Secretary of State Mark Hammond Reaches Agreement With Charity Fundraiser1/25/2006
Secretary of State Mark Hammond, in conjunction with Attorney General Henry McMaster and attorneys general from 18 other states, announced today that an agreement has been reached with Newport Creative Communications over misleading sweepstakes claims the company made in charity solicitations. Newport, a Massachusetts company, is a fundraising consultant for numerous charities.
Solicitations developed by Newport for some of these charities often contain sweepstakes promotions. The states alleged that those promotions were often illegal and misleading, guaranteeing prizes or claiming that recipients had already won a sweepstakes prize. The states also alleged that, in most cases, no prizes were ever awarded despite these misleading claims. Examples of the language used include the following: “YOU ARE OUR $6,000 WINNER It's as simple as that,” and “Cash payment to be confirmed for Mr. John Q. Sample upon reply by deadline.” Newport disputes those claims, and admits no wrongdoing in the agreement.
Under the terms of the agreement, Newport’s direct-mail solicitations will no longer claim that the recipient has already won a prize or will be guaranteed a prize by responding to the charitable solicitation. Newport will also cease creating mailings unless there is a prize ultimately awarded by the charity. The company will also be required to include inserts in its mailings explicitly stating that the consumer has not already won a prize, and that donating to the charity does not improve their chances for winning.
In addition to changing their charity pitches, Newport will also pay $400,000 to the states. South Carolina will receive $21,000 - with $16,000 going to the Secretary of State’s Office and $5000 going to the Attorney General’s office.
“Using sweepstakes claims to solicit money from consumers is nothing new,” said Secretary of State Mark Hammond. “Any company making such claims, especially on behalf of a charity, must be forthright and honest with consumers and avoid deceptive tactics. This agreement will ensure that Newport’s future solicitations follow the rules.”
The states involved in the agreement include: Arkansas, California, Kentucky, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington and Wisconsin.