We have a website where people can win cash sent to them via paypal/bank wire, or other rewards like an Amazon $200 Gift card. To qualify all someone needs to do is invite 100 or more friends using our Tell a friend script, and these invitees will be sent an email from the inviter encouraging them to obtain their free insurance quote.
If a person invites at least 100 people from USA over 18yo, they qualify to instantly download an ebook/s and also to go into a pool of people (which resets each month), of which we will select randomly each month end to win $200 cash, directly sent to them via papal/bank.
We will notify the winner via email that they have won and request they send us their paypal/bank details so we can send them the $200 Cash. At this point, we are considering to send the winner that we randomly select, physical cash as this would be more convenient but may later consider a $200 gift card if logistics of delivery is easier.
To clarify, there is no obligation for the invitee to check their email and click on their invitation link they will receive from the inviter. However, if the invitee does click on the link in their email and then go and check their insurance rate, we get paid by our advertisers for this lead, whether they buy or not. Using this form of word of mouth advertising can be very powerful. Its a win, win, win for all parties. Our advertisers are getting new leads, We are getting paid from advertiser for generating them new leads, The "inviter" is getting an incentive to invite 100+ USA residents free like an ebook and also going in the draw to win $200 Cash, And the "invitee" is benefiting as they could potentially save hundreds on their insurance.
We certainly will honor and send the winner $200 cash each month, no issues at all and we never intend to do absolutely anything shady.
I know there are some legal issues as we are offering a cash reward and/or a gift card reward to the randomly selected winner. In this light, my company would like to operate completely within the FTC guidelines for this business practice and model of operation.
Can you please advise/suggest:
1) exactly what the legal issues are and how to ensure full compliance to operate this system legitimately within the entire USA
2) what the best practices are regarding sending the $200 cash prize to the winner?
3) how to "randomly select" the winner so we are completely legal and operate fully within the parameters of the FTC.
4) anything else that we should know so we can operate this system in the entire USA
We look forward to your response at your earliest so we can move forward to implement this system within the next few days and go live soon.
Thank you for your time and expert advice/suggestions so we can operate within the boudaries of all the regulatory bodies like Federal Trade Commission (“FTC”), the Federal Communications Commission (“FCC”), the United States Postal Service (“USPS”), and the United States Department of Justice (“DOJ”)
1 Answer from Attorneys
You are asking for a major legal consultation on a free internet Q&A site. It doesn't work that way. This service is for people with basic, simple questions, not access to substantial business law advice by a for-profit business for free.
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