[Congressional Record Volume 145, Number 152 (Tuesday, November 2, 1999)]
[House]
[Pages H11240-H11248]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DECEPTIVE MAIL PREVENTION AND ENFORCEMENT ACT
Mr. McHUGH. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 170) to require certain notices in any mailing using a game
of chance for the promotion of a product or service, and for other
purposes, as amended.
The Clerk read as follows:
H.R. 170
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) such matter does not contain a false representation
stating or 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) such matter does not contain a false representation
stating or implying that Federal Government benefits or
services will be affected by any contribution or
noncontribution; or'';
(3) by redesignating subsections (j) and (k) as subsections
(m) and (n), respectively; and
(4) by inserting after subsection (i) the following:
``(j)(1) Any matter otherwise legally acceptable in the
mails which is described in paragraph (2) is nonmailable
matter, shall not be carried or delivered by mail, and shall
be disposed of as the Postal Service directs.
``(2) Matter described in this paragraph is any matter
that--
``(A) constitutes a solicitation for the purchase of or
payment for 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 set forth in clauses (i) and
(ii) of subparagraph (A).''.
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--
``(A) the term `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) the term `facsimile check' means any matter that--
``(i) is designed to resemble a check or other negotiable
instrument; but
``(ii) is not negotiable;
``(C) the term `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) the term `sweepstakes' means a game of chance for
which no consideration is required to enter.
``(2) Except as provided in paragraph (4), any matter
otherwise legally acceptable in the mails which is described
in paragraph (3) is nonmailable matter, shall not be carried
or delivered by mail, and shall be disposed of as the Postal
Service directs.
``(3) Matter described in this paragraph is any matter
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 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;
[[Page H11241]]
``(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
or services may be disqualified from receiving future
sweepstakes mailings;
``(VII) requires that a sweepstakes entry be accompanied by
an order or payment for a product or service previously
ordered;
``(VIII) represents that an individual is a winner of a
prize unless that individual has won such 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 shall be exempt from paragraph (2) if such
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.
Any statement, notice, or disclaimer required under subclause
(I) or (II) of paragraph (3)(A)(ii) shall be displayed more
conspicuously than would otherwise be required under the
preceding sentence.
``(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 or outside cover or wrapper in which those
materials are mailed.
``(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, or 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),'' each place it
appears; and
(2) by inserting ``, (j), or (k)'' after ``(i)'' each place
it appears.
SEC. 5. TEMPORARY RESTRAINING ORDER FOR DECEPTIVE MAILINGS.
(a) In General.--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 section 3005, the Postal Service may, under
the provisions of section 409(d), 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 the 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 section
3005.
``(B) A proper showing under this paragraph shall require
proof of a likelihood of success on the merits of the
proceedings under section 3005.
``(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 not clearly
shown to be the subject of proceedings under section 3005.
``(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 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.''.
(b) Repeal.--
(1) In general.--Section 3006 of title 39, United States
Code, and the item relating to such section in the table of
sections for chapter 30 of such title are repealed.
(2) Conforming amendments.--(A) Section 3005(c) of title
39, United States Code, is amended by striking ``section and
section 3006 of this title,'' and inserting ``section,''.
(B) Section 3011(e) of title 39, United States Code, is
amended by striking ``3006, 3007,'' and inserting ``3007''.
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 paragraphs (1) and (2) of subsection (b) by
inserting after ``of subsection (a)'' the following: ``, (c),
or (d)'';
(3) by redesignating subsections (c) and (d), as
subsections (e) and (f), respectively; and
(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.''.
SEC. 7. ADMINISTRATIVE SUBPOENAS.
(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) Subpoena Authority.--
``(1) Investigations.--
``(A) In general.--In any investigation conducted under
section 3005(a), 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 considers
relevant or material to such investigation.
``(B) Condition.--No subpoena shall be issued under this
paragraph except in accordance with procedures, established
by the Postal Service, requiring that--
``(i) a specific case, with an individual or entity
identified as the subject, be opened before a subpoena is
requested;
``(ii) appropriate supervisory and legal review of a
subpoena request be performed; and
``(iii) delegation of subpoena approval authority be
limited to the Postal Service's General Counsel or a Deputy
General Counsel.
``(2) Statutory proceedings.--In any statutory proceeding
conducted under section 3005(a), the Judicial Officer may
require by
[[Page H11242]]
subpoena the attendance and testimony of witnesses and the
production of any records (including books, papers,
documents, and other tangible things which constitute or
contain evidence) which the Judicial Officer considers
relevant or material to such proceeding.
``(3) Rule of construction.--Nothing in paragraph (2) shall
be considered to apply in any circumstance to which paragraph
(1) applies.
``(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 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 the amendment made by
subsection (a).
(c) Semiannual Reports.--Section 3013 of title 39, United
States Code, is amended by striking ``and'' at the end of
paragraph (4), by redesignating paragraph (5) as paragraph
(6), and by inserting after paragraph (4) the following:
``(5) the number of cases in which the authority described
in section 3016 was used, and a comprehensive statement
describing how that authority was used in each of those
cases; and''.
(d) 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--
``(1) the term `promoter' means any person who--
``(A) originates and mails any skill contest or
sweepstakes, except for any matter described in section
3001(k)(4); or
``(B) originates and causes to be mailed any skill contest
or sweepstakes, except for any matter described in section
3001(k)(4);
``(2) the term `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) the terms `skill contest', `sweepstakes', and
`clearly and conspicuously displayed' have the same meanings
as given them in section 3001(k); and
``(4) the term `duly authorized person', as used in
connection with an individual, means a conservator or
guardian of, or person granted power of attorney by, such
individual.
