(A) No person, in connection with the sale, lease, or solicitation for sale or lease of goods, property, or service, may represent that another person has a chance to win or to receive a prize, gift, or item of value without clearly and conspicuously disclosing on whose behalf the contest or promotion is conducted and all material conditions that a participant must satisfy. In an oral solicitation all material conditions must be disclosed before requesting the consumer to enter into the sale or lease. In written material, immediately adjacent to the first identification of the prize, gift, or item of value to which it relates; or in a separate section entitled "Award Rules" with the title printed in no less than ten-point bold face type and the section containing a description of the prize, gift, or item of value; and these disclosures must be stated:
(a) the actual retail value of each item or prize, which for purposes of this section are:
(i) the price at which substantial sales of the item were made in the area in which the offer was received within the last one hundred and eighty days; or
(ii) the actual cost of the item of value, gift, or prize to the person on whose behalf the contest or promotion is conducted plus no more than seven hundred percent, but in no case may the cost exceed the person's good faith estimate of the appraised retail value;
(b) the actual number of each item, gift, or prize to be awarded;
(c) the odds of receiving an item, gift, or prize; and
(d) a limitation on eligibility of participation in the contest or promotion.
(B) All disclosures required by this chapter to be in writing must comply with the following:
(1) all dollar values must be stated in Arabic numerals and be preceded by a dollar sign.
(2) the number of each item, gift, or prize to be awarded and the odds of receiving an item, gift, or prize must be stated in Arabic numerals and must be written in a manner that is clear and understandable.
(C) It is unlawful to notify a person that the person will receive a gift, prize, or item of value that has as a condition of receiving the gift, prize, or item of value the requirement that the person pay for or purchase, lease, or rent any goods or services, unless the nature of the charges to be incurred including, but not limited to, a shipping charge or handling charge, have been clearly and conspicuously disclosed. The disclosure must be given:
(1) on the face of written materials; or
(2) before requesting or inviting the person to enter into the sale or lease in an oral notification.
(D) This section does not apply if:
(1) a participant is asked only to complete and mail, or deposit at a local retail commercial establishment, an entry blank obtainable locally or by mail, or to call in the entry by telephone; or
(2) a participant at no time is required to listen to a sales presentation in order to receive the prize or gift or at no time is required to pay for any merchandise, service, or item of value other than as disclosed in the Award Rules.
(E) Nothing in this section creates liability for an act by the publisher, owner, agent, or employee of a newspaper, periodical, radio station, television station, cable-television system, or other advertising medium arising out of the publication or dissemination of an advertisement or promotion governed by this section, when the publisher, owner, agent, or employee did not know that the advertisement or promotion violated this section.
HISTORY: 1994 Act No. 483, Section 1.