Consumer Protection & Antitrust BureauConsumer Sourcebook – Prizes & Sweepstakes

The New Hampshire Prizes and Gifts Act (RSA 358-O), the federal Telephone Consumer Protection Act, the federal Fair Credit Billing Act, and other laws all protect consumers from unscrupulous prize promotion schemes.

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"You have won a free trip to the Caribbean!" And, when the snow is deep on the ground and the wind-chill factor is minus 20 degrees, we could all believe that this is a gift from above. Unfortunately, the old saying "There's no such thing as a free lunch" usually applies to prizes and sweepstakes gimmicks. Announcements of prizes and contests may disguise the real purpose of the notice - to sell you products or services. Offers, cleverly disguised to look like a real prize announcement, can come through the mail or over the telephone usually from sellers located in a state other than New Hampshire. Several laws help protect consumers from fraudulent acts.

The Law

The New Hampshire Prizes and Gifts Act (RSA 358-O), the federal Telephone Consumer Protection Act, the federal Fair Credit Billing Act, and other laws all protect consumers from unscrupulous prize promotion schemes.

The Prizes and Gifts Act requires that any business that implies that you have won anything of value, or have won a contest, must:

Give you the prize without obligating you to purchase anything
Deliver the prize, at no expense to you except for reasonable shipping and handling costs that have been clearly disclosed, within ten days of announcing your winning

The language used in the "prize" announcement is not limited to "You have won," "Congratulations," or "You are the winner of." Any language that would lead a reasonable person to believe he or she has been specially selected would constitute a declaration that the consumer has indeed won something. Phrases such as "Carefully selected," "You have been selected to receive," or "You have been chosen" all imply "winning." This type of language should lead you to a careful evaluation of the conditions of the sweepstakes before committing your time and money to fulfill the conditions of winning a prize.

Certain information must be included in any notice that you have won something of value. If a promoter solicits you over the telephone, the following disclosures must be made to you prior to asking you to enter any "contest." The notice must disclose:

The name of the contest's promoter
Any conditions that you have to fulfill to receive the prize
The prize's retail value, the actual number of each prize being awarded, and the odds of receiving each prize in a section clearly titled as "Consumer Disclosure."

Your "winning notice" or the promotion information must clearly disclose any fees (such as shipping and handling charges, or charges for a 900-number call to find out about your prize) associated with claiming your prize. Any attempt to collect a fee that has not been disclosed may violate the Prizes and Gifts Act. Any fees for shipping or handling charged to you must be "reasonable" according to the Prizes and Gifts Act.

One gimmick used by promoters is to issue a "check" to the consumer that, when cashed, enrolls the consumer in some service. A failure to clearly disclose the true value and purpose of the check may also violate the Prizes and Gifts Act. Another ruse is to issue the consumer an invoice demanding payment for goods or services that were never ordered. This "game" is more often played with businesses or non-profits than individual consumers (for more information refer to Watch Out For…Office Supply Scams). A third ploy is to send the consumer documents that look like court or legal papers, or that appear to be from a governmental entity. All these practices violate the statute.

If you receive a sweepstakes or prize solicitation by phone, the promoter must comply with specific Federal Trade Commission regulations under the Telephone Consumer Protection Act of 1991. A telemarketer must give you:

His or her name
The name of the company for which the telemarketer works
The company's telephone number or address

Telemarketing calls can only be made between 8:00 a.m. and 9:00 p.m. (your local time). Any calls outside these hours are illegal. If you are involved in a transaction that involves a company that violates this Act, a court may award you the greater of $500 or your actual monetary loss. For more information on telemarketing, refer to the section on Telemarketing.

If you charged any fees on your credit card related to receiving your prize, and you do not receive the goods, or the goods you receive are different from what you were told, you have some protection under the federal Fair Credit Billing Act. For information on how to proceed, refer to the section in Credit Cards: Dealing with Errors.

Points To Remember

Always read the rules when getting involved with a prize or contest promotion. The contest rules should clearly state the following:
- The entry procedures
- The eligibility requirements
- The number, retail value, and complete description of all prizes
- The odds of winning
- The method of selecting winners
- The geographic area covered and where the offer is void
Remember, rarely do we get something for nothing. Be skeptical of grandiose promises. You should not allow yourself to be lured into entering a sweepstakes or contest if it means buying something you would not normally buy.
Be suspicious of a sweepstakes requiring an entry fee or purchase.

Where To Go If You Have A Problem

Contact the NH Consumer Protection & Antitrust Bureau if you receive a prize or contest promotion that you believe might be in violation of the NH statute:

NH Consumer Protection & Antitrust Bureau
NH Department of Justice
1 Granite Place South
Concord, NH 03301-6397
603-271-3641

Contact the Federal Trade Commission if a telemarketer has violated the federal law:

Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
1-877-FTC-HELP or 1-877-382-4357 (toll-free)
TDD: 1-202-326-2502