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Ads, Credit Cards, and Illegal Lotteries

Answered by: 
John Burnett

Question: 
We do not own our credit card portfolio and use a third party vendor for approval, denials, etc. They run promotions to win trips and merchandise for customers who apply and are approved for a credit card. If we advertise "When you open an approved credit card, you are entered for a chance to win a trip to whereever", are we advertsing an illegal lottery? You are only entered if you are approved; not if you just apply. As we do not own the credit cards, can we advertise this?
Answer: 

If the promotion qualifies as a lottery, you cannot legally promote it or have anything else to do with it. However, if there are alternative ways for non-applicants or non-approved applicants to enter the drawing without opening a credit card account, there is a good chance that you're dealing with a sweepstakes instead of a lottery. In that case, your state law will tell you whether you're OK to promote it.

First published on BankersOnline.com 9/29/08

First published on 09/29/2008

Filed under: 
Operations
Filed under operations as: 
Credit Cards
IT
Sweepstakes

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