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Comment by Animats | Hacker News Reader

Since this is a California on-site thing, California sweepstakes law applies.[1]

- "The exact nature and approximate value of the prizes must be disclosed clearly and conspicuously when they are offered."

- "The law prohibits the company from misrepresenting the odds of receiving any item offered."

- Prohibited: "Failing to award and distribute all prizes of the value and type represented."

Online complaint form here.[2]

[1] http://consumerwiki.dca.ca.gov/wiki/index.php/CONTESTS/SWEEP... [2] https://oag.ca.gov/contact/consumer-complaint-against-busine...

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The car is surrounded by posters that read "Enter to win" above a picture of a white vehicle otherwise similar to the blue car physically present.

There is absolutely no doubt that ideogram promises a chance to win the car in exchange for the registration.

I seem to remember there was a similar case prosecuted at some point where the advertiser claimed that the car was only for illustrative purposes and even drew an analogy with having a model display some goods, saying you wouldn't expect to be buying the model along with the goods.

I might have just dreamt all that up though because I can't find anything online.

there was a case of a hooters employee, she expected to win a toyota but manager supposedly said “toy yoda”

She ended up getting a car: http://usatoday30.usatoday.com/news/nation/2002/05/09/toy-yo...

Apparently true: https://www.snopes.com/fact-check/hummer-bummer/

Interestingly, the family that started Toyota is named "Toyoda" (with a d, or rather a だ).

https://en.wikipedia.org/wiki/Sakichi_Toyoda

My memory is 50/50 on whether this is from real life or The Office.

> The car is surrounded by posters that read "Enter to win"

I just have to enter the car? Hold my beer!

> There is absolutely no doubt that ideogram promises a chance to win the car in exchange for the registration.

While a naive person may make that inference, a rational person may understand that 'ideogram' does not constitute an assertion that the picture depicts the prize to be won.

I sure don't mean to defend such predatory scammers, but I'm pretty sure they are legally safe on that part.

I had a friend last year who got very excited when she "won a car" and I had to talk her down when she said all she had to do was make an inconveniently long drive to a shopping mall to claim it / have her prize "verified."

> While a naive person may make that inference, a rational person may understand that 'ideogram' does not constitute an assertion that the picture depicts the prize to be won.

The law isn't based on a "rational" person, but a "reasonable" one, that is the judgement of an ordinary person with typical life experiences. That's why you're tried by a jury of your peers, not of logicians, lawyers or ethicists.

I don't think it's particularly "naive" to believe that retailers or advertising companies could make enough off of a contest promotion to justify the cost of a car. Most of the cost models of contests are opaque and, in most of North America at least, there is probably a general perception that regulations would be in place for something that so prominently implies that it is a contest for a car. The "trick" here is to set up the appearance of a contest while evading the legal controls for an actual contest. The very trick of disambiguating this in the more-or-less fine print is probably only allowed in things that aren't sweepstakes or contests.

Yes, in hindsight, it may seem that only "naive" people could believe this, and that "rational" people see through it. But this strategy probably represents something like the endpoint of a search strategy that found a successful meme, precisely because it mimics authentic, regulated contests.

In a world full of multi-million-dollar marketing budgets, where cars actually are given away to get attention, it's definitely not obvious at a glance that this isn't one of those sweepstakes.

I’m pretty sure you’re actually defending such predatory scammers here.

> a rational person may understand that 'ideogram' does not constitute an assertion

I'm sorry to see you were downvoted for presenting the other side even if you don't support these schemes.

But I have to ask, what constitutes "an assertion" after all? Written text is just one form of fixing and transmitting ideas; alphabets usually originate in actual ideograms with original meanings that were long lost and were reduced to a sound or syllable.

Transmitting an idea with a text-image combo is just as valid for a contract as any other medium as long as the meaning is clear and unambiguous. And there is no debate here that it's exactly the intention of the organizers to transmit the idea "you can win a car" - and in fact that's what most people understand, with a tiny exception of an educated and naturally suspicious minority. The only debate is if it's legal for the organizers to claim an ideogram that literally reads "Enter to win A CAR" does not imply the car is a prize.

I don't know how a judge would rule, but from a political preference - philosophical point of view I would strongly incline to deny them that right; we get a much nicer society with less scammers, without losing anything of substance.

Why on earth should we sacrifice people who may not have had exposure to financial literacy to allow these scammers to keep going?

I'm frankly surprised these aren't being blown out of the water by litigation. One might even be able to make the argument that the mall operator, timeshare commission payers, et cetera are complicit.

Mall operator, really? They're renting space in the mall out, that's it.

