Prize and Sweep Stakes Scams
Fraud Prizes, Fraud Contests, False Prizes
The New Jersey Consumer Fraud Act covers many transactions and attempted transactions. One of the areas specifically covered by the New Jersey Consumer Fraud Act is contests. There are numerous limitations and restrictions on providing contests.
If you establish a contest you are not permitted to charge the consumer or contest winner a fee in order that they collect the price. The following is a good example.
A cake shop runs an Internet email campaign sending an email to thousands of potential customers. As part of this campaign they offer to give away 10 free cakes if a specific email is chosen at random. However, one of the terms and conditions is that a fee must be paid by the winning consumer to collect their prize. As an example, there might be a surcharge where shipping and handling fee or some other fee associated with obtaining the winning prize. You must be able to enter the price for free. You must be able to read receive your prize for free.
The reasoning behind this law is relatively simple. You cannot advertise a free contest and then make the winner pay some sort of fee or surcharge. Then the free contest becomes nothing more than a potential profit center for the business of providing contests. As an example of the business gave away 10,000 cookies but charged shipping and handling of $9.99 on each of those cookies the contest becomes a money-making operation from its outset.
This is basically misleading and deceptive advertisement of a free contest or a free prize to the winner. Free must mean free not a charge to collect a gift. There are many other ways a business can potentially process a deceptive consumer contest. Each individual contest must be specifically look at to determine whether the promotional material was misleading, and/or the terms and conditions were misleading.
Each term and condition must be compared to the New Jersey Consumer Fraud Act to determine if it is misleading. Each requirement must be specifically looked at in a contest to see it if it is misleading or has the capacity to mislead. Only then can we decide whether or not a specific contest misleading.
In the same fashion that New Jersey law prohibits deceptive acts or practices New Jersey law prohibits a deceptive contests and giveaways. The same underlying theories protect consumers from those illegal or deceptive contests and giveaways as the New Jersey law protects those who either purchase or attempted purchase goods.
As previously set forth there are specific regulations prohibiting certain deceptive practices including but not limited to requiring consumers to purchase something to obtain and otherwise free item. This is not a contest but a sale. New Jersey law prohibits this type of contest where you are required to pay for a free item. This takes the contest from one which is a giveaway to one which is a disguised sale.
When the analysis of the contest or giveaway is carefully reviewed the basic analytical framework as established by New Jersey law is relatively simple in that the contest must be fair, understandable and without deceiving the plaintiff or the public. In this way the consumer who has been agreed and has sustained an ascertainable loss might pursue the individual or business running the giveaway or contest and recover triple damages and attorney’s fees and costs.
A consumer’s story of a fraudulent contest:( Made up but used as an example)
I received this flyer in the mail from a car dealership. It stated that I won a prize, but I would have to travel to the dealership to fill out a form, have my picture taken, and speak to the salesman after I take a test drive.
I am confused because it says free but it’s not free. Why do I have to go to the dealership and do anything? They must be lying to me because the ad is a fraud and a fake program to sell cars.
Can I sue this car dealership if I think they have distributed and published a fake or misleading contest or drawing?
It’s just upsetting that I was looking for a good deal or an advertisement or some sort of contest as these contests should be for free or at no cost. I have seen these contests on the Internet were you just simply putting your email and they contact you if you win. I don’t mind doing that. However, what I mind is if I enter a contest that claims it is free but it is really not free because I have to do a bunch of different things, including go on a test drive. How is it dealership allowed to get away with this? I want to sue them for my time going to the dealership as I should’ve been working or just want to sue them because I think that what they did was wrong. I’m really not sure as I have many questions, but I think I’m pretty certain that the dealership cannot do this and there must be some sort of liability under the New Jersey law for a fraudulent contest. Are there lawyers New Jersey that handle fraudulent contests? Are there attorneys in New Jersey that handle fraudulent contests? Does the law New Jersey permit me to sue a dealer for a fraudulent contest, and do I need a specific fraudulent contests dealer lawyer? There must be a lawyer New Jersey that handles fraudulent contests. There must be an attorney in New Jersey that handles fraudulent contests. Again, I am just not sure, but a fraudulent contest cannot go unpunished, I have definitely sustained damages.
Another question is what if I go to the dealership and it looks like I won the contest and then I get to the dealership and I have not won the contest? Is in the contest prize or the winnings my damages? Then what would happen if more than one person went to the dealership and tried to claim the prize and they also claim that there damages are the contest winnings? If there’s only one set of winnings how can more than one person get those set of winnings in a lawsuit? Is it the first person that goes to the dealership?
Also, I wonder whether or not the dealership or any business has insurance to cover claims of fraudulent contest. I’m sure a fraudulent contest attorney would be able to tell me if there is insurance that covers this type of activity. One time I played in the golf tournament and my friend was the golf pro. He said that if somebody will not: one contest the dealership and the golf club are not giving the prize way it was an insurance company that was responsible for the price. So, I would guess, that would be similar insurance company that would pay this prize and cover any claims to a winner of a fraudulent price.
Why dealerships do this? Are the dealerships not afraid of the law? Does the will not provide a basis to sue the dealership? These are all questions that I have and I think I need a consultation with the dealership fraudulent advertising attorney or lawyer.
New Jersey has excellent laws prohibiting some deceptive practices for sweepstakes and prizes. In general, the Consumer Fraud Act would apply to sweepstakes Enterprise scams. There is a specific statute prohibiting specific conduct. You cannot offer free prize and then require the payment of any money. The suit be one example. This is an example of a deceptive and impermissible prize or sweepstakes scam