Everyone wants to attract new customers. And one really fun way to do so is with a sweepstakes.
While a sweepstakes is a nice way to get folks to recognize your brand–and may generate new leads for you–it is important to keep in mind that a consumer’s entry in your sweepstakes may NOT constitute the creation of a business relationship with you for purposes of return phone calls.
That was the holding in Trim v. Mayvenn, Inc., Case No. 20-cv-03917-MMC, 2022 U.S. Dist. LEXIS 63222 (N.D. Cal. April 5, 2022).
There the Plaintiff had entered a sweepstakes for a chance to win free products and services. The Defendant argued that because the plaintiff had entered the sweepstakes she had become a customer and an established business relationship permitted it to call the plaintiff even though her number was on the national DNC list.
Not so found the court.
Relying on a letter from the FTC to Congress interpreting a different statute (the TSR) the court found sweepstakes entries do not create an EBR:
Federal Trade Commission’s (“FTC”) interpretation of an identical EBR exemption contained in the Telemarketing Sales Rule (“TSR”) (see Opp. at 8:3-16); see also 16 C.F.R. § 310.2(q), specifically, the FTC’s statement in a report to Congress that the submission of a “sweepstakes entry form does not create an [EBR] for purposes of the TSR,” see 2016 2017 FTC Biennial Rep. to Congress 7 (hereinafter, “FTC Biennial Rep.”) (noting businesses may not “circumvent the [NDNC] Registry by utilizing sweepstakes entry forms as a way to exploit the [EBR] exemption”).
Notably the FTC’s report to Congress is not formal guidance and is not the sort of thing that many courts would afford deference too. And while the Trim court is correct that FCC rulings under the TCPA and FTC rulings under the TSR ought to be harmonized where possible, neither Commission has directly addressed this issue in any form of a formal declaratory proceeding.
So, in my opinion, the jury is still out on whether sweepstakes entries qualify as EBR. But here is a data point that says NOPE.
Happy weekend TCPAWorld!