``(b) Nonmailable Matter.--
``(1) In general.--Matter otherwise legally acceptable in
the mails described in 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 described in
this paragraph is any matter that--
``(A) is a skill contest or sweepstakes, except for any
matter described in 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 60 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) Private Right of Action.--
``(1) In general.--An individual who receives one or more
mailings in violation of subsection (d) may, if otherwise
permitted by the laws or rules of court of a State, bring in
an appropriate court of that State--
``(A) an action to enjoin such violation,
``(B) an action to recover for actual monetary loss from
such a violation, or to receive $500 in damages for each such
violation, whichever is greater, or
``(C) both such actions.
It shall be an affirmative defense in any action brought
under this subsection that the defendant has established and
implemented, with due care, reasonable practices and
procedures to effectively prevent mailings in violation of
subsection (d). If the court finds that the defendant
willfully or knowingly violated subsection (d), the court
may, in its discretion, increase the amount of the award to
an amount equal to not more than 3 times the amount available
under subparagraph (B).
``(2) Action allowable based on other sufficient notice.--A
mailing sent in violation of section 3001(l) shall be
actionable under this subsection, but only if such an action
would not also be available under paragraph (1) (as a
violation of subsection (d)) based on the same mailing.
``(f) 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--
[[Page H11243]]
``(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.
``(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) derived
from a list described in 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.
``(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 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, in accordance
with the same procedures as set forth in section 3012(b),
provide for the assessment of 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. TECHNICAL AND CONFORMING AMENDMENTS.
(a) References to Repealed Provisions.--Section 3001(a) of
title 39, United States Code, is amended by striking
``1714,'' and ``1718,''.
(b) Conformance With Inspector General Act of 1978.--
(1) In general.--Section 3013 of title 39, United States
Code, is amended--
(A) by striking ``Board'' each place it appears and
inserting ``Inspector General'';
(B) in the third sentence by striking ``Each such report
shall be submitted within sixty days after the close of the
reporting period involved'' and inserting ``Each such report
shall be submitted within 1 month (or such shorter length of
time as the Inspector General may specify) after the close of
the reporting period involved''; and
(C) by striking the last sentence and inserting the
following:
``The information in a report submitted under this section to
the Inspector General with respect to a reporting period
shall be included as part of the semiannual report prepared
by the Inspector General under section 5 of the Inspector
General Act of 1978 for the same reporting period. Nothing in
this section shall be considered to permit or require that
any report by the Postmaster General under this section
include any information relating to activities of the
Inspector General.''.
(2) Effective date.--This subsection shall take effect on
the date of enactment of this Act, and the amendments made by
this subsection shall apply with respect to semiannual
reporting periods beginning on or after such date of
enactment.
(3) Savings provision.--For purposes of any semiannual
reporting period preceding the first semiannual reporting
period referred to in paragraph (2), the provisions of title
39, United States Code, shall continue to apply as if the
amendments made by this subsection had not been enacted.
SEC. 11. EFFECTIVE DATE.
Except as provided in section 8 or 10(b), this Act shall
take effect 120 days after the date of enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New
York (Mr. McHugh) and the gentleman from Illinois (Mr. Davis) each will
control 20 minutes.
The Chair recognizes the gentleman from New York (Mr. McHugh).
General Leave
Mr. McHUGH. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
on H.R. 170, the bill now under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from New York?
There was no objection.
Mr. McHUGH. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I am pleased to bring H.R. 170, as amended, to the floor
today and would like to take this opportunity to thank the members of
my Subcommittee on the Postal Service for their interest, for their
hard work in moving this important legislation, particularly thanking
the ranking member, the gentleman from Pennsylvania (Mr. Fattah), for
his input in making this bill stronger and of a wider appeal.
Mr. Speaker, I would like to also quote from the testimony of the
General Accounting Office at the subcommittee's August 14 meeting,
which I think summed it up very well, ``When it comes to deceptive
mail, which includes sweepstakes and other kinds of mail material,''
quote, ``consumers' problems appear substantial.''
We are all concerned, Mr. Speaker, with the way sweepstakes mailings
entice customers, particularly senior citizens, into making unwanted
purchases under the mistaken impression that this will somehow enhance
their chances of winning.
As I have stated previously, sweepstakes in and of themselves are not
evil. In fact, Mr. Speaker, they are often a marketing tool that are
accessed by willing and very satisfied individuals, but experience
teaches us that when laws fall short, the dishonest often flock and
people ultimately will suffer. Now is the time to correct these
shortfalls.
H.R. 170, as amended, was carefully developed with our ranking
member, the gentleman from Pennsylvania (Mr. Fattah), and the bill's
original author, the gentleman from New Jersey (Mr. LoBiondo). In
keeping with H.R. 170's objective of ensuring honesty in sweepstakes
mailing, the amended language incorporates and responds to the
extensive testimony submitted at the hearing conducted by the
Subcommittee on the Postal Service.
The gentleman from New Jersey (Mr. LoBiondo) is to be commended for
championing the necessary changes to our postal laws in this area, and
I also, Mr. Speaker, deeply appreciate the assistance of our other
colleagues; as I mentioned earlier, the gentleman from Pennsylvania
(Mr. Fattah), the ranking member, but as well the language in this bill
reflects the input of others who also introduced legislation, including
the gentleman from California (Mr. Rogan), the gentleman from Florida
(Mr. McCollum), authors of H.R. 237 and H.R. 2678 respectively.