It's illegal to rent space to businesses you know to be conducting illegal activities. The mall operator can't rent space to a drug dealer or arms dealer, they can't rent a brothel, they can't rent space to human traffickers. Mall operators are not common carriers.

Read up on accessory laws in the US. Not saying it’s an open and shut case, but there is enough grey area that a DA wanting to make a name for themself for political gain could easily justify trying.

If they rented that space out to a brothel, would they be liable?

Why haven't they all been shutdown if they are clearly illegal? Also, I've seen these across the country.

There's generally no one doing the work basically. A gym I went to had notoriously bad competitions and advertising. It was never the "last memberships available" and there wasn't actually "10 days left" the counter just changed back on the final day. No one ever got the prizes either, they just never announced a winner, and a new competition started the same day. People still signed up by the hundreds.

Hundereds of formal complaints by people from the gym to the ombudsman and consumer affairs over more than five years amounted to literally nothing. They still do everything they used to.

Even more seriously, they didn't pay their employees superannuation, and it took years to even start the process of sorting that out.

As these car competitions are run by private businesses and not the car manufacturers my guess is they are simply too small of a fish to go after.

Now, just last week that same gym was implicated in a drug trafficking ring. But that's a different department of law enforcement...

It is incredibly frustrating that police don’t seem to actively enforce the majority of the laws. My local police seem anemic. There sure are a lot of them, though. Patrol cars are always visible. And, (right-wing) politicians seem to always want to be hiring more and upgrading their gear. For instance, recently they asked for a $30M shooting range. But, if the local newspapers are a good record, it seems that all they seem to do is give out speeding tickets, enforce drug laws, and and bust minorities and immigrants (for whatever). I’m not being facetious.

Anyone in the US have tips on how to get involved to help oversee and direct them? I’m pretty naive and don’t have much time, but I do have motivation, at least. I have tried calling them in the past to get a better understanding of what they do, but it was difficult to find the right person to talk to. I’ve considered doing independent research and reporting (via FOIA), but I also fear repercussions.

>It is incredibly frustrating that police don’t seem to actively enforce the majority of the laws

It's not just the police. It's the DA and judges too. Also, weirdly enough, the defense attorneys and public have a very large burden of fault here.

A court clerk I know realized while filing records that our county had been in violation of state law for over 7 years in handling one type of case. Hundreds, if not thousands of cases have been prosecuted in that time. Yet, there was exactly 0 formal complaints about the counties violation of the statutes.

The clerk in question had to point that out to an attorney quietly, who then finally made a complaint on a case they were handling. After that the country dropped a few hundred pending cases on its books. But why did it take 7 years? Why hasn't anyone went "wow, the county violated people's rights for years, should someone be prosecuted"

Nope, just more revenue collection for all involved.

It depends on the structure of the municipality. You may have a civilian oversight board which has some level of control, and this could be an elected or appointed position. The other option being to become mayor, city manager, or whatever chief executive your area has with oversight over the police force.

In many counties, Sheriff is an elected position.

> Why haven't they all been shutdown if they are clearly illegal?

Is anyone seriously complaining? This is the first I've heard about this scam in years.

The local DA and the DOJ have limited resources, probably. Popehat often talks about this.

Because after decades of capitalists whining about the large and bloated state and trying to cut down from every possible angle, there is probably noone left to do these jobs.

This is the market sorting itself out.

California has tens of thousands of local businesses, and yet only one official office to police them?

Lets say I get ripped off by a restaurant, store, or local company (and I find out later after looking at my CC bill), what recourse do I have? Call the police? What are they going to do? Do they even handle financial fraud? File with the attorney general of California? Is his office really going to look into my issue? Do we just assume all companies are law-abiding? This doesn't make sense to me.

(I know you can call your CC company and dispute the charge, but that doesn't punish the company doing it, except maybe not crediting them that one charge, that is not a deterrent to overcharge your customers, there should be some form of punishment by a government authority)

>Prohibited: "Failing to award and distribute all prizes of the value and type represented."

They can't mock-award it to someone of their own?

I'm fairly sure there's federal laws that forbid that. Of course, it's not a crime if you don't get caught. Plus there's a small sub-story in the article about someone that did win a Tesla, but couldn't afford the taxes they had to pay to actually get it.

You can win a car but you have to be able to pay taxes and insurance for it, too.

In my experience, it's quite common to have raffles and similar events rigged.

I've heard of lots of companies that have booths at conferences where they scan your badge for a """chance""" to win some prize. Then they look up each person's credentials, and if someone is high up in a company that they wish to establish communications with, they give that person a prize to get their foot in the door.

