1. a. A sponsor of a prize shall not require a person to purchase merchandise or pay or donate money as a condition of awarding a prize or as a condition of allowing the person to receive, use, compete for, or obtain information about a prize, unless the person has first received a written prize notice which satisfies the requirements of subsections 2 and 3. A sponsor shall not create the reasonable impression that such a purchase, payment, or donation is required, unless the person has first received a written prize notice which satisfies the requirements of subsections 2 and 3.

 b. For purposes of this chapter, a sponsor is deemed to have created the reasonable impression that a payment, purchase, or donation is required 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, if the sponsor does any of the following:

 (1) Fails to clearly and conspicuously disclose that a purchase, payment, or donation is not required in immediate proximity to, and in the same type and boldness as, each written reference to a purchase, payment, or donation, or in immediate proximity to, and in the same audio volume as, each verbal reference to a purchase, payment, or donation.
 (2) Uses a verbal or written solicitation, or other advertisement which contains any express or implied representations that a participant’s likelihood of receiving a prize or other favorable treatment is enhanced by making a purchase, payment, or donation.
 (3) Uses a verbal or written solicitation, course of solicitation, or other advertisement which when considered in its totality creates an overall impression that a participant’s likelihood of receiving a prize or other favorable treatment is enhanced by making a purchase, payment, or donation.
 c. A written prize notice satisfying the requirements of subsections 2 and 3 must precede every verbal advertisement by a sponsor which requires a person to purchase merchandise or pay or donate money, or gives the reasonable impression that such a purchase, payment, or donation is required, as a condition of awarding a prize, or as a condition of allowing a person to receive, use, compete for, or obtain information about a prize.
 d. Each written advertisement by a sponsor which requires a person to purchase merchandise or pay or donate money, or gives the reasonable impression that such a purchase, payment, or donation is required as a condition of awarding a prize or as a condition of allowing a person to receive, use, compete for, or obtain information about a prize, must satisfy the requirements of subsections 2 and 3.

Terms Used In Iowa Code 714B.2

  • Advertisement: means as defined in section 714. See Iowa Code 714B.1
  • following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
  • Merchandise: means as defined in section 714. See Iowa Code 714B.1
  • Person: means as defined in section 714. See Iowa Code 714B.1
  • Prize: means a gift, award, cash award, or other merchandise of value that is offered or awarded to a person in a real or purported contest, competition, sweepstakes, puzzle, drawing, scheme, plan, or other selection process. See Iowa Code 714B.1
  • Sponsor: means a person who awards another person a prize or who allows the person to receive, use, compete for, or obtain information about a prize. See Iowa Code 714B.1
 2. A written prize notice must contain each of the following:

 a. The true name or names of the sponsor and the street address of the sponsor’s actual principal place of business.
 b. The retail value of each prize the person receiving the notice has been selected to receive or may be eligible to receive.
 c. A statement of the odds the person has of receiving each prize identified in the notice.
 d. Any requirement that the person pay shipping or handling fees, or any other charges to obtain or use a prize, including the nature and amount of the charge.
 e. A statement that a restriction applies and a description of the restriction, if receipt of the prize is subject to a restriction.
 f. Any limitations on eligibility to receive a prize.
 g. If a sponsor represents that a person is a winner or 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; or that a person is entering a contest, sweepstakes, drawing, or other competitive enterprise from which a single winner or select group of winners will receive a prize, and if the notice is not prohibited under section 714B.3, subsection 1, paragraph “c”, a statement of the maximum number of persons in the group or purported group with this enhanced likelihood of receiving a prize.
 h. Any requirement or invitation for the person to view, hear, or attend a sales presentation in order to claim a prize, a good faith estimate of the length of the sales presentation, a description of the merchandise that is the subject of the sales presentation, and the total cost of such merchandise.
 3. The information required in the written prize notice pursuant to subsection 2 must be provided as follows:

 a. The retail value and the statement of odds required under subsection 2 must be stated in immediate proximity to each identification of a prize on the written notice, and must be in the same size and boldness of type as the reference to the prize.
 b. The retail value must be stated in Arabic numerals, and must be in the following form:

Retail value: $……………..
 c. The statement of odds must include, for each prize, the total number of prizes to be given away and the total number of written prize notices to be distributed. The number of prizes and written prize notices must be stated in Arabic numerals. The statement of odds must be in the following form:

………… (number of prizes) out of ………… (notices distributed).
 d. If a person is required to pay shipping or handling fees or any other charges to obtain a prize, to be eligible to obtain a prize, or to participate in a contest, a statement must appear in immediate proximity to each listing of the prize in the written prize notice in not less than ten point boldface type as follows:

 YOU MUST PAY $……………. IN ORDER TO RECEIVE OR USE THIS ITEM, or, YOU MUST PAY $……………. IN ORDER TO COMPETE FOR THIS ITEM, as applicable.
 e. The information required under subsection 2, paragraphs “e”, “f”, and “h” must be on the first page of the written prize notice in not less than ten point boldface type.
 f. A statement required under subsection 2, paragraph “g”, must appear in immediate proximity to each representation that the person is among a group of persons with an enhanced likelihood of receiving a prize, and must be in the same type size and boldness as the representation.
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