Was a sweepstakes entry form that switched long-distance service deceptive under South Carolina law in 1995?

Official title

Asking whether the promotional material which is being used by a company to promote its long-distance telephone service is legal under South Carolina law.

Requester

The Honorable William C. Mescher, Senator District 37

Plain-English summary

In a 1995 informal letter, the South Carolina Attorney General's office concluded that a long-distance telephone company's sweepstakes promotion appeared unlawful under the state's unfair trade practices law. The prominent wording invited consumers to enter a prize drawing, while the same form apparently authorized a change in long-distance carrier. The letter said that entering without switching carriers was possible, but that option was buried at the end of the rules.

The author assessed the promotional material as a whole and said it had the capacity or tendency to deceive. The letter explained that intent to mislead was unnecessary under the cited standard. Because long-distance service fell within the Public Service Commission's jurisdiction, it suggested that the requester contact the commission and ask it to act; the letter did not determine the commission's jurisdiction conclusively.

Currency note

This opinion was issued in 1995. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: What made the sweepstakes form misleading to the AG's office? A: “Official Entry Form” appeared prominently, while the long-distance application language was less conspicuous. Entering the drawing apparently authorized a carrier switch, and the way to enter without switching was buried in the rules.

Q: Did the letter say the company had to intend to deceive consumers? A: No. It applied a standard based on the promotion's capacity, effect, or tendency to deceive, not proof of intent.

Q: Did the AG letter order the company to stop the promotion? A: No. It gave an informal opinion that the practice appeared unlawful and suggested asking the Public Service Commission for action.

Background and statutory framework

A senator sent the office promotional material for a long-distance carrier's sweepstakes. The letter applied the South Carolina Unfair Trade Practices Act to the presentation of the entry form and the inconspicuous carrier-switch disclosure.

Citations and references

• S.C. Code Ann. § 39-5-20

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/october-10-1995/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/12/1995oct10mescher.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
CHARLES MOLONY CONDON
ATIORNEY GENERAL

October 10, 1995
i

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The Honorable William c. Mescher
Senator, District #37
Post Off ice Box 1
Pinopolis, SC 29469
RE:

Informal Opinion

Dear Senator Mescher:
As you are aware, your letter of September 4, 1995, to Attorney General Charles Molony Condon was referred to me for a response. I have read your letter and the attachment that you enclosed. As I understand your letter, you have asked whether the promotional material which is being used by a company to promote its longdistance telephone service is legal under South Ca!olina law. The promotion in question includes the use of an official entry form by which participants may enter a sweepstakes drawing for a number of valuable prizes, including a 1995 Mustang automobile. The sweepstakes form is labeled as "Official Entry Form & Long Distance Application. 11 Not surprisingly, the words "Official Entry Form" are in substantially larger and bolder print from the words which follow, i.e., "&Long Distance Application Form. 11 The entry form contains additional information about the sweepstakes promotion. Apparently, when a person enters the sweepstakes promotion, the person is thereby authorizing the company conducting the promotion to switch the person's longdistance carrier. It is not, however, clearly disclosed that mere entry of the sweepstakes promotion constitutes a knowing and intelligent authorization by the person to switch his or her longdistance telephone service. While it is true that a person may

RE\1BERT

c. DEN ... IS BL'ILDING

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POST 0FF1CE Box 11549

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COLL"IBIA. S.C. 29211-1549

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TELEPHONE:

803-734-3970

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F~CSl~llLE: 803-253-628 1

The Honorable William c. Mescher
.Page Two

October 10, 1995

enter the drawing without switching long-distance carriers, the person entering the promotion would have to read the entire contents of the rules, and the opportunity to enter without switching carriers is buried at the very end of the promotional rules and is entirely inconspicuous in the overall promotional literature. The South Carolina Unfair Trade Practices Act, § 39-5-10, et. seq., s. c. Code Ann., 1976, expressly prohibits unfairer deceptive practices in trade or connnerce. Section 39-5-20, Code specifically provides as follows:

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§ 39-5-20 Unfair methods of competition and unfair or deceptive acts or practices unlawful;

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Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or connnerce are hereby declared unlawful.

It is obvious that the conduct here involves trade or connnerce, so the sole question becomes whether the use of the promotion is unfair or deceptive under South Carolina's Unfair Trade Practices Act. I

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The South Carolina Supreme Court has held that the standard for determining whether an act is deceptive is whether the conduct has the capacity to deceive. State ex rel. McLeod v. C & L Corporation. Inc., 280 S.C. 519, 313 S.E.2d 334 (Ct.App. 1984}. There is no need to show that a claim or representation was intended to deceive, only that it has the capacity, effect or tendency to deceive. State ex rel. McLeod v. C & L Corp .. Inc., supra; Young v. Century Lincoln Mercury, Inc., 302 S.C. 320, 396 S.E.2d 105 (1990}; Clarkson v. Orkin Exterminating Company, 761 F. 2d 189 {4th Cir. 1995} . The courts have held that even a truthful statement may be deceptive if it has the capacity to deceive. State ex rel. McLeod v. C & L Corp., Inc., supra. Viewing the promotional material in its entirety and applying the standard set by our Supreme Court, we are of the opinion that the sweepstakes promotion used by the company has the capacity, effect or tendency to deceive and is an unfair or deceptive act or practice as prohibited by § 39-5-20, S. C. Code. Therefore, the practice appears to be unlawful under South Carolina law.

The Honorable William C. Mescher
Page Three

October 10, 1995
Since the offering of long-distance service is under the jurisdiction of the Public Service Commission, it may be that the Public Service Commission has primary jurisdiction over this type of conduct by companies offering long-distance service within this State. We recommend that you contact the Public Service Commission and request action by that agency. You may feel free to use the contents of this letter as part of your complaint to the Public Service Commission. I trust this answers your question. If, however, you have any additional questions, please feel free to contact me at your convenience. This letter is an informal opinion only. It has been written by a designated Assistant Deputy Attorney General and represents the position of the undersigned attorney as to the specific questions asked. It has not, however, been personally scrutinized by the Attorney General nor officially published in the manner of a formal opinion. With kind personal regards, I am, Very truly yours,

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William K. Moore
Assistant Deputy Attorney General

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