37-32-1      Definition of terms.
37-32-2      Payment not allowed as requirement to receive written prize notice.
37-32-3      Written prize notice--Contents.
37-32-4      Retail value and statement of odds.
37-32-5      Statement of shipping and handling fees.
37-32-6      Location and size of information in notice.
37-32-7      Name of sponsor on notice.
37-32-8      Limitations on solicitor or sponsor.
37-32-9      Sales presentations.
37-32-10      Prize unavailable.
37-32-11      Temporary or permanent injunction for violation.
37-32-12      Civil penalties for violation of injunction.
37-32-13      Civil penalties for intentional violation.
37-32-14      Civil action by individual.
37-32-15      Venue of action.
37-32-16      Conflict with other actions.
37-32-17      Violation is Class 1 misdemeanor.
37-32-18      Applicability of chapter.

37-32-1. Definition of terms.

Terms used in this chapter mean:

(1)    "Prize," any gift, award, or other item or service of value that is different and distinct from the goods, service, or property promoted by a sponsor and requires payment to the sponsor for the prize. Prize does not include an item offered in a promotion if all of the following elements are present:

(a)    No element of chance is involved in obtaining the item offered in the promotion;

(b)    The recipient has the right to review the merchandise or services for at least seven days and has a right to obtain a full refund in thirty days for the return of unused and undamaged merchandise or cancellation of unused services;

(c)    The recipient may keep the item offered in the promotion without obligation; and

(d)    The recipient is not required to attend any sales presentation or spend any money in order to receive the item offered in the promotion.

Prize does not include an item offered in a promotion for a book, recording, video, multimedia, or similar club in compliance with 16 CFR 425 or a continuity plan or single sale of merchandise where there is no minimum purchase required;

(2)    "Prize notice," any notice given to an individual in this state that contains a representation that the individual has won or will receive a prize and conditions receipt of such prize on payment to the sponsor for the prize. A prize notice also includes a notice which requires or invites the individual to make a contact by telephone or in-person interview to learn how to receive the prize or to obtain other information related to the notice. Prize notice does not include a notice informing the individual that the individual has been awarded a prize as a result of the individual's actual prior entry in a game, drawing, sweepstakes or other contest, if the individual is awarded the prize stated in the notice;

(3)    "Solicitor," any person who represents to an individual that the individual has won or will receive a prize;

(4)    "Sponsor," any person on whose behalf a solicitor gives a prize notice;

(5)    "Verified retail value," the price at which the solicitor or sponsor can demonstrate that a substantial number of the prizes have been sold by a person other than the solicitor in the trade area in which the prize notice is given, or no more than one and one-half times the amount the solicitor or sponsor paid for the prize.

Source: SL 1997, ch 223, § 1.

37-32-2. Payment not allowed as requirement to receive written prize notice.

If a solicitor represents to an individual that the individual has won or will receive a prize, the solicitor may not request, and the solicitor or sponsor may not accept, a payment from the individual in any form before the individual receives a written prize notice that contains all of the information required by § 37-32-3.

Source: SL 1997, ch 223, § 2.

37-32-3. Written prize notice--Contents.

A written prize notice shall contain all of the following information:

(1)    The true name, address, and telephone number of the solicitor and sponsor;

(2)    The verifiable retail value of each prize the individual has been selected or may be eligible to receive;

(3)    If the notice lists more than one prize that the individual has won or will receive, a statement of the odds the individual has of receiving each prize;

(4)    Any requirement or invitation for the individual to view, hear, or attend a sales presentation in order to claim a prize, the approximate length of the sales presentation, and a description of the property or service that is the subject of the sales presentation;

(5)    Any requirement that the individual pay shipping or handling fees or any other charges to obtain or use a prize;

(6)    If receipt of the prize is subject to a restriction, a statement that a restriction applies, a description of the restriction, and a statement containing the location in the notice where the restriction is described;

(7)    Any limitations on eligibility; and

(8)    If the individual is invited or required to telephone the solicitor or sponsor to enter or claim a prize, a statement disclosing the average length of such a call, any toll charges beyond normal long distance charges that the individual has to pay, and any other methods available to the individual to enter or claim a prize.

Source: SL 1997, ch 223, § 3.

37-32-4. Retail value and statement of odds.

The verifiable retail value and the statement of odds required in a written prize notice shall be stated in immediate proximity to each listing of the prize in each place the prize appears on the written prize notice and shall be in the same size and boldness of type as the prize. The statement of odds shall include, for each prize, the total number of prizes to be given away and the total number of written prize notices to be delivered. The number of prizes and written prize notices shall be stated in Arabic numerals. The statement of odds shall be in the following form: "___ (number of prizes) out of ___ written prize notices." The verifiable retail value shall be in the following form: "verifiable retail value: $___."

Source: SL 1997, ch 223, § 4.

37-32-5. Statement of shipping and handling fees.

If an individual is required to pay shipping or handling fees or any other charges to obtain or use a prize, the following statement shall appear in immediate proximity to each listing of the prize in each place the prize appears in the written prize notice and may not be in less than 12-point boldface type: "YOU MUST PAY $___ IN ORDER TO RECEIVE OR USE THIS ITEM."

