Advertiser that used sweepstakes ploy in charity pitches will clean up its act
Release date: 1/25/2006
Massachusetts direct mail outfit used the promise of prizes to lure donations
Raleigh: An advertising company that used misleading sweepstakes claims to convince people to respond to charity solicitations must change its ways under an agreement announced today, Attorney General Roy Cooper said.
“This company promised prizes but failed to keep its word. Even worse, the deceptive pitches were made in the name of charities,” said Cooper. “This agreement means that future mailings will follow the rules so consumers aren’t misled.”
Cooper and attorneys general from 18 other states reached an agreement with Newport Creative Communications, an advertising company based in Massachusetts that designs direct mail solicitations for several charities. Solicitations developed by Newport for some charities often contained sweepstakes promotions that the states alleged were illegal and misleading. For example, Newport’s mailings promised guaranteed prizes or claimed that recipients had already won a sweepstakes prize: “YOU ARE OUR $6,000 WINNER It's as simple as that,” and “Cash payment to be confirmed upon reply by deadline.”
However, according to the states’ investigation, in most cases no one actually won a prize. Instead, Newport chose a preselected winning number which was enclosed in only one consumer's mailing. If that recipient threw out the mail and did not return the winning number, then the prize was not given away.
A total of 17 consumers complained to Cooper’s office about the deceptive mailings. Charities that used Newport’s sweepstakes mailings in North Carolina include: National Heart Council and National Alzheimer’s Council (both programs of the National Emergency Medicine Association); National Cancer Center, Inc.; National Association for the Terminally Ill; American Breast Cancer Foundation, Inc.; Foundation for Children with Cancer (a program of Reach Our Children, Inc.); and the National Caregiving Foundation.
Under the terms of the agreement, Newport must change its direct-mail pitches to not include claims that the recipient has already won a prize or will be guaranteed a prize if they respond. Newport will no longer create mailings unless a prize will actually be awarded by the charity. The company is also required to state explicitly in its mailings that the consumer has not already won a prize, and that donating to the charity does not improve the chances of winning. In addition to changing their solicitations, Newport will pay $400,000.
Along with North Carolina, states involved in the agreement include: Arkansas, California, Kentucky, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Jersey, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington and Wisconsin.