Dave Dobin is a guaranteed winner!
No, Dobin has not received any sweepstakes offers; he just sends them -- about 5 million a year. And his solicitations rake in about $2.5 million in revenue a year, according to estimates he made yesterday before a Senate Permanent Subcommittee on Investigations hearing on deceptive mailings.
"That's a pretty profitable undertaking," concluded Sen. Richard J. Durbin (D-Ill.), after noting that Dobin's firm awarded only $34,000 in prizes last year.
"I don't get all that in my pocket," Dobin replied, saying he has some considerable expenses, including at least $1 million in postal fees. "But it's profitable, clearly it is."
Dobin has pleaded guilty to mail fraud for his sweepstakes mailings and is awaiting sentencing. He faces a maximum penalty of five years in prison.
Dobin, who's been in the business since 1994, said his mailings offered "expedited handling" for an additional fee. "While I collected that fee from many customers, I did not assure that these orders, in fact, were expedited," Dobin said.
Yesterday's hearing was part of the subcommittee's ongoing investigation into the sweepstakes industry and its efforts to rein in deceptive and misleading promotions. Last May, the subcommittee unanimously approved legislation to require that solicitations clearly state no purchase is required to win and that they prominently post the odds of winning. The measure also gives the U.S. Postal Service greater authority to investigate and stop deceptive mailings and sharply increases penalties for violations.
Sen. Susan M. Collins (R-Maine), chairman of the subcommittee, said she hoped the Senate would vote on the measure before Congress goes on recess in early August. Meanwhile, a House subcommittee is slated to start work on a similar measure later this month.
Until yesterday, the subcommittee had focused on the largest sweepstakes firms, such as Publishers Clearing House, American Family Publishers, Time Inc. and Reader's Digest. But Collins said the panel also is concerned about the smaller firms that engage in "much more deceptive and shady business practices, including, in some cases, possible fraud." Collins estimated that the small firms sent about 100 million mailings in 1998, received more than 4 million orders and cost consumers more than $40 million.
Among the subcommittee's latest concerns are a number of practices:
Telling consumers they are guaranteed winners, implying they may gain $10,000 or more, when in reality all they've won is $1 or "no less than 25 cents."
Using names, phrasing or pictures to imply the sweepstakes are related to a U.S. agency, such as the "Official United Sweepstakes of America."
Using several different corporate names to solicit responses for the same sweepstakes.
That's what Dobin's firm does, sending out as many as 40 different promotions for a single prize. "One person could get 20 to 25 [solicitations] in a cycle," said Dobin, who said his company's name, Lone Star, is always listed as the corporate sponsor in each mailing. "Our rules clearly state that Lone Star may use different copy and different promotional names in the same contest. . . . I believe that I should be able to rely on the entrants reading [the rules]."
Sen. Carl M. Levin (D-Mich.) disagreed and called Dobin's practice "fundamentally a tissue of lies. . . . What you are doing is sending out five, 10, 20 different-looking offers so people believe they are entering different sweepstakes. . . . I believe this is deceptive and should be stopped. . . . I hope we can put you out of business."
But Dobin told the subcommittee he intended "to remain in the business and follow whatever laws are enacted."
Also testifying was Anthony Kasday, head of a consulting firm that has received almost $1 million in the past 18 months from sweepstakes firms. Kasday took the Fifth Amendment twice when asked questions about his solicitations.
CAPTION: Dave Dobin, left, confers with his attorney, Peter Tomao, during questioning by a Senate panel's hearing on deceptive mailing practices yesterday.