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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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E-Mail. E-Sign. Egad!

The New York Appellate Division has ruled that an email exchange between two parties can amend a contract—even if the agreement specifically states amendments “must be in writing signed by both parties” (Arthur Stevens v. Publicis USA). Here, an employment agreement was the subject of emails between the parties. The court ruled that emails containing the name of the sender in a signature block are a “signed writing” sufficient to amend the contract! Ouch! It is not hard to imagine any email communication with all the elements of a meeting of the minds (“gee, that sounds perfect”), an intent to be bound (“I agree”) and authenticated as attributable to the parties—would fit the argument. Have you looked at your contracts lately? Your outgoing email messages? Our own Peter Raymond and John Webb argued and won this case for our client Publicis USA and have authored a Rimon Bulletin. Our ATM team is working with them to counsel clients on how best to protect themselves in light of this decision.