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Spring 2004-01 New contest regulation

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Number 55
Spring 2004

New contest regulation

A new regulation on promotional contests was promulgated on January 21, 2004.

Approved by the Department of Consumer Affairs ("DACO"), Regulation Number 6754 became effective February 30, 2004, superseding Regulation 6101.

Increased scope

Regulation 6754, as prior Regulation 6101, regulates contests carried out for commercial purposes.

A "contest" is an activity through which an offer to two or more persons is made through the media (including television, radio, movie theaters, postal service, newspapers, magazines, loose leafs, signs, etc., electronically or digitally), promoting the expectation that one or more of them, but not all of them, will receive one or more prizes, with the element of chance as a determinative factor is selecting the winner.

Regulation 6754 is applicable to all contests, the value of the prize being irrelevant, except that it excludes from its coverage non-profit organizations or associations and political parties.

Modification and cancellation

The most important change in the new contest regulation is that it specifically regulates the manner in which contest rules can be modified, changed or cancelled. Any modification to the rules, conditions and prizes resulting from causes beyond the promoter's control must now first be sent in writing to DACO, personally or by certified mail, return receipt requested. If the agency does not respond to the notice within ten business days from its date of receipt, the modification is deemed approved, at which time the promoter can publicly notify the same. Failure of the promoter to notify DACO first, or filing with DACO a modification request which is deemed frivolous, empowers the agency to fine the promoter.

Regulation 6754 states that a promoter cannot cancel or suspend a contest unless it first obtains express written authorization from DACO. If the agency does not approve the cancellation or suspension, the contest must proceed and the public notified of such fact. Some of the reasons that Regulation 6754 indicates may be just cause for cancellation of the contest are the following:

If the promoter or its representative has been convicted in any jurisdiction of the following: forgery, fraud, false representation, theft, extortion, abuse of confidence, blackmailing, and other crimes that involve moral depravation.

Incur in any of the illegal practices detailed in Rule 11 of Regulation 6754, including not delivering the prize or delivering it within a reasonable term; delivering a prize of inferior quality or different to that offered; retaining any offered prize; reserving the prizes not awarded; not including in the rules the method for selecting alternate winners; and others.

Violate DACO Regulation 6386 relating to false advertisements.

Have three or more complaints adjudicated against it by DACO.

Supply false, incorrect or incomplete information.

Not requesting the approval of the Secretary for amending, modifying or changing the rules, conditions and prizes of the contest, or for canceling or suspending the contest.

Failure by the promoter to pay any fines, costs or indemnifications as may be due to DACO or a contestant.

Other important changes

The regulation now permits that contestants be informed of the e-mail address where they can obtain further information on the contest. It clearly requires that all publications relative to the contest be in the Spanish language (although they can additionally be divulged in English), except when the contest is originated outside of Puerto Rico and a local promoter is not involved, in which case the rules can be available only in English. Any publication of the contest that covers two-thirds or more of a newspaper or magazine ad must contain the complete rules of the contest.

The rules must now contain, in addition to that previously required under Regulation 6101, the following:

Information on whether any tax or import duty is payable upon delivery of the prize or after.

Any visual representation of the prize must correspond to the real characteristics of the prize.

The rules must provide how alternate winners will be selected.

If the contest extends for more than 30 days, a notice must be given as to the then available prizes.

Notice that the contestants will agree that the promoter can use their names and other personal information in publications by entering the contest, if applicable.

>> Note:

Regulation 6754 is to be viewed in conjunction with Regulation 6386 of January 10, 2002, which prohibits deceptive advertisement.


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