This language is also based upon Senator Susan Collins' comprehensive
bipartisan sweepstakes mailing legislation, which passed in the other
body by a 93-to-0 vote on August 2. We certainly are indebted to Ms.
Collins and to her staff and the other members of the other body for
their interest, for their leadership, and for their guidance.
Mr. Speaker, we have drawn from many sources to craft what I believe
is a reasonably balanced and effective piece of legislation. H.R. 170,
as amended, would establish strong consumer protections to prevent a
number of types of deceptive mailings. It would impose various
requirements on sweepstakes mailings, skills contests, facsimile checks
and mailings made to look like government documents. It would establish
as well strong financial penalties, provide the Postal Service with
additional authority to investigate and stop deceptive mailings and
preserve the ability of States to impose stricter requirements on such
mailings.
Mr. Speaker, I would strongly encourage all Members to fully support
the legislation before us. We should join with the other body in
advancing this important cause. America's consumers, particularly our
senior citizens, are counting on us.
Mr. Speaker, I reserve the balance of my time.
Mr. DAVIS of Illinois. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, let me first of all commend and congratulate the
gentleman
[[Page H11244]]
from New York (Chairman McHugh), and the ranking member, the gentleman
from Pennsylvania (Mr. Fattah) for the very efficient, effective and
bipartisan manner in which they have shepherded this legislation
through committee.
I also want to commend the gentleman from New Jersey (Mr. LoBiondo)
for the significant role that he played in making sure that we had a
good, strong bill and that we have it before us today.
As a member of the Subcommittee on the Postal Service, I am pleased
to join the gentleman from New York (Mr. McHugh) in the consideration
of H.R. 170, the Honesty in Sweepstakes Act of 1999. When signed into
law, the legislation will protect vulnerable consumers from
unscrupulous operators of deceptive sweepstakes and stop many of the
more abusive practices of the sweepstakes industry.
We in the Congress have learned firsthand the financial and emotional
costs to consumers from deceptive and fraudulent sweepstakes. This is a
serious problem which plagues our elderly and those on limited budgets.
To that end, I am proud to have played a part in the House
consideration and markup of the Honesty in Sweepstakes Act of 1999.
Last month, the Subcommittee on the Postal Service marked up H.R. 170
and unanimously approved an amendment in the nature of a substitute
offered by the ranking minority member, the gentleman from Pennsylvania
(Mr. Fattah) and the gentleman from New York (Mr. McHugh).
Our bill, which closely mirrors sweepstakes legislation passed by the
Senate in August, would impose disclosure requirements relating to
sweepstakes mailings and skill contests, contests in which a prize is
awarded based on skill and a purchase payment or donation is required,
concerning rules, terms, conditions, sponsor, place of business of
sponsor, odds of winning and other information, to help ensure the
consumer has complete information about the contest.
It also prohibits mailings that suggest a connection to the Federal
Government or that contain false representations implying that Federal
Government benefits or services will be affected by participation or
nonparticipation in the contest. It requires that copies of checks sent
in any mailing must include a statement on the check itself stating
that it is nonnegotiable and has no cash value. It requires certain
disclosures to be clearly and conspicuously displayed in certain parts
of the sweepstakes and skill contest promotion. It requires sweepstakes
companies to maintain individual do-not-mail lists and it gives the
Postal Service additional enforcement tools to maintain and investigate
and stop deceptive mailings, including the authority to impose civil
penalties and subpoenas.
The measure before us today adds two very important and critical
provisions. First, we provide the Postal Service with subpoena
authority to combat sweepstakes fraud and, in addition, we have limited
the scope of subpoena authority to only those provisions of law
addressing deceptive mailings and required the Postal Service to
develop procedures for the issuance of subpoenas. So the issue of
consumer protection, whether it relates to telemarketing fraud or
sweepstakes deception, is finally receiving the attention it deserves
and I am pleased that we are here today at this point and at this time
to pass this important legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. McHUGH. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from
New Jersey (Mr. LoBIONDO) who, as I mentioned during my opening
remarks, was really a leader in this effort. Through his initiative, in
fact, the question was first brought to the attention of our
subcommittee last year and, in large measure, this is a product of his
efforts.
(Mr. LoBIONDO asked and was given permission to revise and extend his
remarks.)
Mr. LoBIONDO. Mr. Speaker, let me take a moment to first thank my
colleague from New York (Mr. McHUGH) for his leadership with the
subcommittee and particularly on this issue. The hearing that was held
really focused in on the problem, I think, in a very specific way and
it allowed us to convince many of our colleagues of the importance of
this issue.
I want to thank the gentleman from Indiana (Mr. Burton), the chairman
of the full committee, and the gentleman from Illinois (Mr. Davis) and
the gentleman from Pennsylvania (Mr. Fattah) for their help, and my
colleague, the gentleman from California (Mr. Condit), for his help in
garnering votes from the other side and support from the other side.
Mr. Speaker, thousands, if not millions, of Americans will receive
some sweepstakes mailing today. Most people disregard these mailings as
the marketing ploy that they are. Unfortunately, there are a small
percentage of consumers who will open the package with excitement and
carefully return the enclosures, often with a payment, in the hope of
becoming America's latest millionaire.
