins for her
really strong leadership of our subcommittee in so many consumer
protection measures. This is just the latest of many on which Senator
Collins has been the leader. That leadership is critically important to
the American people. I commend her on it.
I also want to single out Senator Edwards. He made a major
contribution to this bill by making it possible for people who no
longer want to receive these sweepstakes to call a phone number to stop
the deluge of mail which is received in so many homes. As in so many
other areas, he is already making a great contribution to this Senate.
I especially thank him for his contribution to this bipartisan bill.
That part of this bill is a very important part. It is a very creative
part of the bill. Again, it makes it possible, in a very practical way,
for people who get sick and tired of the swamping of their mailboxes
with these sweepstakes offers, to end that.
This bill attempts to end these sweepstakes swindles which are
swamping our Nation. The sweepstakes scams are part of a $1 billion
industry, an industry which is too often based on deception, an
industry which too often tells people they have won a prize, dangles in
front of them that promised prize, and then, of course, encloses the
promotional materials that create the impression that buying a product
will help to get that prize.
Most people are skeptical when they get this mail. They realize there
could be 100,000 people who are told they have just won a huge amount
of money, but there is a significant percentage of our people who are
misled. The companies that do this prey on some of the most vulnerable
among us and they take special advantage of our seniors. This is shown,
in particular, when somebody responds to one of these promotions and
then they are frequently inundated with followup targeted promotions.
In fact, according to one of our witnesses, one person could get as
many as 144 mailings from one company in 1 year and that, by the way,
is one of the larger companies that does that, one of the so-called
legitimate companies.
Our bill is aimed at ending the abuses and the deceptions and the
scams. It will require the companies that are using these sweepstakes
to display clearly and conspicuously and in a prominent place and in a
prominent manner a statement that no purchase is necessary to enter the
contest and, even more important, in my judgment at least, a statement
saying that a purchase will not improve their chances of winning.
There are other requirements in this bill, and they are important
requirements, but I think those are two of the most important
requirements that we do now impose on an industry to see if we can
clean up some of these abuses.
We also give the Postal Service some long-needed tools to put the
scam artists out of business. The Postal Service will have subpoena
authority. The Postal Service will no longer have to take two steps
before clamping down on the deception; they will be able to do it in
one step. If the representation is deceptive and violates our bill, the
Postal Service will be able to end it directly and not have to first go
through an order which, in turn, will have to be violated as is the
current law.
If someone violates the law, they should not need two steps. One step
ought to be enough to stop the violation and punish the perpetrator.
This bill is intended to close the loopholes in our law, to end the
deceptions that permit too many of these sweepstakes to take in too
many people, usually too many vulnerable people, raising hundreds of
millions of dollars from people who usually cannot afford the dollars
they are scammed into sending to the deceptive mailers of some of these
sweepstakes.
Madam President, again, I commend the Senator from Maine, Ms.
Collins, for her very strong leadership, and the other members of our
committee who have participated, including Senator Cochran who has been
a leader in this
[[Page S9985]]
and, again, Senator Edwards for his major contribution to this bill.
I thank the Chair.
The PRESIDING OFFICER. The Senator from Maine.
Ms. COLLINS. I thank the Chair. Madam President, I ask unanimous
consent that Senator Domenici and Senator Feingold be added as
cosponsors to the pending legislation S. 335.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. COLLINS. Madam President, let me start by expressing my deep
appreciation to the members of the subcommittee and the full committee
who worked so closely with me on this legislation. In particular, I
recognize the enormous contributions of the Senator from Michigan, Mr.
Levin; the Senator from North Carolina, Mr. Edwards; and the Senator
from Mississippi, Mr. Cochran. Without their help, we would not have
been able to craft such an effective bill. I am very grateful for their
assistance and support.
We have heard very eloquent statements from a number of Senators
today about the need for this legislation. In closing this debate, let
me quote from a 74-year-old woman who wrote to me about how deceptive
sweepstakes put her deeply into debt. In her letter, she said:
My only source of income is a monthly Social Security check
totaling $893. I estimate that I have spent somewhere between
$10,000 and $20,000 in the last 19 years. What money I did
not have, I borrowed from my daughter who is now responsible
for my total financial support. I am deeply in financial
debt. Their mailings were worded in such a way that I was
certain I was going to win anywhere from $1 million to $10
million. I truly wish I could recoup the moneys that I
squandered in the hope that a real payoff would come my way.
