Disapproval of merchandising plan involving a lottery
70 F.T.C. 1864 · Aug. 2, 1966 · Digest No. 78
source volume section (70 F.T.C. 1864)
Text is machine-OCR of the printed volume and may contain errors. Advisory opinions are the Commission's views on proposed conduct, not binding orders.
No. 78. Disapproval of merchandising plan involving a lottery. A retailer has been advised hy the Federal Trade Commission that its proposed weekly drawings for portable radio-phonographs would be an unJawfullottery.
Participants would be required to pay two doJJars a week for twenty weeks. The winner each week wiJJ be awarded a radio and will not be required to make any further payments. The participants who do not win wil1 each receive a radio-phonograph at the end of the twenty weeks for which they would have then paid forty doJJars. The retailer advised that it regularly seJJs these instruments for forty dol1ars. This proposaJ, the FTC's advisory opinion stated would constitute a scheme to seJJ merchandise by means of a lottery or game of chance, a sales device long he1d to be iJJegal under laws administered by this agency. The mere fact that each participant receives a thing of value for his contribution does not negate the existence of a lottery nor change the pJan s essential nature as an appeal to the pubJic s gambJing instincts. Clearly, the participants in this drawing wouJd be motivated by the chance of receiving something of morc value than the amount they contributed. Hence , the nature of the appeal is unmistakable. (FiJe "0. 653 7045, released Aug. 2, 1966.
No.
operation. 79. Rejection of deceptive' firm name for skip-tracing The Federal Trade Commission has rejected a proposal by a debt coJJection concern to send out skip-tracing materiaJ under a firm name such as Missing Heirs, Inc. , requesting delinquent ADVISORY OPI ION DIGEST 1865
debtors to contact the company on a matter of importance and to furnish information concerning jobs, addresses, etc. Advising that " this proposal would be dearly iIegal under previous Commission and court decisions dealing with skip-tracing practiees, " the Commission pointed out that its first "case involving a skip-tracing device was decided in 1943 and dealt with an identical subterfuge to that here proposed , that is the attempt to deceive debtors into believing that they were being contacted in connection with the settlement of estates. No matter what the device employed, and there have been many down through the years, the law has set its stamp against this type of deception.
Consequently, the advisory opinion continued, the FTC "cannot approve the use of any representations or trade names which would have the effect of deceiving others as to the true nature of your activity or which fail to reveal that the purpose for which the representations are made or the information requested is that of obtaining information concerning delinquent debtors. (File No. 653 7039, released Aug. 6, 1966.