BILL ANALYSIS
SB 1400
Page 1
Date of Hearing: July 9, 2008
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mark Leno, Chair
SB 1400 (Simitian) - As Amended: July 2, 2008
Policy Committee: Business and
Professions Vote: 7-1
Judiciary 7-3
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill amends California's sweepstakes law to require
additional disclosures and consumer protections. Specifically,
this bill:
1)Applies all current and new requirements regarding
solicitation materials containing sweepstakes-related
materials to include solicitation materials selling
information regarding sweepstakes.
2)Prohibits solicitation materials containing sweepstakes entry
materials and solicitation materials selling information
regarding sweepstakes from representing that:
a) A person has been specially selected in connection with
a sweepstakes unless it is true.
b) A person receiving the solicitation has received any
special treatment or personal attention from the
sweepstakes sponsor unless that representation is true.
c) A person is being notified a second or final time of the
opportunity to receive or compete for a prize, unless that
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representation is true.
d) A prize notice is urgent or otherwise convey an
impression of urgency unless there is a limited time period
in which the recipient must take some action to claim, or
be eligible to receive a prize, and the date by which that
action is required appears immediately adjacent to each
representation of urgency.
3)Prohibits solicitation materials containing sweepstakes entry
materials and solicitation materials selling information
regarding sweepstakes from:
a) Falsely representing that it is a document authorized,
issued, or approved by any court, official, or agency of
the United States or any state, or by any lawyer, law firm,
or insurance or brokerage company.
b) Creating a false impression as to its source,
authorization, or approval.
c) Charging or accepting any fee to enter, claim or win a
sweepstakes.
4)Requires the official rules for a sweepstakes to disclose
information about the date or dates the final winner or
winners will be determined.
5)Prohibits a sweepstakes sponsor from:
a) Charging a fee as a condition of entering a sweepstakes,
claiming or winning a prize, receiving a monetary
distribution, or obtaining information about a prize or
sweepstakes.
b) Selling the names or addresses of their customers and
participants related to sweepstakes without the prior
express consent of their customers or participants.
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FISCAL EFFECT
Potential costs to the Attorney General and non-reimbursable
costs to local prosecutors for enforcement. (The bill amends
provisions of current law, the violation of which are subject to
a civil penalty of $2,500 for each violation.)
COMMENTS
1)Purpose . According to the author's office, in 1998 California
was among the first states to pass sweepstakes laws in 1998 in
response to growing complaints about deceptive sweepstakes
mailers. Since that time, these laws have not been updated,
yet new deceptive sweepstakes solicitation practices have
surfaced that particularly prey on senior citizens. For
example, current law does not expressly forbid third parties
from selling information regarding sweepstakes opportunities,
nor are they bound by sweepstakes laws and disclosures.
2)In support , the Privacy Rights Clearinghouse writes, "Of
greatest interest to our organization is the provision of SB
1400 that would prohibit sweepstakes sponsors from sharing or
selling the names and information of their customers and
without the express consent of their customers or
participants. Currently, the personal information of high
activity customers is sold to other sweepstakes who then can
take advantage of such customers. This practice violates the
privacy of sweepstakes customers, many of whom are seniors or
economically disadvantaged individuals."
3)Opposition . The California Chamber of Commerce is opposed to
the provision prohibiting sharing or selling names and
information of customers.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081