This is just a modern version of the fishbowl of business cards. You put out the bowl and say drop in your card to win “x”. Then when it’s time to do the drawing you look through the cards to see who’s the most advantageous person to establish contact with.

Huh. I never realized that's what those were for.

The whole point of badge scans/fishbowls is to collect leads. That said, especially at larger companies, legal departments are likely to be unhappy if they learn that trade show contests are being rigged.

Perhaps it's time to test that theory and chum the fishbowl waters with a doctored business card too advantageous to pass over.

Pretty clever

The sub-story about the Tesla is an example of one of the "other types of car giveaways" that is actually legitimate—not the telemarketing scam.

That sub story also takes place in a location where the local authorities are very active in finding and squashing scams (Vegas).

Sorry but seeing comments like this about topics I know about, make me question what other falsehoods and inaccuracies I am reading on HN.

The story about the Tesla took place at Four Winds Casino New Buffalo, which is in Michigan, not Las Vegas. Legally speaking, it is a sovereign nation so I would not put much trust in "local authorities" to protect consumers. Further, although Nevada does have a gaming commission, there are still plenty of "scams" and questionable promotional tactics used by companies both inside and outside of the casinos. Time-share sales, for example, are big business in Las Vegas.

The fine print where there actually is a car awarded generally says something like taxes are the responsibility of the winner. In the ones I've seen if you cannot pay the taxes you will be awarded the cash value instead. (I suspect there is a state law in place)

The real contests are generally run by a third party firm that has no interest in the winners. They are payed to pick someone at random and deliver the prize and paperwork.

Kind of like stock options at a startup that actually makes it.

Some of these promotion companies pay a lot of money just to have their cars as part of promotions (and the sweepstakes companies can get into big trouble if their systems are not setup to give away x cars. Most of them are time seeded so someone is guaranteed to win one a week).

If your already investing that much money, can't the company also cover the taxes, or do most states have laws forbidding that? It seems like bad publicity if your "winners" have to pay several thousand in sales tax to get their "prize car."

You're paying income tax, not sales tax, because winnings are income. (Think about professional gamblers...)

Income taxes are progressive, of course, and then there are a mess of deductions. But they could still make an estimate by just assuming the person is in the $37K to $92K bracket. So that's 25% [1].

> It seems like bad publicity if your "winners" have to pay several thousand in sales tax to get their "prize car."

I think they make the judgement that offering a prize that is 3/4ths as expensive would be less good publicity vs. the largely unknown bad publicity that is mostly oriented towards the government anyway.

[1] ... and yeah, there's 25% on that, and 25% on that, etc.; for tax rates < 1 it's convergent, if the tax_paid = rate * (original_value + tax_paid), just solve for tax_paid.

> You're paying income tax, not sales tax, because winnings are income. (Think about professional gamblers...)

Think about them why? Gambling income is in a completely different category from a prize you won for free. There's no reason they have to be taxed the same.

> Gambling income is in a completely different category from a prize you won for free.

The only difference is that as a professional, you're filing your taxes as a business. It's still "income"[1], it's just the entity filing is a business rather than a specific person.

Regardless, a prize you win is not taxed as a sale.

> There's no reason they have to be taxed the same.

To the extent they're treated inconsistently, people will use the discrepancy to game the system. Politicians do that deliberately, of course, since it's an opportunity for graft.

[1]: https://www.investopedia.com/terms/i/income.asp

> The only difference is that as a professional, you're filing your taxes as a business.

In gambling, you're putting money into the system, possibly applying skill, and getting money back out.

With free prizes, you're just being given things with nothing in return.

That's a big difference. And not one that you can effectively game. It's very clear whether you're inputting money or not.

For legit contests, there is usually a small cash prize in addition that covers the cost of sales/gift tax. This was the case back in the 90s through at least Oprah's car giveaway in the early 2000s. Maybe they dont do it anymore?

It never covered income tax though; thats on you.

That example was in Vegas were in casinos they do have legit give aways of cars. I use the term legit a bit loosely, you really can win, but the odds are highly unlikely.

Ah, the old prize soap racket: https://en.m.wikipedia.org/wiki/Soapy_Smith#Prize_package_so...

A classic!

My experience is that there needs to be a special attorney that oversees the selection of the winner.

Independent companies that conduct drawings do exist. Random.org does them, for example: https://www.random.org/draws/

I was about to say that I can't believe this isn't illegal, but I guess I shouldn't take things that companies do as an indicator of what's legal.

I bet a nice $1500 small claims case would be ideal to fight these people. Put them right on the threshold of not paying for a lawyer.

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