The FCC’s Enforcement Bureau this week issued two fines, one for $6000 and another for $5200 for violations of its contest rules, as the contests were not conducted as advertised. In each of these cases, a prize winner was not awarded a prize in a timely manner. In both cases, the prizes were not provided to winners even after the winners inquired, and, for one reason or another, the stations did not immediately respond to the prize winner to resolve the issue – instead providing substitute prizes only when FCC complaints were filed. Even though both prize winners appeared satisfied by the substitute prizes and withdrew their complaints, the FCC nevertheless issued the fines finding that the contests had not been conducted as promised, in that the original prizes were not awarded on a timely basis. While in both cases the delays appeared to simply be the result of station staff not making a priority of determining how to deal with delivering the prizes, these cases serve as a warning to broadcasters to review their contest rules and make sure that station staff understand that, if an unexpected glitch arises, they should not dawdle in working to resolve those issues.
As we have written before, the FCC requires that broadcasters adopt written rules for contests disclosing all material terms of those contests (see our posts here here and here that talk about some of the material rules that need to be covered) and make those rules available to the public. While the rules can now be posted online instead of having to be read on the air, the station must still alert listeners through on-air announcements as to where those rules are available (see our articles here and here). In writing their contest rules, the station should anticipate all the glitches that might occur in the contest process and spell out what will happen if one of these problems crops up. Obviously, a prize becoming unavailable is a frequent issue. Technical glitches also can become issues (e.g., phone lines not working or text message programs misidentifying the proper winner). These should be anticipated, with explanations of what will happen should any of these occur. What will happen may differ if the glitch occurs before the contest has been conducted (where you need to decide how to treat those who already entered) or after the prize has been awarded (e.g., as in this week’s cases, where substitute prizes were given). Anticipate the unexpected.
We have written before about a litany of other contest mishaps that can occur (see our posts here, here, here and here about some of those problems). Stations have had instances where joking statements by a weekend announcer were such that listeners thought that a real contest was being conducted – with complaints following when the listeners found out that no contest was really intended. In another case, a station designed an elaborate contest to reveal a few clues each day to a puzzle, anticipating that it would take weeks before the listeners would be able to solve the mystery. When the correct response came almost immediately after the contest began, station staff ignored it – not realizing that someone had guessed the answer so quickly. You simply never know how a contest will play out, and stations need to have rules that anticipate all eventualities – and train their staffs to be ready to deal with the issues that may arise.
Review the rules of other stations and other companies to see what other issues they are anticipating. Disclose what the audience might find important including who they are competing against, how they enter and how they win – and any issues, technical or otherwise, that can affect the odds of winning. And have your attorney review the rules to make sure that the issues and problems and your proposed remedies are clearly spelled out. Finally, train your staff to be ready to deal with any eventuality that may arise and don’t let problems fester into FCC fines.
Courtesy Broadcast Law Blog
