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.
Continue Reading Two FCC Fines for Contests Where Prizes Not Awarded on a Timely Basis – What Broadcasters Should Watch Out for in Conducting Contests