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Sign Up for Free Bill Pay/Get Entered in a Drawing

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Question: 
We are thinking about doing a promotion on our Free Bill Pay. We had thought about doing a give away to our customers and the way to enter would be to use the bill pay. For each bill that is paid, their name would be entered into the drawing. Is this a violation of any laws or regulations? Internet Banking and Bill Pay are free products offered to all customers.
Answer: 

This would typically violate the lottery laws. The person is a customer and pays you a fee of some type. This could include their depositing dollars with you. So they pay an entry fee since non-customers may not enter. Not everyone wins or wins something of greater value than they had to pay, to play. That makes it a lottery and banks are very restricted on what they may do with lotteries. Acceptance of a merchants deposits tied to the lottery is about it.

While your state laws may be more restrictive, you won't be able to do this under federal laws. If you allow anyone to enter the drawing, you would remove the lottery stigma. Your state laws should tell you what specifics are needed to allow others to enter, i.e. can you make them visit a branch to enter, must you allow postcard registrations, etc.

First published on BankersOnline.com 1/9/06

First published on 01/09/2006

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