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Deceptive Sweepstakes Draw NY Fines

In June, H&R Block settled charges brought by the New York Attorney General arising from two sweepstakes programs involving instant-win scratch-off cards. The cards were available at retail when purchasing tax-return preparation services, or online via free registration. The advertisements online, in print, and on radio and television mentioned “no purchase necessary,” but the mentions were fleeting or not conspicuous, according to the NY AG. Further, in-store advertising did not include these words, nor were Official Rules posted in the retail stores. The NY AG noted that under these circumstances, customers who found about the promotions in retail stores had no way to know they could enter online at no charge. The NY AG alleged the lack of disclosure in stores about free entry, coupled with unclear or minor disclosures in the other ads, was false and deceptive. To settle, H&R Block agreed not only to clearly post the Official Rules at participating retail offices, but also to pay $245,000 in penalties and costs. The settlement also requires H&R Block to train employees to direct consumers to information about no purchase means of entry and clearly disclose that alternate means of entry are available whenever advertising mentions entry is available by purchasing an H&R Block service.

There are complex state laws that cover how promotions, chance, skill or combinations, are to be advertised and operated. When marketing globally, rules are more complicated with language, currency, prize notification and disclosure regulations, as well as age and consent requirements on national, provincial or trading-block scale. What is a “skill” or when is “no purchase” required? When does the chance of winning have equal “dignity” when entering without a purchase? These are often subject to varying interpretation—online and offline. Compliance (registration and bonding in some jurisdictions) can seem an endless legal quagmire. Fortunately, Rimon’s Advertising Technology & Media lawyers around the world can help.

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Coping With COPPA

The Children’s Advertising Review Unit recently held that screening for age to avoid collecting personal information from children under 13 was not enough. In Bandai America (the website is Bandai’s Wireless.com site), CARU found that although Bandai’s website had a screening mechanism that asked for a date of birth, there was no tracking once a child put in a birth date. Thus, anyone under 13 could come back and enter a different (inaccurate) date of birth to get by the screen. CARU’s COPPA compliance guidelines require that not only must interactive sites have an age screening mechanism, but there also must be some reasonably effective means of tracking so children can’t get around the screening process. Forewarned is forearmed.

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Who Pays For the Data Security Breach?

Have you received one of those “data security breach” letters? Quick, call the credit bureau and bank. Change the checking, credit card and license numbers. Most financial institutions have absorbed the cost of reissuing payment cards or providing new checks, even when these financial institutions had nothing to do with the security breach. When B.J.’s Wholesale Club disclosed that a theft of credit card information had occurred, two financial institutions sued to recover the costs that resulted from that breach. The institutions claimed B.J.’s breached its legal obligation to maintain the security of the financial institution and should be liable for the damages. Those claims were initially rejected, but have now been revived by the U.S. Court of Appeals for the Third Circuit, which has issued a decision holding these financial institutions were intended third-party beneficiaries of the contract among the retailer, its merchant bank, and the payment card industry, to keep customer data safe. If the retailer breached data protection rules imposed by the payment card industry and the financial institutions were third-party beneficiaries of that  agreement, then any damage and loss could be recovered based on contract law claims. Stay tuned.

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The Doors of Perception Can Sometimes Lead to Harsh Reality

Although the California Appellate Court, Second Appellate District, has designated the actual opinion as NOT FOR PUBLICATION (this means you must consult the rules of the court before you cite this case), this past May, two former members of the famed rock band The Doors were held to have engaged in false advertising under California law by advertising a concert band using that name. Although a jury found the band members not guilty of trademark infringement or unfair competition, the appeals court agreed with the trial court that “false advertising” claims are not the same, and upheld a permanent injunction against the individuals using the name “The Doors,” or any name containing that name. The court’s ruling also precludes the use of the name, voice or likeness of deceased band member Jim Morrison, in promoting concert ticket sales, citing prohibitions under the California statute regarding rights of publicity. Rimon knows publicity and privacy, in California—and throughout the United States and the world. Always know before you show. Call us, we can help.

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You Would Think They Would Know Better

Cyber-Ark Software, a U.S.-based information security company, surveyed information technology professionals at the Infosecurity Europe Expo 2008 in London this past April. They asked 300 senior IT folks attending the Expo about abuses relating to information access, and guess what they found? First, about one-third of all IT professionals surveyed abused their own company’s information access rights policies to view information unrelated to their job (e.g., spying on employees or looking at confidential information). The survey report noted that passwords of IT and systems oversight staff often aren’t required to be changed as often as user passwords—or sometimes not at all. In most cases, IT administrators have free reign to use or abuse access privileges—which apparently happens too often.

The notion of “internal firewalls” is highlighted by this report. While companies often take great pains to protect themselves from external threats, as history has shown us in the physical world, the biggest dangers are from “inside jobs.” Without protections that apply internally, snooping, economic espionage, sabotage, spying and data security risks will remain a looming threat to the information assets of a business enterprise.

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Useless But Compelling Facts – July 2008

There are two forgotten heroes in the saga of America’s struggle for independence who could easily have been hanged for treason. After the Declaration of Independence was adopted in 1776, John Hancock, President of the Continental Congress, together with Charles Thomson, then Secretary of State, sent Thomas Jefferson’s handwritten copy to someone to be printed (200 copies bearing only the signatures of Hancock and Thomson were printed). Then in January 1777, the Continental Congress, wanting signed copies to receive wider circulation, asked another person to undertake the dangerous job. This time, copies contained the typeset names of all 56 signatories. Legal Bytes wants to know who are these brave printers to whom we owe our gratitude? Acknowledgement to Antonio Perez, Chairman and CEO of Kodak, for the article that enlightened me—and now, hopefully, you. If you know the answer, send it to me.

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Useless But Compelling Facts – June 2008 Answer

Last month we asked you how Jack Benny got his stage name. Congratulations to Nigel Sloam, principal in Nigel Sloam & Co. in London—long-time client and friend—who gave us the correct, speediest response. Jack Benny was born Benjamin Kubelsky in Chicago on Valentine’s Day, 1894. His parents lived in nearby Waukegan and there, working as a violinist in the pit band of a local Vaudeville house, Benjamin broke into show business. He hit the road working with a female pianist in an act known as “Salisbury and Kubelsky—From Grand Opera to Ragtime,” but when concert violinist Jan Kubelik’s lawyer objected to the comedic violin-playing and similarities in name, Benjamin changed his name to Ben Benny. With a new partner, “Benny and Woods” continued, but when World War I broke out, Benny enlisted, working in a Navy-sponsored revue touring the Midwest. After the war, Benny went back to vaudeville, doing a monologue as “Ben K. Benny, Fiddleology and Fun.” Although he changed the spelling to “Bennie,” Ben Bernie, an entertainer (also a violinist-bandleader who did monologues), had been doing a similar act longer and guess what—his lawyer contacted young Kubelsky objecting to the similar names. This time, Benjamin changed his stage name for the last time to Jack Benny. The rest, as they say, is history.