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James S. Gilmore III
Attorney General
900 East Main Street
Richmond, Virginia 23219

September 19, 1996
5:66, 1:18/54-062


Chapter 31.

Prizes and Gifts Act. Code of Virginia

59.1-415 - Definitions As used in this chapter, which shall be known and may be cited as the “Prizes and Gifts Act”:
“Anything of value,” “item of value” or “item” means any item or service with monetary value.
“Handling Charges” means any charge, fee or sum of money which is paid by a consumer to receive a price, gift, or any item of value including, but limited to, promotional fees, redemption fees, registration fees or delivery costs. “Pay-per-call” service means any passive, interactive, polling conference, or other similar audiotext service that is accessed through a 900 number exchange or otherwise, and generates a service-related fee billed to a telephone customer. “Person” means any natural person, corporation, trust, partnership, association and any other legal entity. (1989, c. 689; 1991, c. 154)

The numbers of 59.1-415 through 59.1-423 were assigned by the Virginia Code Commission, the numbers in the 1989 act having been 59.1-406 through 59.1-414.

59.1-416. Representative of having won a prize, gift or any item of value.
A. No person shall, in connection with the sale or lease or solicitation for the sale or lease of goods, property, or service, represent that another for the sale or lease of goods, property, or service, represent that another person has won anything of value or is the winner of a contest, unless all of the following conditions are met:
1. The recipient of the prize, gift or item of value shall be given the prize, gift or item of value without obligation: and
2. The prize, gift or item of value shall be delivered to the recipient at no expense to him, within ten days of the representation.
B. The use of language that may lead a reasonable person to believe he has won a contest or anything of value, including, but not limited to, “Congratulations,” or “You have won,” or “You are the winner of,” shall be considered a representation of the types governed by this section. (1989, c. 689).

59.1-417. Repression of eligibility to win or to receive a prize, gift or item of value.
A. No person shall, in connection with the sale of lease of solicitation for sale or lease of goods, property or service, represent that another has a chance to win or to receive a prize, gift or item of value without clearly and conspicuously disclosing on whose behalf the contest or promotion is conducted, as well as all material conditions which a participant must satisfy. In an oral solicitation all material conditions shall be disclosed prior to requesting the consumer to enter into the sale or lease. Additionally, in any written material covered by this section, each of the following shall be clearly and prominently disclosed (i) immediately adjacent to the first identification of the prize, gift or item of value to which it relates or (ii) in a separate section entitled “ Consumer Disclosure” which title shall be printed in no less than 10-point bold face type and which section shall contain only a description of the prize, gift or item of value and the disclosures outlined in subdivisions 1, 2, and 3 of this subsection:
1. The actual retail value of each item or prize, which for purposes of this section shall be (i) the price at which substantial sales of the item were made in the area in which the offer was received within the last ninety days or (ii) the cost of the item of value, gift or prize to the person on whose behalf the contest or promotion is conducted plus no more than 700 percent, but in no case shall it exceed such person’s good faith estimate of the appraised retail value; 2. The actual number of each item, gift, or prize to be awarded; and
3. The odds of receiving each item, gift or prize.
B. All disclosures required by this chapter to be in writing shall comply with the following:
1. All dollar values shall be stated in Arabic numerals and be preceded by a dollar sign ($).
2. The number of each item, gift or prize to be awarded and the odds of receiving each item, gift or prize shall be stated in Arabic numerals and shall be written in a manner that is clear and understandable.
C. It shall be unlawful to notify a person that he will receive a gift, prize, or item of value that has a condition of receiving the gift, prize or item of value the requirements that he pay any money, or purchase, lease or rent any goods or services, unless there shall have been clearly and conspicuously the private nature of the charges to be incurred, including, but not limited to, any shipping charge and handling charges. Such disclosure shall be given (i) on the face of any written materials or (ii) prior to requesting or inviting the person to enter into the sale or lease in any oral notification.
D. The provisions of this section shall not apply where to be eligible:
1. Participants are asked only to complete and mail, or deposit at a local retail commercial establishment, an entry blank obtained locally or by mail, or to call in their entry by telephone; or
2. Participants are never required to listen to a sales presentation and never requested or required to pay any sum of money for any merchandise, service or item of value.
E. Nothing in this section shall create any 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 of dissemination of any advertisement or promotion governed by this section, when the publisher, owner, agent or employee did not know that the advertisement or promotion violated the requirements of this section.
F. Every solicitation that seeks to induce its recipients to call a pay-per-call service telephone number to receive any information about a prize, gift, or item of value shall (i) conform to the provisions of this section, and (ii) shall disclose the total cost of the pay-per-call service immediately adjacent to the pay-per-call service telephone number. In written materials, this disclosure shall be in ten-point bold-faced type. All solicitations delivered through the electronic media shall contain the disclosures in such size, duration, or volume so as to be clearly readable or audible to the recipient. (1989, c. 689; 1991, c. 154.)
The 1991 amendment added subsection F.

