The Latest Scam: Likely Illegal Sweepstakes
The Market Ticker - Commentary on The Capital Markets
2017-12-01 20:19 by Karl Denninger
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The Latest Scam: Likely Illegal Sweepstakes
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I just noted Amazon doing this as they popped up a "notification" on my phone, and I've seen many others (including Mobile Nations, a widely-read "phone" website which includes Crackberry) doing it as well. (Yes, I had forgotten the app was still on there.  It's not any more!)

Amazon is running a "giveaway" promotion where you have a chance to win.  These are legally sweepstakes (not "contests" -- games of skill, or "lotteries" -- games of chance in which you pay to play) and must comply with both State and Federal laws.

Some states -- such as Florida -- have bonding requirements in some instances.  A whole bunch of people ignore that, but you ought not to because if a Florida resident can "play" you're in violation if you don't comply with it no matter where you physically are.  Florida is not the only state with such requirements either.

But leave the state-specific stuff aside; let's look at the general rules that apply everywhere, which I know a fair bit about because we did these from time to time at MCSNet.

First, the game must be of chance.  That is, it must truly be unbiased and random in terms of choosing winners.  You don't have to be able to prove lottery-style random number generators are used (picking tickets out of a hat by someone unrelated who turns their head is sufficient) but you cannot bias the outcome to favor some entries over others.  If the game involves skill then it's an entirely different thing (a "contest") and different laws apply.

Second, something of value has to be able to be won.  Since nobody would play if there was no "prize" this is usually not very difficult to figure out....

And third, the player may not be required to provide consideration in exchange for his or her entry.

This last one is where the minefield is with regard to these current sweepstakes.

You may notice that the ones you get in the mail (like the old Publisher's Clearing House or the NRA's fairly-frequent "Win 21 Guns!" ones) all say "no purchase required to win."  So does Amazon's.  That's because if you have to buy something to enter then it's a lottery and those are generally illegal (there are exceptions -- like raffles at various non-profit functions -- but none apply to the general business entity putting them out there for the public.)

But "consideration" under the law is not merely the payment of money -- it's anything of value.

It used to be that some states had ruled that forcing someone to put a postage stamp on an entry was consideration!  This was why you'd see things like "Void in Blah" on the "Sweepstakes" you'd get in the mail from Publisher's Clearing House years ago -- it was illegal for you to have to spend anything, including a stamp on an envelope, to enter.  Some jurisdictions have ruled that since Internet Access is not free if you have to sign into an Internet site that is consideration.  This used to be more-common back when I was running MCSNet; I have no idea if any jurisdiction would consider that a problem today, but it gives you some sort of idea of the scope of the issue:  In short the scope of what is "consideration" not only varies from state to state it is a hell of a lot broader than you think it is.

For example, the following is probably illegal:

"Click here to enter; no purchase required.  One entry per person.  Gain additional entries (5) by liking us on Facebook (button here), gain 2 entries by tweeting the contest (button here), etc."

The latter gives someone better odds in exchange for something of value to the site owner -- additional traffic and exposure.  Similarly, a sweepstakes that gave you a second entry for bringing someone to the store in the mall with you would likely be illegal as well because additional customer traffic is of value to the store or mall.

Well, here's the Amazon app's display:

 by tickerguy

This is questionable at best just like the "five extra entries for liking us on Facebook" since all of those "features" have value to Amazon in that they either (1) provide more data to them on your shopping habits or (2) are likely to directly lead to a purchase.

The original "click to enter" solicitation is probably (provided there's an "other than by loading our app" means of entry) legal, since it does not require that you provide consideration.  The giving of additional chances to win in exchange for doing something that is of value to the vendor is almost-always not legal, as that turns the sweepstakes into a lottery.

I have seen a crazy proliferation of these sorts of "sweepstakes" over the last number of months, but with the holiday season being full-bore they're coming fast and hard now and nearly all of them that I've seen of late contain features like the above that I would not have dreamed of attempting back in the 1990s because if I had I would have expected to be sued out of existence by the State Attorney General, the FTC or both.

That our nation no longer has a Rule of Law, no longer has a functional Attorney General and no longer has a functional Federal Trade Commission, the latter two of whom should be after this like stink on **** never mind all the State Attorneys General, is why this crap goes on and you continue to be exploited in this fashion today.

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User Info The Latest Scam: Likely Illegal Sweepstakes in forum [Market-Ticker]
Posts: 78
Incept: 2013-02-13

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Gen, did you check the URL? I see these all the time on my phone on ZeroHedge. Don't see them on the PC. On the phone, they always hijack the website I'm on. The URL is always amazon.we.will.**** Is this Amazon, or is this advertisers lowering their quality to make money? I know you don't like Amazon and Google, but they do rely on brand equity, and pulling this sort **** can dilute it quite quickly.
Posts: 150661
Incept: 2007-06-26
A True American Patriot!
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This was a direct notification from the Spamazon App on my Android phone (not a URL), which I had neglected to delete quite some time ago -- it was just not in any of my folders, so I didn't realize it was still there.

When it started popping up notifications, of course I noticed it.....

If you have the app on your phone you can trivially find it by opening the app directly and the notification opens the app to that page, so yeah, it's legitimately from them.

The spam is even worse but I don't blame that on the company being hijacked, of course. I don't see 99% of that as my spam filter tosses nearly all of it in the trash immediately unseen......

Winding it down.

Posts: 22
Incept: 2011-03-23

Memphis, TN
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I'm not seeing anything there which would give you additional entries to the sweepstakes. All that appears to be on offer is a notification for when the "final giveaway" goes live. Have I misread the display?
Posts: 150661
Incept: 2007-06-26
A True American Patriot!
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The "final giveaway" appears to require a second entry, which you acquire notice of the ability to enter by doing those things.

Winding it down.

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