Most likely to be impacted by these fraudulent and misleading
mailings are some of the most vulnerable in our society, our senior
citizens. Sadly, these vulnerable consumers are not being duped merely
into entering a hopeless contest. They are, in fact, encouraged to
purchase goods from these sweepstakes companies in the thought that
these purchases will give them a better chance of winning a huge sum of
money.
For seniors, most of whom are on a fixed income, this frivolous
spending in the hope of winning untold riches is having an especially
detrimental effect. There are stories that abound of life savings being
lost, of seniors whose lives are devastated because they feel that they
have had an opportunity to gain an advantage in a sweepstakes that was
never there from the beginning.
My legislation will prohibit many tactics sweepstakes company use to
prey on our most vulnerable consumers. Misleading language such as ``we
would feel better if we were giving the prize to a customer'' leads
people to believe that a purchase enhances the chances of winning, when
it really does not. My bill takes significant steps to prevent
vulnerable members of our society from being harmed by predatory
sweepstakes companies.
The key provision of H.R. 170 requires that certain clear and easy-
to-read honesty disclosures be included in each sweepstakes mailing.
{time} 1330
First, each mailing must include language stating that purchase is
not necessary to win a prize, nor does it enhance the chances of
winning a prize. It additionally requires other important information
such as the odds of winning the grand prize to be displayed prominently
in the mailing.
The bill would further crack down on cashier's checks and government
document look-alikes, which obviously confuse many seniors and have to
lead us to conclude it was the intention to mislead and confuse
seniors.
So in conclusion, I want to thank all of my colleagues who worked so
hard on this. I think we have a chance to make a real difference today
with those in our society who have been the recipients of tactics that
all of us wish we could change. We can change that today with this
legislation.
Again, I urge all my colleagues to support H.R. 170.
Mr. DAVIS of Illinois. Mr. Speaker, I yield such time as she might
consume to the gentlewoman from New York (Ms. Slaughter), who has long
been a protector of consumer interests and consumer rights.
Ms. SLAUGHTER. Mr. Speaker, I certainly thank the gentleman from
Illinois (Mr. Davis) for allowing me to speak, and I appreciate his
support.
I want to thank the gentleman from New Jersey (Mr. LoBiondo) for
bringing this to the floor and the gentleman from New York (Mr. McHugh)
for his support.
Just take a look at this. Right here, it says up at the top,
``Attention: Time-sensitive material. Contents to be opened by
addressee only. Obstruction of U.S. mail punishable by fines up to
$2,000 and 5 years imprisonment.''
Now, imagine, one gets this envelope, which looks very much like the
one one's Social Security check comes in, and it has everything in the
world to make it look like it came from the government. Official
communication, it says up there. Extremely urgent. Respond within 5
business days.
Then over on the back, again, it says, ``Documents enclosed intended
for the
[[Page H11245]]
sole use of the addressee. Tampering is a Federal offense.''
This chart has been enlarged 4,000 times, and it is still barely
readable. The fact that everybody, as the gentleman from New Jersey
(Mr. LoBiondo) said, is getting one of these almost every day in the
mail is really a scandal. We know they are designed to confuse and
mislead the recipients.
Virginia Tierney from the AARP pointed out in her testimony that
these deceptive sweepstakes lead older Americans to send in thousands
of dollars from their Social Security checks and lifetime savings
because they believe what is often also written on here, ``you have
automatically won.''
But I want to focus a specific provision of this bill that addresses
a strong concern of mine, and that is what I just pointed out, that
this mail looks as though it has been distributed or endorsed by a
government agency.
The companies are sending these facsimile checks usually in window
envelopes that are specifically designed to look like the Social
Security envelope. This government look-alike mail motivates the senior
to at least open the envelope.
I did not hear about this deceptive mailing practice from my
constituents because my colleagues may notice that this was addressed
to me, this official communication, which I tampered with at my peril.
Now, in very small print back here on the back of the envelope going
on for 33 lines is the official rules detailing that this is in reality
a sweepstakes solicitation. It is not a private government document
carrying great threats. How dare they usurp government authority in an
attempt to frighten people.
I have to be honest, I got dizzy counting the number of lines the
small print goes on for. That was because I had tried to read this
before it was enlarged. A senior citizen would have to enlarge this
envelope to poster size like I did before they could read this small
print.
This bill would close the loophole and prohibit all mailings that
could reasonably look like government documents in any way, shape, or
form, period. Sweepstakes companies need to stop misleading the
American people, especially our seniors.
It is past time that the House of Representatives votes to stop these
deceptive mailings, and I am more than delighted that this bill has
come to the floor.
Mr. McHUGH. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, as I mentioned to the gentleman from New Jersey (Mr.
LoBiondo), the author, and ratified in my comments, we have had a
number of individuals who were early on supporters of this initiative
who had drafted their own approaches from which we drew not just moral
support, but legislative language and approaches to the bill.
Mr. Speaker, I am pleased to yield 2 minutes to the gentleman from
Florida (Mr. McCollum), an individual who has established in this House
a well-deserved reputation as a student of the law and one who had a
great deal of input and we had a great deal assistance from.
Mr. McCOLLUM. Mr. Speaker, I really appreciate the gentleman from New
York (Mr. McHugh) for his work on this bill and bringing it to the
floor, and obviously the gentleman from New Jersey (Mr. LoBiondo) for
introducing it.
I do support the bill. It will reform, as we all know, the deceptive
sweepstakes mailing and establish consumer protections through
financial penalties and by providing the Postal Service with additional
authority to investigate and stop such deceptive mailings. It will also
allow States to impose stricter requirements as they see fit on such
mailings.
