Everyone wants to attract new customers. And a really fun way to do that is to hold a raffle.
While a sweepstakes is a great way to get people to recognize your brand – and can generate new leads for you – it’s important to keep in mind that a consumer’s participation in your sweepstakes sort can NOT constitute the creation of a commercial relationship with you for the purpose of returning telephone calls.
It was the outfit Trim v. Mayvenn, Inc., Case No. 20-cv-03917-MMC, 2022 US Dist. LEXIS 63222 (ND Cal. April 5, 2022).
There, the plaintiff entered a contest for a chance to win free goods and services. The defendant argued that because the plaintiff had entered the contest, she had become a customer and an established business relationship allowed her to call the plaintiff even though her number was on the DNC national list.
Not so found the yard.
Relying on a letter from the FTC to Congress interpreting a different law (the TSR), the court found that contest entries did not create an EBR:
The 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 CFR § 310.2(q), in particular, the FTC’s statement in a report to Congress that the submission of a “contest entry form does not create a [EBR] for purposes of TSR”, see 2016 2017 FTC Biennial Rep. to Congress 7 (hereafter, “FTC Biennal Rep.”) (noting that companies cannot “bypass the [NDNC] Register using the contest entry forms as a means of exploiting the [EBR] exemption”).
Notably, the FTC’s report to Congress is not formal guidance and is not the kind of thing that many courts would also give deference to. And while the Garnish court is correct that the FCC’s rulings under the TCPA and the FTC’s rulings under the TSR should be harmonized to the extent possible, neither commission has directly addressed this issue in any form or a formal declaratory procedure.
So, in my opinion, the jury is still out on whether contest entries are eligible for EBR. But here is a data point that says NOPE.
Have a good TCPAWorld weekend!