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Public Act 92-0436
SB797 Enrolled LRB9200606LDpr
AN ACT concerning prizes and gifts.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the
Prizes and Gifts Act.
Section 5. Legislative intent. The General Assembly
finds that deceptive promotional advertising of prizes is a
matter vitally affecting the public interest in this State.
Section 10. Definitions. As used in this Act:
"Catalog seller" means an entity (and its subsidiaries)
or a person at least 50% of whose annual revenues are derived
from the sale of products sold in connection with the
distribution of catalogs of at least 24 pages, which contain
written descriptions or illustrations and sale prices for
each item of merchandise and which are distributed in more
than one state with a total annual distribution of at least
250,000.
"Person" means a corporation, partnership, limited
liability company, sole proprietorship, or natural person.
"Prize" means a gift, award, or other item or service of
value that is offered or awarded to a participant in a real
or purported contest, competition, sweepstakes, scheme, plan,
or other selection process that involves an element of
chance.
"Retail value" of a prize means:
(1) a price at which the sponsor can substantiate
that a substantial quantity of the item or service
offered as a prize has been sold to the public; or
(2) if the sponsor is unable to satisfy the
requirement in subdivision (1), no more than 3 times the
amount the sponsor paid for the prize in a bona fide
purchase from an unaffiliated seller.
"Sponsor" means a person on whose behalf a promotion is
conducted to promote or advertise goods, services, or
property of that person. "Sponsor" includes a person who
conducts a promotion on behalf of another sponsor.
Section 15. Application of Act. Except as otherwise
provided in this Act, this Act applies only to a written
promotional offer that is:
(1) made to a person in this State;
(2) used to induce or invite a person to come to
this State to claim a prize, attend a sales presentation,
meet a promoter, sponsor, salesperson, or agent, or
conduct any business in this State; or
(3) used to induce or invite a person to contact by
any means a promoter, sponsor, salesperson, or agent in
this State.
Section 20. No payment required.
(a) No sponsor may require a person in this State to pay
the sponsor money as a condition of awarding the person a
prize, or as a condition of allowing the person to receive,
use, compete for, or obtain information about a prize.
(b) A sponsor shall not represent that a person has won
or unconditionally will be the winner of a prize or represent
that he or she has won a prize, unless all of the following
conditions are met:
(1) the person is given the prize without
obligation;
(2) the person is notified at no expense to him or
her within 15 days of winning the prize; and
(3) the representation is not false, deceptive, or
misleading.
Section 25. Disclosures required. A written promotional
prize offer must contain each of the following in a clear and
conspicuous statement at the onset of the offer:
(1) the true name or names of the sponsor and the
address of the sponsor's actual principal place of
business;
(2) the retail value of each prize the person
receiving the notice has been selected to receive or may
be eligible to receive;
(3) a disclosure that no purchase is necessary to
enter such written promotional offer;
(4) a disclosure that a purchase will not improve
the person's chances of winning with an entry;
(5) a statement of the person's odds of receiving
each prize identified in the notice;
(6) any requirement that the person pay the actual
shipping or handling fees or any other charges to obtain
or use a prize, including the nature and amount of the
charges;
(7) if receipt of the prize is subject to a
restriction, a description of the restriction;
(8) any limitations on eligibility; and
(9) if a sponsor represents that the person is a
"finalist", has been "specially selected", is in "first
place", or is otherwise among a limited group of persons
with an enhanced likelihood of receiving a prize, the
written prize notice must contain a statement of the
maximum number of persons in the group or purported group
with this enhanced likelihood of receiving a prize.
Section 30. Prize award required. A sponsor who
represents that a person has been awarded a prize shall, not
later than 30 days after making the representation, provide
the person with:
(1) the prize;
(2) a voucher, certificate, or other document
giving the person the prize; or
(3) the retail value of the prize, as stated in the
written prize notice, in the form of cash, a money order,
or a certified check.
Section 32. Advertising media exempt. Nothing in this
Act creates liability for acts by the publisher, owner,
agent, or employee of a newspaper, periodical, radio station,
television station, cable television system, or other
advertising medium arising out of the publication or
dissemination of a solicitation, notice, or promotion
governed by this Section unless the publisher, owner agent,
or employee had knowledge that the solicitation, notice, or
promotion violated the requirements of this Section, or had a
financial interest in the solicitation, notice, or promotion.
Section 35. Exemptions. This Act does not apply to
solicitations or representations in connection with:
(1) the sale or purchase of books, recordings,
video cassettes, periodicals, and similar goods through
a membership group or club that is regulated by the
Federal Trade Commission under Code of Federal
Regulations, Title 16, part 425.1, concerning the use of
negative option plans by sellers in commerce;
(2) the sale or purchase of goods ordered through a
contractual plan or arrangement such as a continuity
plan, subscription arrangement, or a single sale or
purchase series arrangement under which the seller ships
goods to a consumer who has consented in advance to
receive the goods and after the receipt of the goods is
given the opportunity to examine the goods and to receive
a full refund of charges for the goods upon return of the
goods in an undamaged condition;
(3) sales by a catalog seller;
(4) the State lottery created and regulated under
the Illinois Lottery Law;
(5) the sale or purchase of membership camping
contracts in accordance with the Illinois Membership
Campground Act; or
(6) the sale or purchase of time-shares created and
regulated under the Illinois Real Estate Time-Share Act.
Section 40. Violations.
(a) Nothing in this Act may be construed to permit an
activity otherwise prohibited by law.
(b) Enforcement by consumer. A consumer who suffers
loss by reason of any intentional violation of any provision
of this Act may bring a civil action to enforce that
provision. A consumer who is successful in such an action
shall recover the greater of $500 or twice the amount of the
pecuniary loss, reasonable attorney's fees, and court costs
incurred by bringing such action.
(c) Enforcement by Attorney General or State's Attorney.
Violation of any of the provisions of this Act is an unlawful
practice under the Consumer Fraud and Deceptive Business
Practices Act. All remedies, penalties, and authority
granted to the Attorney General or State's Attorney by that
Act shall be available to him or her for the enforcement of
this Act.
Section 90. Severability. If any provision of this Act
or the application thereof to any person or circumstance is
held invalid, the invalidity shall not affect other
provisions or applications of the Act which can be given
effect without the invalid provision or application and to
this end the provisions of this Act are severable.
Passed in the General Assembly May 22, 2001.
Approved August 17, 2001.
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