We have had a lot of this sort of thing going on in my State of
Florida. We have heard so many of examples. One of them is Eustace Hall
of Brandon, Florida who told a story of having spent thousands of
dollars trying to win a contest to help his daughter pay for law
school. Mr. Hall explained he did not understand there was no
requirement that he make a purchase to enter the contest.
That is just not right. I would like to think that, after this
legislation is enacted, there will not be more cases like Mr. Hall that
we see.
We have been such a hotbed on this that I did introduce a bill that
the gentleman from New York (Mr. McHugh) was referring to, called the
Consumers Choice Sweepstakes Protection Act of 1999. It has been
incorporated in this bill almost in toto.
It is the legislation that would require that sweepstakes mailers
provide a toll free number or mailing address to be used by individuals
wishing to have their names removed from mailing lists or be subject to
a civil fine of $1,000 per violation levied by the Postal Service. This
legislation was endorsed by the 60 Plus Association and strongly
supported by both the AARP and the National Consumers League.
I want to again thank the gentleman from New York (Mr. McHugh), the
chairman of the Subcommittee on Postal Service, and the gentleman from
New Jersey (Mr. LoBiondo) in working with me today on this and to
incorporate this into the bill before us.
I really think what they are doing today in this legislation in H.R.
170 is going to make a big difference in the sweepstakes issue. Most of
us read these, and we do fine with it. We understand it. But there are
a lot of people who flat out do not. Those who do not want to keep
getting these mailings ought to have a chance to say do not send it,
and especially the elderly and their family when they do not want to
see these things coming across so regularly as they do and the volumes
that do.
So I think the toll free number or the mailing address that is
provided in the bill enhances it. Again, I want to thank the gentlemen
for incorporating it in the bill.
Mr. DAVIS of Illinois. Mr. Speaker, it is my pleasure to yield 3
minutes to the gentleman from Texas (Mr. Green). It has been my
experience that whenever there is an issue involving consumers and
their protection and rights and the needs of the people, one would find
the gentleman from Texas (Mr. Green).
Mr. GREEN of Texas. Mr. Speaker, I would like to thank the gentleman
from Illinois (Mr. Davis) for allowing me to speak today. This is
something that is near and dear to each of our hearts as individuals.
A few months ago, the daughter of one of my former constituents, her
mother just passed away, came by our office and brought a box. She had
been sorting through her mother's things. The box was easily bigger
than the podium that I am standing at, Mr. Speaker. It was full of
letter after letter from these sweepstakes promotors, offers for her
mother.
In each mailing was marked in bold print, ``You have won 10 Million
Dollars'' or ``Urgent: Prize Claim Documentation Enclosed'' or ``Open
and Return Immediately For Your Grand Prize.''
Not only had this woman's mother opened each and every one of these
solicitations, but she had fallen into that trap. She thought, due to
the tricky and often misleading wording of the mailings that not only
did she have to purchase something to win, but by purchasing items she
would increase her chances of winning.
This daughter found not only this box of information, but lots of
little things that her mother had bought and literally never opened.
Each time she responded, each time she bought some worthless
knickknack, each time she thought it would finally pay off, all that
would happen is more solicitations came in the mail. It was a vicious
cycle. Because if one responds to one, then obviously they sell one's
name to other people and other groups.
This is a clear example how the sweepstakes industry has taken
advantage and exploited some of our most vulnerable members of our
society.
I even have one family member in my district who tried to get their
mother off the mailing list until, finally, they sent a letter saying,
I am sorry, mom passed away, and it took them two times to do that, to
get them to quit sending her sweepstakes information, just so she would
stop receiving these awful offers and sending them in.
H.R. 170, the Honesty in Sweepstakes Act, will ensure that the same
bold print, not tiny print that one cannot read, will be used to state
that one is not a winner and that purchasing items will not increase
one's odds of winning.
It would require that a toll free number be displayed prominently on
the
[[Page H11246]]
mailing. Those who wish to not receive these mailings will be able to
call that number and be removed from the company's mailing list.
It also provides for penalties for companies that violate or ignore
these rules.
This is a good bill that will help protect not only all Americans,
but particularly older Americans, many of whom are spending significant
portions of their income on these sucker contests. It will be
especially helpful to family members who are care givers to our senior
citizens. I hope my colleagues will vote for its passage.
Mr. McHUGH. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, as we have heard here today, this bill obviously is
addressing concerns that are faced by the entire country, but
particularly among senior citizens. As we know, particularly when it
comes to the State of New York, many of our seniors move to the south
and often Florida. We have had a great deal of input and support by the
Florida delegation on both sides of the aisle in this matter.
Mr. Speaker, I am pleased to yield 2 minutes to the gentleman from
Florida (Mr. Foley), who has been very interested in this issue and
very supportive.
Mr. FOLEY. Mr. Speaker, let me thank the gentleman from New York (Mr.
McHugh) for his leadership on this very important issue that affects
seniors and affects all Floridians and all Americans.
Sadie Stern Ott, age 76, of Seminole, Florida said that for years she
has bought merchandise from sweepstakes companies, even though she knew
that she did not have to buy anything to enter the contest.
She says, ``They send so many envelopes that say `Return this
certificate, saying what would you like to buy, and your merchandise
will be delivered when we visit your home to bring you your prize.' ''
Ott said she waited at home for the prize patrol several times,
especially after the time she got a letter telling her the contest was
down to her and another person. But she never won anything. She said,
``I kind of felt that I had been played for a fool.''
