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Thursday, September 5, 2013

Beware of free gift drawings

Those drawings for free gifts may actually come with a cost to Arkansas consumers who submit contest entries at fairs and festivals this fall.

Consumers should expect to exchange their personal information for chances at gift cards, spa memberships or other prizes when entering contests or sweepstakes, whether at fairs and festivals, or throughout the year at contest booths in malls or retail stores.

Attorney General Dustin McDaniel cautioned Arkansas residents to carefully read the terms and conditions of any contest or sweepstakes before submitting an entry form, and he issued this consumer alert today to inform consumers about their rights.

“When consumers are required to provide phone numbers or email addresses in exchange for the chance to win a free vacation or another prize, they should keep in mind that information could be used or sold to other companies,” McDaniel said. “I urge Arkansas consumers to read the fine print on every contest entry.”

By providing contact information to businesses, consumers could unintentionally open the door to receiving telemarketing calls, promotional materials through the mail and unwanted emails. This is often the case when the contact information is sold to other advertisers. Companies often also share information with their affiliates, which leads to more calls or mail.

By reading the terms and conditions that should be included on contest entry forms, consumers may learn that businesses conducting contests may consider a contest entry as a waiver of rights under federal and state telemarketing laws.

The contest entries may stipulate that, by entering, consumers confirm that they are not on the Do Not Call registry or that they are authorizing sales calls to be made to their phones.
Even though entries may include such a waiver, it is probably not valid under the law. If a consumer signs up for a contest or sweepstakes in which the business conducting the drawing claims that do-not-call protections have been waived, the consumer should contact the Attorney General’s Consumer Protection Division.

Even if the contest entries do not contain a do-not-call disclaimer, the information from the entries may still be used as “lead generators.” Businesses may seek out consumers to offer things like home improvements or spa memberships, but only if consumers first hear a high-pressure sales pitch.

McDaniel said consumers should also be aware that prizes like “free” cruises and vacations may include undisclosed fees and costs, and consumers may be required to foot the bill for their own transportation.

The Attorney General reminded consumers to always read the terms and conditions of every contest entry, and he also provided these tips for those entering contests or sweepstakes at public venues, online or through the mail:
  • Consider avoiding any contest in which a business or promoter refuses to provide a phone number or address by which a consumer can request removal from a mailing list.
  • Remember that most legitimate contests and sweepstakes will not require consumers to pay money or buy something in order to enter a contest.
  • Never pay a “processing” fee in order to claim a prize.
  • Refuse to provide checking account or credit-card numbers over the phone to telemarketers who claim to be calling about a prize or sweepstakes.
  • Be skeptical of notices of sweepstakes wins that are delivered through bulk-rate mail, since they are probably not winners.
  • Be wary of any telemarketer that promotes a contest or sweepstakes that sounds unfamiliar or that a consumer does not remember entering.

 For more information about this or consumer-related issues, visit the Attorney General’s Consumer Protection Division website,, or call the Consumer Protection Hotline at (800) 482-8982.

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