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A U.S. Senate subcommittee began long-overdue hearings Monday regarding sweepstakes companies and misleading prize notifications.
Several witnesses will testify throughout the hearings about unfair marketing practices used by these companies to draw customers with promises of winning prizes.
Sweepstakes companies make hundreds of thousands of dollars every year from consumers who make purchases to increase their chances of winning. One such company, Publishers Clearing House, has 125,000 customers who each purchase more than $1,000 of merchandise a year.
Sweepstakes and the companies that run them must be regulated because there is no social benefit from companies publishing misleading information. These hearings are a way to reduce those misleading statements by sweepstakes companies and protect consumers from being swindled.
The subcommittee holding the hearings has proposed legislation that would require companies to disclose more prominently the "no purchase necessary" statement. Companies also would have to announce the odds of winning and would no longer be able to inform consumers they "are winners" unless they have won. Strong financial penalties would be imposed against companies, depending on the number of misleading mailings they sent.
Many companies already include "no purchase necessary" statements, but they're too difficult to read because of small type or shaded backgrounds.
The subcommittee should move forward with its proposed legislation because it is the least the government can do to protect unknowing citizens from money-hungry sweepstakes companies.
A large portion of the companies' marketing borders on false advertising. Claiming an unreasonable number of people have won various sweepstakes is nothing more than a scam.
Working for a standard
Collegiate Licensing Company, a company that manufactures clothing for more than 150 universities, recently has come under well-deserved scrutiny lately for poor treatment of its foreign employees.
A group of American college students took a trip to the Dominican Republic and witnessed poor working conditions where university-logo hats are manufactured. The trip has opened debate on the need for industry-wide standards to regulate such manufacturing.
Industry-wide standards are needed to prevent sweatshops and other human-rights violations in the production of licensed apparel. If collegiate licensing manufacturers have a common goal, it will be easier to attain. The problem remains because some companies won't comply with labor codes.
Collegiate Licensing Company revised its labor code in November, causing protests on college campuses nationwide because, according to University Students Against Sweatshops, it fell short in the areas of environment, wages, hours and women's rights. USAS also wants a provision added to prohibit schools from having contracts with licensers who operate in nations with human-rights violations.
Ohio University is represented by Licensing Resource Group, a competitor with Collegiate Licensing Company, but it is keeping an eye on the situation.
In order to make sure that university-sold clothing is not produced at the sake of human rights, a code must be written and enforced that prohibits such violations.
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