59.1-418 Representations of being specially selected.
A. No person shall represent that another person that has been specially selected in connection with the sale or lease or solicitation for sale or lese of goods, property, or services, unless the selection process is designed to reach a particular type or types of persons.
B. The use of any language that may lead a reasonable person to believe the has been selected, including but not limited to “carefully selected,” or “You have been selected to receive,” or “You have been chosen,” shall be considered a representation of the type governed b this section. (1989, c. 689.)

59.1-419. Simulation of checks and invoices.—In connection with a consumer transaction, no person shall issue any writing which simulates or resembles (i) a check unless the writing clearly and conspicuously discloses its true value and purpose, and the writing would not mislead a reasonable person or (ii) an invoice unless the intended recipient of the invoice has actually contracted for goods, property, or services for which the issuer seeks proper payment (1989, c. 689.)

59.1-420 Conditions of handling charges and shipping charges.

A. It shall be unlawful to notify a person that he will receive a gift, prize or item of value an that as a condition of receiving the gift, prize or item of value and that as a condition of receiving the gift, prize or item of value he will be required to pay any money, or purchase or lease (including rent) any goods or services, if any one or more of the following conditions exist:
1. The shipping charges exceeds:
a. The cost of postage of the charge of a delivery service in the business of delivering goods of like size, weight, and kind for shipping the gift, prize or item of value from the geographic area in which the gift, prize or item of value is being distributed; or
b. The exact amount for shipping paid to an independent fulfillment house or an independent supplier, either of which is the business of shipping goods for shippers other than the offeror of the gift, prize or item of value; or
2. The handling charge exceeds the lesser of five dollars or the actual cost of handling.
B. This section shall apply to all offers of prizes, gifts or items of value covered by this chapter. (1989, c. 689.)

59.1-421 Action to enforce the provisions of chapter.—Any consumer who suffers loss by reason of a violation of any provisions of this chapter may bring a civil action to enforce such provisions. Any consumer who is successful in such an action shall recover reasonable attorney’s fees, and court costs incurred by bringing such actions. (1989, c. 689.)

59.1-422 Enforcement; penalties.—Any violation of this chapter shall constitute a prohibited practice under the provision of 59.1-200 and shall be subjected to any of the enforcement provisions of Chapter 17 (59.1-196 et seq.) of this title. (1989, c. 689.)

59.1-423 Exemptions. – The provisions of 59.1-417 through 59.1-420 shall not apply to the sale or purchase, or solicitation of representation in connection therewith, of goods from a catalog or of books, recordings, videocassettes, periodicals and similar goods through a membership group or club which is regulated by the Federal Trade Commission trade regulation rule concerning use of negative option plans by sellers in commerce or 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 such goods and the recipient of such goods in given the opportunity, after examination of the goods, to receive a full refund of charges for the goods, or unused portion thereof, upon return of the goods, or unused portion thereof, undamaged. (1989, c. 689.)


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