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#2225078 - 11/04/19 08:25 PM Contest
KeepSmiling Offline
Member
Joined: Jun 2008
Posts: 85
We would like to increase the usage of e-statements. In order to entice our customers to sign up, we'd like to run a contest where the customer submits a short essay on, for example, why they love our bank. The best essay, as chosen by our marketing team, would win a trip.
The winner isn’t chosen at random, so I don't this this would be a lottery or sweepstakes, correct? Instead, it would be considered a contest. Is this legal as long as we provide the appropriate disclosures?

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#2225082 - 11/04/19 08:49 PM Re: Contest KeepSmiling
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
Well, I don't think this would be permitted as you describe it. To explain, let's look at the definition of a lottery (this is from FDIC rules):

(2) The term "lottery" includes any arrangement, other than a savings promotion raffle, whereby three or more persons (the "participants") advance money or credit to another in exchange for the possibility or expectation that one or more but not all of the participants (the "winners") will receive by reason of their advances more than the amounts they have advanced, the identity of the winners being determined by any means which includes--

(A) a random selection;

(B) a game, race, or contest; or

(C) any record or tabulation of the result of one or more events in which any participant has no interest except for its bearing upon the possibility that he may become a winner.


In reviewing your proposal, I see two things. First, the essay is about why customers love your bank. This implies that only customers can submit the essay (though I could be wrong), and when you have a customer, they have advanced money (opened a deposit account) or advanced credit (taken out a loan). Secondly, a contest to determine the winner is included in the definition of a lottery. Therefore, it appears your proposed "contest" meets the definition of a lottery (under the quoted FDIC rules) and, therefore, is not permitted.
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
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#2225118 - 11/05/19 04:53 PM Re: Contest KeepSmiling
P*Q Offline

Power Poster
P*Q
Joined: May 2001
Posts: 8,458
Somewhere
Plus, what does your contest and why they love your bank have to do with signing up for e-statements? Is it only customers who do who can enter your contest? Lastly, I agree with Adam's response as stated above.

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#2225325 - 11/08/19 02:24 PM Re: Contest Adam Witmer
KeepSmiling Offline
Member
Joined: Jun 2008
Posts: 85
What if we offer a prize for enrolling in e-statements OR if they don't want to enroll, they can submit a post card. We would get specific with the requirements, but no purchase would be necessary and it would be open to anyone, not just customers. Would that work?

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#2225328 - 11/08/19 02:32 PM Re: Contest KeepSmiling
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,225
Galveston, TX
How would non-customers know about the contest?
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2225333 - 11/08/19 02:48 PM Re: Contest KeepSmiling
KeepSmiling Offline
Member
Joined: Jun 2008
Posts: 85
If we post it on our website and Facebook, is that enough?

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#2225339 - 11/08/19 03:17 PM Re: Contest KeepSmiling
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,225
Galveston, TX
Really a business decision. Sort of defeats the purpose of the contest. If I don't want e-statements - what becomes the incentive to actually sign up?.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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