Source: SL 1997, ch 223, § 5.

37-32-6. Location and size of information in notice.

The information required in a written prize notice under subdivision 37-32-3(4) shall be on the first page of the written prize notice in not less than 12-point boldface type. The information required by subdivisions 37-32-3(6), (7), and (8) may not be in less than 12-point boldface type.

Source: SL 1997, ch 223, § 6.

37-32-7. Name of sponsor on notice.

If a written prize notice is given by a solicitor on behalf of a sponsor, the name of the sponsor shall be prominently and conspicuously displayed.

Source: SL 1997, ch 223, § 7.

37-32-8. Limitations on solicitor or sponsor.

A solicitor or sponsor may not do any of the following:

(1)    Place on an envelope containing a written prize notice any representation that the person to whom the envelope is addressed has won or will receive a prize;

(2)    Deliver a written prize notice that contains language, or is designed in a manner, that would lead a reasonable person to believe that it originates from a government agency, public utility, insurance company, consumer reporting agency, debt collector, or law firm unless the written prize notice originates from that source; or

(3)    Represent directly or by implication that the number of individuals eligible for the prize is limited or that an individual has won or will receive a particular prize unless the representation is true.

Source: SL 1997, ch 223, § 8.

37-32-9. Sales presentations.

If a prize notice requires or invites an individual to view, hear, or attend a sales presentation in order to claim a prize, the sales presentation may not begin until the solicitor does all of the following:

(1)    Informs the individual of the prize, if any, that has been awarded to the individual; and

(2)    If the individual has been awarded a prize, delivers to the individual the prize or the item selected by the individual pursuant to § 37-32-10 if the prize is not available.

Source: SL 1997, ch 223, § 9.

37-32-10. Prize unavailable.

A solicitor who represents to an individual in a written prize notice that the individual has won or will receive a prize shall provide the prize to the individual unless the prize is not available. If the prize is not available, the solicitor shall provide the individual with any one of the following items selected by the individual:

(1)    Any other prize listed in the written prize notice that is available and that is of equal or greater value;

(2)    The verifiable retail value of the prize in the form of cash, a money order, or a certified check; or

(3)    A voucher, certificate, or other evidence of obligation stating that the prize will be shipped to the individual within thirty days at no cost to the individual.

If a voucher, certificate, or other evidence of obligation delivered pursuant to subdivision (3) is not honored within thirty days, the solicitor shall deliver the verifiable retail value of the prize in the form of cash, a money order, or a certified check. The sponsor shall make the payment to the individual if the solicitor fails to do so.

Source: SL 1997, ch 223, § 10.

37-32-11. Temporary or permanent injunction for violation.

If the attorney general or a state's attorney, has reason to believe that any person has violated this chapter, the attorney general or state's attorney may bring an action in the name of the state against such person to restrain by temporary or permanent injunction the use of such act or practice.

Source: SL 1997, ch 223, § 11.

37-32-12. Civil penalties for violation of injunction.

The attorney general or a state's attorney, upon petition to the court, may recover on behalf of the state, a civil penalty of at least one hundred dollars and not more than five thousand dollars per violation from any person who violates the terms of an injunction issued under § 37-32-11.

Source: SL 1997, ch 223, § 12.

37-32-13. Civil penalties for intentional violation.

In any action brought under § 37-32-11, if the court finds that a solicitor or sponsor intentionally used an act or practice declared to be unlawful by this chapter, the attorney general or state's attorney, upon petition to the court, may recover, on behalf of the state, a civil penalty of not more than two thousand dollars per violation. For purposes of this section, an intentional violation occurs when the party committing the violation knew or should have known that the conduct was a violation of this chapter.

Source: SL 1997, ch 223, § 13.

37-32-14. Civil action by individual.

Any individual who claims to have been adversely affected by any act or practice declared to be unlawful by this chapter may bring a civil action for the recovery of twice the actual damages suffered or five hundred dollars, whichever is greater, as a result of such act or practice. In addition, the individual may collect the court costs and attorney fees expended to bring an action under this section.

Source: SL 1997, ch 223, § 14.

37-32-15. Venue of action.

An action under this chapter shall be tried in the circuit court for the county in which the alleged violator resides or, if the action is brought by the attorney general on behalf of the state, has its place of business, in the circuit court of the county where the victim resides, or in the circuit court for Hughes County, South Dakota, at the election of the plaintiff.

Source: SL 1997, ch 223, § 15.

37-32-16. Conflict with other actions.

Any action arising under this chapter in no way affects any cause of action arising under other laws of this state or under the common law, whether or not the other cause of action is included within the provisions of this chapter.

Source: SL 1997, ch 223, § 16.

37-32-17. Violation is Class 1 misdemeanor.

Any person who knowingly or intentionally violates this chapter with the intent to defraud a consumer is guilty of a Class 1 misdemeanor.

Source: SL 1997, ch 223, § 17.

37-32-18. Applicability of chapter.

The provisions of this chapter do not apply to a transaction made by a merchant who operates an established business that has a fixed permanent location and who displays or offers consumer goods or services for sale on a continuing basis.

Source: SL 1997, ch 223, § 18.