Ott said she spent several hundred dollars on magazines and
knickknacks. Some seniors have spent thousands of dollars. This is
exactly the way the sweepstakes companies cheat seniors out of their
modest incomes. Using bright, shiny envelopes and promises of winning
millions of dollars, these companies get seniors to buy products that
they do not need in hopes of winning large cash prizes. In reality,
these people have little, if any, chance of winning.
At a time when many seniors struggle to pay for rent, food, and
prescription medication, this cruel scam is inhumane and ethically
indefensible.
My own State of Florida has filed suit against Publisher's
Clearinghouse for exactly this activity. The Attorney General has
charged the company with unfair trade practices and unlawful game
promotions.
In addition, Florida, along with three other States, has already won
a $4 million settlement against another sweepstakes company, American
Family Publishers.
Even though law enforcement officials and consumer protection groups
send out notices warning against these mail scams, many people are
still drawn into their game.
These fraudulent practices by sweepstakes companies could almost be
compared to a criminal coming into someone's home and stealing from
them.
I would like to give a special word of thanks to the gentleman from
New Jersey (Mr. LoBiondo) and the gentleman from California (Mr.
Condit) for their work on this bill to establish consumer protections
and to prevent sweepstakes companies from swindling people, especially
seniors, out of their hard-earned money.
Mr. DAVIS of Illinois. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I will enter into the Record a statement from the
Executive Office of the President. I will just read a bit of it. ``The
administration strongly supports H.R. 170, the Deceptive Mail
Prevention and Enforcement Act, that will be considered on the
Suspension Calendar. H.R. 170 would protect consumers against deceptive
mailings and sweepstakes practices and reinforce their rights by
establishing standards for disclosure and financial penalties for
sponsors who fail to comply with those standards.
``H.R. 170 would establish standards for sweepstakes mailings, skill
contests, and facsimile checks. The bill would restrict government
look-alike documents and create a uniform notification system to allow
individuals to remove their names and addresses from all major
sweepstakes mailing lists at one time.
``It would also create strong financial penalties for not disclosing
all terms, conditions, rules, and entry procedures of a contest, the
continuation of mailings after an individual has requested cessation
and the failure to comply with the Postal Service stop order.
``H.R. 170 would increase the authority of the Postal Service to
investigate and stop deceptive mailings while permitting States to
establish a higher level of protection for consumers.
``Congress has heard evidence of widespread confusion by consumers
and clearly misleading mailings and sweepstakes practices. The
administration urges passage of H.R. 170 to protect consumers and
address these concerns.''
I also would like to acknowledge the interest of the gentleman from
New York (Mr. LaFalce), who has had a great deal of interest in this
legislation and had intended to speak with regards to it on the floor
today, and also the gentleman from Illinois (Mr. Blagojevich), who has
introduced legislation in this area.
{time} 1345
Mr. Speaker, I will just wrap up by suggesting that although some
sweepstakes mailings are fair, far too many are not. They deceive
consumers into spending money or making purchases, none of which is
needed, necessary or required. Savvy marketing techniques and
technological advances have allowed sweepstakes promoters to target
consumers who respond to the mailings or place orders for products.
Mailings often use very aggressive marketing techniques, such as
personalizing an address and implying if purchases are not made, the
customer may lose her or his preferred customer status. In the most
egregious cases, customers have received up to hundreds of mailings a
year and spent thousands of dollars ordering items they did not want or
need in an attempt to win the big prize.
These deceptive tactics have resulted in thousands of consumer
complaints to the Federal Trade Commission, to State Attorneys General,
the United States Postal Service, and Members of Congress. Sadly, the
victim of these marketing tactics are the elderly, who have difficulty
reading the fine print, and believe that in order to be a preferred
customer, that they must buy to win that prize.
This is, indeed, an idea now whose time has come. For many years we
have looked at this issue and many people have wondered why we have not
taken action before. Well, thanks to the gentleman from New Jersey (Mr.
LoBiondo) and the gentleman from California (Mr. Condit), certainly to
the chairman of the subcommittee, the gentleman from New York (Mr.
McHugh) and the ranking member, the gentleman from Pennsylvania (Mr.
Fattah), we are indeed taking action and we are taking action today.
Mr. Speaker, I submit for the Record the letter I mentioned earlier
in my remarks.
H.R. 170--Deceptive Mail Prevention and Enforcement Act
The Administration strongly supports H.R. 170, the
Deceptive Mail Prevention and Enforcement Act, that will be
considered on the suspension calendar. H.R. 170 would protect
consumers against deceptive mailing and sweepstakes practices
and reinforce their rights by establishing standards for
disclosure and financial penalties or sponsors who fail to
comply with those standards.
H.R. 170 would establish standards for sweepstakes
mailings, skill contests, and facsimile checks. The bill
would restrict ``government look-alike'' documents and create
a uniform notification system to allow individuals to remove
their names and addresses from all major sweepstakes mailing
lists at one time. It would also create strong financial
penalties for: not disclosing all terms, conditions, rules,
and entry procedures of a contest; the continuation of
mailings after an individual has requested cessation; and the
failure to comply with a Postal Service ``stop order.'' In
addition, H.R. 170 would increase the authority of the
[[Page H11247]]
Postal Service to investigate and stop deceptive mailings
while permitting States to establish a higher level of
protection for consumers.
