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92_SB0797eng SB797 Engrossed LRB9200606LDpr 1 AN ACT concerning prizes and gifts. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 1. Short title. This Act may be cited as the 5 Prizes and Gifts Act. 6 Section 5. Legislative intent. The General Assembly 7 finds that deceptive promotional advertising of prizes is a 8 matter vitally affecting the public interest in this State. 9 Section 10. Definitions. As used in this Act: 10 "Catalog seller" means an entity (and its subsidiaries) 11 or a person at least 50% of whose annual revenues are derived 12 from the sale of products sold in connection with the 13 distribution of catalogs of at least 24 pages, which contain 14 written descriptions or illustrations and sale prices for 15 each item of merchandise and which are distributed in more 16 than one state with a total annual distribution of at least 17 250,000. 18 "Person" means a corporation, partnership, limited 19 liability company, sole proprietorship, or natural person. 20 "Prize" means a gift, award, or other item or service of 21 value that is offered or awarded to a participant in a real 22 or purported contest, competition, sweepstakes, scheme, plan, 23 or other selection process. 24 "Retail value" of a prize means: 25 (1) a price at which the sponsor can substantiate 26 that a substantial quantity of the item or service 27 offered as a prize has been sold to the public; or 28 (2) if the sponsor is unable to satisfy the 29 requirement in subdivision (1), no more than 3 times the 30 amount the sponsor paid for the prize in a bona fide SB797 Engrossed -2- LRB9200606LDpr 1 purchase from an unaffiliated seller. 2 "Sponsor" means a person that requires payment of money 3 as a condition of awarding another person a prize, or as a 4 condition of allowing another person to receive, use, compete 5 for, or obtain information about a prize, or that creates the 6 reasonable impression that such a payment is required. 7 Section 15. Application of Act. Except as otherwise 8 provided in this Act, this Act applies only to a written 9 promotional offer that is: 10 (1) made to a person in this State; 11 (2) used to induce or invite a person to come to 12 this State to claim a prize, attend a sales presentation, 13 meet a promoter, sponsor, salesperson, or agent, or 14 conduct any business in this State; or 15 (3) used to induce or invite a person to contact by 16 any means a promoter, sponsor, salesperson, or agent in 17 this State. 18 Section 20. No payment required. No sponsor may require 19 a person in this State to pay the sponsor money as a 20 condition of awarding the person a prize, or as a condition 21 of allowing the person to receive, use, compete for, or 22 obtain information about a prize. 23 Section 25. Disclosures required. A written promotional 24 offer must contain each of the following in a prominent 25 statement at the onset of the offer: 26 (1) the true name or names of the sponsor and the 27 address of the sponsor's actual principal place of 28 business; 29 (2) the retail value of each prize the person 30 receiving the notice has been selected to receive or may 31 be eligible to receive; SB797 Engrossed -3- LRB9200606LDpr 1 (3) a disclosure that no purchase is necessary to 2 enter such written promotional offer; 3 (4) a disclosure that a purchase will not improve 4 the person's chances of winning with an entry; 5 (5) a statement of the person's odds of receiving 6 each prize identified in the notice; 7 (6) any requirement that the person pay shipping or 8 handling fees or any other charges to obtain or use a 9 prize, including the nature and amount of the charges; 10 (7) if receipt of the prize is subject to a 11 restriction, a description of the restriction; 12 (8) any limitations on eligibility; and 13 (9) if a sponsor represents that the person is a 14 "winner", is a "finalist", has been "specially selected", 15 is in "first place", or is otherwise among a limited 16 group of persons with an enhanced likelihood of receiving 17 a prize, the written prize notice must contain a 18 statement of the maximum number of persons in the group 19 or purported group with this enhanced likelihood of 20 receiving a prize. 