A long running class action lawsuit over the legality of allowing consumers to enter sweepstakes offered by popular television shows such as Deal or No Deal, The Apprentice, American Idol, and America’s Got Talent has finally concluded. A summary of the lawsuit as filed can be found by clicking Texting to Win: Allowing Consumers to Enter Sweepstakes Via Text Messages Earns Companies a Day in Court.
Under the terms of the settlement, the parties agreed to: (i) refund any premium text messages paid by consumers if the consumers did not win a prize; and (ii) reimburse the plaintiff’s for their legal fees. Most importantly, the defendants agreed to a five year injunction under which they would agree to not: “creat[e], sponsor or operat[e] any contest or sweepstakes, for which entrants are offered the possibility of winning a prize, where people who enter via premium text message do not receive something of comparable value to the premium text message charge in addition to entry.”
Companies that are considering using text messages as a means to enter sweepstakes are advised to seek counsel prior to conducting such promotions.