Congress has heard evidence of widespread confusion by
consumers and clearly misleading mailing and sweepstakes
practices. The Administration urges passage of H.R. 170 to
protect consumers and address these concerns.
Mr. Speaker, I have no further requests for time and I yield back the
balance of my time.
Mr. McHUGH. Mr. Speaker, may I inquire of the Chair how much time is
remaining?
The SPEAKER pro tempore (Mr. Sununu). The gentleman from New York
(Mr. McHugh) has 7 minutes remaining.
Mr. McHUGH. Mr. Speaker, I yield 3\1/4\ minutes to the gentleman from
Florida (Mr. Miller), another member of the Florida delegation that has
been so supportive in this effort, and also I might add the sometimes
the winter Congressman of my mother, who visits from New York State. So
we particularly appreciate his support.
Mr. MILLER of Florida. Mr. Speaker, I wish to rise in strong support
of the H.R. 170, the Deceptive Mail Prevention and Enforcement Act and
thank the gentleman from New York (Mr. McHugh) and also the gentleman
from New Jersey (Mr. LoBiondo) for their support in bringing this
legislation to the floor today.
This legislation will help protect Americans from deceptive
sweepstakes mailings and other types of deceptive mailings. This is one
of the most important consumer issues to come before the 106th
Congress, and I view H.R. 170 as one of the Committee on Government
Reform's major accomplishments this year. It is a good bill that all my
colleagues, Republicans, Democrats, liberals, conservatives and
moderates can support.
Several bills concerning deceptive sweepstakes mailings, including
H.R. 170, have been introduced in this Congress. Most of my colleagues
have probably heard from constituents who have been victims of these
deceptive sweepstakes mailings, and this is particularly true with
seniors. And with the large number of seniors in my district, this is a
very important piece of legislation, because their stories are
heartbreaking.
This is a serious problem that Congress needs to address. And because
the postal service is an entity of the Federal Government, Congress has
the legal means and the duty to strengthen the law against fraudulent
mailings. And let me say at the outset that not all sweepstakes
mailings are deceptive. Promoters of legitimate sweepstakes have
nothing to fear from this legislation.
In August, the General Accounting Office testified before the
Subcommittee on Postal Service of the Committee on Government Reform
that data has been collected to suggest that consumers were having
substantial problems with deceptive mail. The Federal Trade Commission,
the American Association of Retired Persons, the National Consumers
League also testified on their research in this area and the need for
reform to protect consumers.
The Chief Postal Inspector testified on the Postal Inspection
Service's need for subpoena power and other additional powers to combat
fraudulent mailings. Representatives of the marketers, who send
sweepstakes mailings, also testified before the subcommittee. And I
think the gentleman from New York (Mr. McHugh) has done a great job of
producing a bill that reflects input from all the diverse points of
view.
H.R. 170 requires sweepstakes mailings to clearly and conspicuously
display statements informing consumers that no purchase is necessary to
enter the sweepstakes, and that making a purchase or purchases will not
increase their chances of winning. I believe this is very important.
Because the problem often is that consumers spend large sums of money
to order products they do not need all in the mistaken belief that this
will increase their chances of winning. It does not. If consumers wish
to purchase a product or products, fine, but they need to be made fully
aware that this bears no relation to the odds of winning.
With respect to their odds of winning, H.R. 170 requires this be
clearly disclosed as well. Further, any check facsimile must include a
statement on the check itself that it is nonnegotiable and has no cash
value. H.R. 170 also strengthens existing laws regarding government
look-alike mailings.
H.R. 170 grants the Postal Service additional authority to combat
fraudulent sweepstakes mailings and civil penalties for fraudulent
mailings also are significantly increased.
This legislation does not preempt more restrictive State laws in this
area. A number of State Attorneys General, including the Indiana
Attorney General, has been working very hard on behalf of victims of
fraudulent sweepstakes. It is my hope that all my colleagues will
support H.R. 170.
Mr. McHUGH. Mr. Speaker, I yield 3 minutes to the gentleman from Ohio
(Mr. LaTourette). And I should hasten to add, having just heard from
one of the newest members of the Subcommittee on Postal Service, the
gentleman from Florida (Mr. Miller), we now have the opportunity to
hear from one of the more senior members, and certainly one of the most
active members on the subcommittee, not just on this legislation but on
the broad expansion of issues that we deal with. I am delighted he is
able to join us on the floor today to make comments on this initiative.
(Mr. LaTOURETTE asked and was given permission to revise and extend
his remarks.)
Mr. LaTOURETTE. Mr. Speaker, I thank the chairman for the kind words,
and I rise in strong support of H.R. 170, the Honesty in Sweepstakes
Act of 1999.
I want to thank and congratulate my friend, the gentleman from New
Jersey (Mr. LoBiondo) and also congratulate the chairman of the
subcommittee, the gentleman from New York (Mr. McHugh), and the ranking
member, the gentleman from Pennsylvania (Mr. Fattah), for their
diligence in ensuring that Americans, and the elderly in particular,
are protected from unscrupulous and deceptive mailings.
The need for this legislation, Mr. Speaker, was illustrated to me
rather clearly this year when we conducted a survey in our district
called ``Operation Senior Sweep.'' The project proved to me that
seniors are ruthlessly targeted by these companies, and the more they
respond the more mailings they received. The highly personalized
mailings often lead folks to believe they have won something when they
have not. And there is also strong evidence that people believe their
chances of winning increase if they purchase something. Often the
disclaimers are buried in very fine print.
