We wanted to share the following best practice tip with our readers who conduct sweepstakes, contests, and other prize-based promotions: When conducting such promotions, we always recommend that our clients have the potential winners execute and return a set of verification documents before confirming them as winners. Generally, this involves having the winner sign an affidavit and release form confirming their eligibility, compliance with the official rules of the promotion, and releasing the sponsor (and their agencies and parents, subsidiaries, and affiliates) from any liability that may arise in connection with the promotion. In addition, if you need to conduct a background check on the potential winners before issuing a prize to them, you should have them complete a form authorizing you (and/or your agencies) to do so prior to obtaining any consumer reports from a consumer reporting agency. Under the federal Fair Credit Reporting Act (FCRA), consumer reporting agencies may only issue consumer reports with a consumer’s consent, or for one of the other delineated permissible purposes. Obtaining a properly executed authorization will not only allow you to conduct your background check more seamlessly, but it will also help to reduce the risk in playing part to a potential FCRA violation, which can result in high statutory penalties.