Unfortunately, it is too late for this woman, but today the Senate
can act to avoid financial hardship, wasted savings, and a great deal
of heartache for countless other vulnerable citizens by passing this
legislation.
It is my hope that we will have a very strong vote today and that it
will prompt the House to act and we will see this important legislation
signed into law before we adjourn this year.
I yield back the remainder of my time. I ask for the yeas and nays. I
think they have already been ordered, but if they have not, I request
the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The yeas and nays were ordered.
Ms. COLLINS. I believe the vote is slated for 5:30 p.m. Seeing no
other speakers requesting time, 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. I ask unanimous consent that the order for the quorum
call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. COLLINS. Madam President, I ask unanimous consent that the
Senator from Minnesota, Mr. Wellstone, be added as a cosponsor of the
bill S. 335.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. COLLINS. 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. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Without objection, the substitute amendment, as amended, is agreed
to.
The PRESIDING OFFICER. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed for a third reading and was read
the third time.
The PRESIDING OFFICER. The bill having been read the third time, the
question is, Shall the bill pass?
The yeas and nays have been ordered. The clerk will call the roll.
The legislative clerk called the roll.
Mr. NICKLES. I announce that the Senator from Utah (Mr. Hatch), the
Senator from Missouri (Mr. Bond), the Senator from New Mexico (Mr.
Domenici), the Senator from Arizona (Mr. McCain), the Senator from
Alabama (Mr. Sessions), and the Senator from Alabama (Mr. Shelby) are
necessarily absent.
I further announce that, if present and voting, the Senator from Utah
(Mr. Hatch) would vote ``yea.''
Mr. REID. I announce that the Senator from Delaware (Mr. Biden), is
absent attending a funeral.
I further announce that, if present and voting, the Senator from
Delaware (Mr. Biden) would vote ``aye.''
The result was announced--yeas 93, nays 0, as follows:
[Rollcall Vote No. 248 Leg.]
YEAS--93
Abraham
Akaka
Allard
Ashcroft
Baucus
Bayh
Bennett
Bingaman
Boxer
Breaux
Brownback
Bryan
Bunning
Burns
Byrd
Campbell
Chafee
Cleland
Cochran
Collins
Conrad
Coverdell
Craig
Crapo
Daschle
DeWine
Dodd
Dorgan
Durbin
Edwards
Enzi
Feingold
Feinstein
Fitzgerald
Frist
Gorton
Graham
Gramm
Grams
Grassley
Gregg
Hagel
Harkin
Helms
Hollings
Hutchinson
Hutchison
Inhofe
Inouye
Jeffords
Johnson
Kennedy
Kerrey
Kerry
Kohl
Kyl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Lott
Lugar
Mack
McConnell
Mikulski
Moynihan
Murkowski
Murray
Nickles
Reed
Reid
Robb
Roberts
Rockefeller
Roth
Santorum
Sarbanes
Schumer
Smith (NH)
Smith (OR)
Snowe
Specter
Stevens
Thomas
Thompson
Thurmond
Torricelli
Voinovich
Warner
Wellstone
Wyden
NOT VOTING--7
Biden
Bond
Domenici
Hatch
McCain
Sessions
Shelby
The bill (S. 335), as amended, was passed, as follows:
S. 335
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
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'';
[[Page S9986]]
(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) `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;
``(B) `facsimile check' means any matter designed to
resemble a check or other negotiable instrument that is not
negotiable;
``(C) `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
``(D) `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 prominently
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 prominently
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 such entry;
``(III) does not state all terms and conditions of the
sweepstakes promotion, including the rules and entry
procedures for the sweepstakes;
``(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 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; or
``(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;
``(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;
``(II) does not 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 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;
[[Page S9987]]
$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--
``(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--
``(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
[[Page S9988]]
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.
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.
The title was amended 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.''.
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.
____________________