We found, for instance, one Reader's Digest sweepstakes that carried
a 2 million prize. The odds of winning, buried in very tiny type, were
one in 199 million. Mr. Speaker, the odds of having quintuplets in this
country are one in 85 million. My grandmother, at 89, is more likely to
have quintuplets than she is to win the Reader's Digest sweepstakes.
It is obviously the legislation authored by the gentleman from New
Jersey (Mr. LoBiondo) is needed, and it is also clear that some
companies know the jig is up when it comes to their deceptive mailings.
I will submit for the Record a letter dated September 17, 1999. This
letter was received by the elderly sister of a woman who lives in my
district. It is from the Time Customer Service and, in effect, the
company says it cannot process the woman's order for Time because she
has already ordered too many magazines and books through a sweepstakes.
This is a staggering admission of wrongdoing on Time's part, I
believe. But, unfortunately, this corporate good Samaritan act is way
too late to help this elderly woman. One less magazine subscription is
not going to help her. She has already lost everything she has owned
and saved on sweepstakes.
I also noticed on the plan yesterday a news story about the company
that holds the American Family Publishers sweepstakes contests. It
announced Friday that it has filed for Chapter 11 bankruptcy after
being sued so many times over deceptive and misleading mailings. This
is a sweepstakes, Mr. Speaker, that is pitched by celebrity spokesmen
Ed McMahon and Dick Clark.
Mr. Speaker, I do not know what Ed McMahon has planned for New Year's
Eve, but I do hope that Dick Clark welcomes the new year and the
millennium by dropping the ball on American
[[Page H11248]]
Family Publishers. Mr. Clark should save his good reputation, stick to
American Bandstand and ditch American Scamstand.
Mr. McHUGH. Mr. Speaker, I yield myself such time as I may consume.
As we have heard here today, this bill truly is the product of
bipartisanship and it started with the gentleman from California (Mr.
Condit) and the gentleman from New Jersey (Mr. LoBiondo) and their
work, and I think carried through with the support of the gentleman
from Indiana (Mr. Burton), the chairman of the Committee on Government
Reform, and the ranking member of the full committee, the gentleman
from California (Mr. Waxman), as well as the gentleman from
Pennsylvania (Mr. Fattah) and the gentleman from Illinois (Mr. Davis),
and all the members on both sides of the aisle.
So this is, as we have heard repeatedly, a bill whose time has come.
I urge all our colleagues to join us in supporting it.
Mr. LANTOS. Mr. Speaker, I rise today in strong support of H.R. 170,
the ``Honesty in Sweepstakes Act of 1999.'' This legislation will curb
the devastating effects of one of the most troubling consumer abuses--
deceptive and misleading sweepstakes and other mass mail promotions.
This legislation will help end this horrendous practice which has been
devastating financially and emotionally to many seniors and other
individuals on limited budgets.
Mr. Speaker, millions of Americans receive sweepstakes letters each
year that use deceptive marketing ploys to encourage the purchase of
magazines and other products. Many of my constituents, especially
seniors, regularly receive these offers for products in the mail that
include extravagant promises of money and prizes in order to entice
them to make unnecessary and unneeded purchases.
Some common ploys used by unscrupulous mailers include ``promises''
of huge winnings printed in large type and other enticements such as
``immediate response required--$1 million cash payment pending.'' While
these promises scream out in bold letters, the real details and
conditions are hidden in fine print at the bottom of the last page
where it is hard to find and particularly hard for seniors to read.
Mr. Speaker, each year millions of consumers nationwide are
deliberately misled into believing that they have won or are likely to
win a sweepstakes, when, in fact, they have neither won, nor are they
likely to win. The Honesty in Sweepstakes Act requires that all
mailings which offer prizes through games of chance clearly state that
the recipient has not automatically won.
Another disgusting and deceptive method, Mr. Speaker, is sending
mailings which contain slips of paper which are deceptively printed to
look like cashier's checks, but which are actually worthless. These
marketing tactics unfairly prey on people's hopes and dreams. H.R. 170
requires that all sweepstakes mailings that contain look-like cashier's
checks prominently display that the check itself is non-negotiable and
has no cash value.
One deceptive practice which I find particularly offensive is sending
mailings which are designed to look like a mailing from a Federal
government agency. Seniors have been particularly vulnerable to these
tactics, because they are generally more trusting of these mailings.
H.R. 170 would prohibit mailings that suggest that they are sanctioned
by or connected with the federal government.
Mr. Speaker, H.R. 170 also requires companies that send sweepstakes
or ``skill contests'' through the mail to establish a notification
system, similar to the ``do not call'' lists of tele-marketers under
which consumers can call a toll-free number to be removed from mailing
lists. The legislation also requires that all sweepstakes mailings
contain information about the existence of such ``do not mail'' lists
and how a consumer can place his or her name on such a list. I am
pleased that the bill will also permit individuals who receive a
follow-up mailing after they have requested that their names be removed
from a mailing list to sue sweepstakes companies in state court for
violation of this law.
Mr. Speaker, many consumers spend thousands of dollars each year on
deceptive sweepstakes mailings, often spending their life savings
without ever winning anything. H.R. 170 will help to protect consumers
from unscrupulous operators of deceptive sweepstakes scams and will
help end many of the most abusive practices of the sweepstakes
industry. I urge my colleagues to vote in favor of this important
legislation.
Mr. McHUGH. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from New York (Mr. McHugh) that the House suspend the rules
and pass the bill, H.R. 170, as amended.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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