The Federal Trade Commission is launching a drive against promoters who offer strings-attached "vacations" as prizes to lure unsuspecting consumers into spending money.
The agency says its Atlanta office has been conducting an industry-wide investigation of the practice, and has issued an informal warning to one unidentified firm, described as one of the biggest in the business. Similar notices will be sent to other companies, the FTC said.
The promoters involved usually send postcard to "winners" who are urged to call to accept their "prize" -- typically a Las Vegas or Florida vacation, the agency said. The winners are then told they have to pay a fee, which can range up to $50.
If the vacations materialize, the FTC said, the winners sometimes find themselves subject to a high pressure land sales pitch.
The FTC said it is notifying such operators that it is illegal to offer "free" vacations if the offer is loaded with previously undisclosed conditions and limitations.
The industry will also be told it is a violation of the law to use a fictitious promotion to get leads for prospective buyers; to say that prospective customers have already been "specially selected" or that they have only a short time to accept, if that is not the case; or to misrepresent that something is being given.
In addition promoters may not claim that refunds are available unless they are, misrepresent the availability of prizes or fail to disclose that an offer is being made in connection with a promotion.