Promotional Competition – LawQuest

I have a moral dilemma – please could you help me? I work as an admin clerk in a small financial services firm. Sales have been flat lately, so the company has decided to run a competition. The way it’ll work is that there’ll be advertising both to our customers and in the media that people who take out any insurance products with us will stand a chance of winning a holiday to Disney World. People can also buy extra tickets for the competition if they want. Then, on the day of the draw, it’ll be rigged so that our Sales Manager will draw our marketing agent as the winner. She’ll then reject the tickets on the basis that the date the holiday has been booked for is “too inconvenient”. I’ve been given the job of consolidating all the entries and passing on new customers to our agents to cold-call. But I’m really not happy with this competition. Is it legal? And what can I do about it? Note: I really need my job, so I don’t want to be responsible for getting the firm into trouble!

This competition is definitely not legal and can be declared null and void. Additionally, this scheme can result in fines and even imprisonment. The Consumer Protection Act regulates promotional competitions, and amongst other things, this Act prohibits companies from charging an entry fee for promotional competitions and prohibits the company’s employees, partners and agents from entering the competition. The CPA also requires the company to appoint an independent professional to oversee the competition. The rigging of this sham competition also risks having a fraud claim lodged against the company. You could start by raising your concerns with your manager and be pointing out the requirements of section 36 of the Consumer Protection Act, not to mention the risk of imprisonment. It should become apparent to your firm that this competition is clearly not compliant and will very likely back-fire with their customers. If this doesn’t work, you could report the firm to the Consumer Commission – if one of your customers doesn’t get there first!

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