21 Section 30. Prize award required. A sponsor who 22 represents that a person has been awarded a prize shall, not 23 later than 30 days after making the representation, provide 24 the person with: 25 (1) the prize; 26 (2) a voucher, certificate, or other document 27 giving the person the prize; or 28 (3) the retail value of the prize, as stated in the 29 written prize notice, in the form of cash, a money order, 30 or a certified check. 31 Section 32. Advertising media exempt. Nothing in this 32 Act creates liability for acts by the publisher, owner, SB797 Engrossed -4- LRB9200606LDpr 1 agent, or employee of a newspaper, periodical, radio station, 2 television station, cable television system, or other 3 advertising medium arising out of the publication or 4 dissemination of a solicitation, notice, or promotion 5 governed by this Section unless the publisher, owner agent, 6 or employee had knowledge that the solicitation, notice, or 7 promotion violated the requirements of this Section, or had a 8 financial interest in the solicitation, notice, or promotion. 9 Section 35. Exemptions. This Act does not apply to 10 solicitations or representations in connection with: 11 (1) the sale or purchase of books, recordings, 12 video cassettes, periodicals, and similar goods through 13 a membership group or club that is regulated by the 14 Federal Trade Commission under Code of Federal 15 Regulations, Title 16, part 425.1, concerning the use of 16 negative option plans by sellers in commerce; 17 (2) the sale or purchase of goods ordered through a 18 contractual plan or arrangement such as a continuity 19 plan, subscription arrangement, or a single sale or 20 purchase series arrangement under which the seller ships 21 goods to a consumer who has consented in advance to 22 receive the goods and after the receipt of the goods is 23 given the opportunity to examine the goods and to receive 24 a full refund of charges for the goods upon return of the 25 goods in an undamaged condition; 26 (3) sales by a catalog seller; 27 (4) the State lottery created and regulated under 28 the Illinois Lottery Law; 29 (5) the sale or purchase of membership camping 30 contracts in accordance with the Illinois Membership 31 Campground Act; or 32 (6) the sale or purchase of time-shares created and 33 regulated under the Illinois Real Estate Time-Share Act. SB797 Engrossed -5- LRB9200606LDpr 1 Section 40. Violations. 2 (a) Nothing in this Act may be construed to permit an 3 activity otherwise prohibited by law. 4 (b) A consumer who suffers loss by reason of any 5 intentional violation of any provision of this Act may bring 6 a civil action to enforce that provision. A consumer who is 7 successful in such an action shall recover the greater of 8 $500 or twice the amount of the pecuniary loss, reasonable 9 attorney's fees, and court costs incurred by bringing such 10 action. 11 (c) If the Attorney General or State's Attorney has 12 reason to believe that any person is using, has used, or is 13 about to use any method, act, or practice that violates this 14 Act, and that proceedings would be in the public interest, he 15 or she may bring an action in the name of the People of the 16 State of Illinois against the person to restrain by 17 preliminary or permanent injunction the use of the method, 18 act, or practice. The court, in its discretion, may exercise 19 all powers necessary, including but not limited to: 20 injunction; revocation, forfeiture, or suspension of license 21 or other authority of any person to do business in this 22 State; appointment of a receiver; dissolution of a domestic 23 corporation or association; suspension or termination of the 24 right of a foreign corporation or association to do business 25 in this State; and restitution. In addition to other 26 remedies, the Attorney General or State's Attorney may 27 request and the court may impose a civil penalty in a sum not 28 to exceed $50,000 against any person found by the court to 29 have engaged in any method, act, or practice that violates 30 this Act. If the court finds the method, act, or practice to 31 have been entered into with the intent to defraud, the court 32 may impose a civil penalty in a sum not to exceed $50,000 per 33 violation. SB797 Engrossed -6- LRB9200606LDpr 1 Section 90. Severability. If any provision of this Act 2 or the application thereof to any person or circumstance is 3 held invalid, the invalidity shall not affect other 4 provisions or applications of the Act which can be given 5 effect without the invalid provision or application and to 6 this end the provisions of this Act are severable.