N.M. Admin. Code § 12.2.3.9

Current through Register Vol. 35, No. 21, November 5, 2024

Section 12.2.3.9 - REGULATIONS

It is an unfair or deceptive trade practice for any person to engage in a game promotion in connection with the sale or lease of subdivided land, condominiums, time-share interests or campground memberships unless the game promotion is in compliance with the following regulations:

A. General regulations.

(1) Claims or representations contained in any promotional material shall be accurate.

(2) Promotional materials shall state fully and clearly all factual material so as neither to misrepresent the facts nor to create misleading impressions.

B. Specific regulations.

(1) No promotional materials shall:

(a) misrepresent a fact or create a false or misleading impression;

(b) make a prediction of specific or immediate increases in the price or value of the property interest promoted, unless it is registered as a security with the securities division of the New Mexico department of regulation and licensing;

(c) contain a statement concerning future price increases by the seller of the property interest promoted which are nonspecific or not bona fide;

(d) describe any improvement to the property interest promoted that is not required to be completed or that is uncompleted unless the improvement is conspicuously labeled as, for example, "NEED NOT BE COMPLETED", "PROPOSED" or "UNDER CONSTRUCTION";

(e) misrepresent the size, nature, extent of development, qualities or characteristics of the offered accommodations or facilities;

(f) misrepresent the amount or period of time or nature of the period of time during which the accommodations or facilities will be available to any purchaser. (For example, time-share weeks are commonly characterized with colors or other adjectives, such as "red", "white" and "blue", or "high", "medium" and "low." Prospective purchasers should know whether they have purchased the use of a specific week or a "floating week" during a specific period.);

(g) misrepresent the nature or extent of any services incident to the property interest being promoted;

(h) make any misleading or deceptive representation with respect to the contents of any disclosure statement, the contract or any other statement of the purchaser's rights, privileges, benefits or obligations; or

(i) misrepresent the conditions under which a purchaser may exchange the right to use accommodations or facilities in one location for the right to use accommodations or facilities in another location. For example, if a consumer purchases a "red "or "high" week at the resort visited, but it will not be honored as a "red" or "high" week for exchange purposes, that fact should be disclosed.

(2) All promotional materials shall clearly and conspicuously disclose any and all conditions on or eligibility requirements for:

(a) the receipt of anything of value offered in connection with the promotion;

(b) and the sale or lease of the property being promoted.

(c) This does not mean that each and every term of sale must be included on a game promotion piece; only conditions of eligibility for purchase must be disclosed. Subject to applicable federal and state law, promotions may request information regarding age, income level and marital status. For example, the piece may contain a statement similar to the following: The recipient named in this letter is eligible to receive a gift in these sweepstakes. However, (resort name) is designed to be of particular interest to credit-worthy single persons or married couples between the ages of 21 and 60 who have an individual or combined income of at least $20,000. We request that if you are married, husband and wife must be present. Both must also attend a sales presentation of at least one hour to claim the gift.

(3) Offers of anything of value at no cost or reduced cost made in connection with a promotion shall not be described as "awards", "prizes", "gifts" or by words of similar meaning if the recipient must purchase anything or give, or promise to give, any sum or other consideration, other than visiting the property to claim the gifts, in exchange for the item. The word "sweepstakes" should not be used if the offer is in fact a "giveaway".

(4) Recipients of any promotion offer shall not be described as "winners" or "finalists" or notified that they have "won a prize" unless either:

(a) the prizes that have been won are to be given to the recipients without condition (i.e., there are no eligibility requirements, sales tours or other requirements to receive the gifts or prizes); or

(b) any conditions attached to the receipt of anything of value offered in such a promotional piece are clearly and conspicuously disclosed in the offer and leave no reasonable possibility that the offer will be misunderstood.

(5) All promotional materials must specifically and affirmatively disclose in boldface type that the purpose of the promotion is the sale of interests in subdivided land, condominiums, time-shares or membership campgrounds. If the recipient of the promotional material must attend any sales presentation, this fact must be prominently stated in boldface type, together with a reasonable estimate of the least amount of time required to attend the sales presentation. (For example: YOU MUST ATTEND A SALES PRESENTATION OF AT LEAST ONE HOUR BEFORE YOU WILL RECEIVE YOUR GIFT.)

(6) It is unlawful to make offers of anything of value in connection with a promotion unless contemporaneously, with the offer, all expenses the recipient must pay, excluding the cost of travel to the area being promoted, are disclosed to the recipient in the offer.

(7) In the case of vacation certificates, all conditions of the vacation must be clearly and conspicuously disclosed in the promotional piece, including any required deposits, points of departure if outside of New Mexico, the nature of the accommodation and all items and conditions of the trip. For example, if two persons must take the trip, but free airfare is provided for only one person, this should be clearly disclosed. Vacation certificates must be redeemable within a reasonable period of time, which should be disclosed, and they must not include unduly burdensome or unreasonable procedures which must be followed in order to take the trip.

(8) Complete rules and procedures for any contest or drawing advertised in connection with a promotion shall be included clearly and conspicuously in promotional materials.

(9) All written promotional materials shall contain the name and address of the entity conducting the promotion, and of the sponsor, developer, broker or owner, as applicable, on whose behalf the promotional material is distributed.

(10) Promotional materials shall not employ any term that creates confusion, misunderstanding or a reasonable impression that the promotion is connected with a government agency.

(11) Promotional pieces shall not include any words or graphics which simulate a notary "seal" or which otherwise tend to mislead the recipient as to the legal significance of the document.

(12) The manner in which winners are selected must be accurately disclosed. The following are examples of such disclosures:

(a) The prize which you receive has been randomly pre-selected by computer. You must match your number to numbers on the official gift list at the resort to determine the particular gift you will receive.

(b) Every person visiting the resort will receive the set of luggage. In addition, your number will be placed in a container at the resort. When there are 1,000 numbers in the container, an independent accounting firm will draw three numbers, the holders of which will receive the car, the $500 and the TV set, in that order.

(13) It is unlawful to represent that a promotion is a "survey" or a "research project" if it is not, and if the primary purpose of the promotion is to lease or sell a property interest.

(14) Promotional material shall not describe any gift to be given in terms which are confusing or misleading. The verifiable retail value must be clearly disclosed in arabic numbers following a dollar sign. In disclosing the verifiable retail value of any gift, the promoter or seller must be able to substantiate it at the time the alleged value is asserted. Such substantiation may be provided with the following:

(a) the name and address of the retail outlet at which the product or a substantially similar product is or has been sold, the price at which the product was advertised or sold and the dates on which the product was advertised or sold at that place or places; or

(b) proof that the value stated is no more than three times the price paid for the item by the promoting entity or developer.

(15) The odds of receiving each gift must be clearly and conspicuously disclosed.

(a) An example of stating the odds clearly for any gift other than a premium gift is as follows: "Your chances of winning the _______________ (gift) are one in 100,000."

(b) An example of stating odds clearly for a premium gift is as follows: "Out of 100,000 persons who respond to this mailing, 99,997 persons will receive the (premium gift)."

(16) Offered gifts must be delivered on site when the recipient appears and establishes his/her eligibility for the gift. If the gift is of a kind not capable of immediate delivery (e.g., a vacation, automobile, etc.), then the recipient must be given specific documentation to enable him to claim the gift. Promoters and owners shall have an adequate supply of premium gifts on site and if an item cannot be supplied to an eligible recipient, it must be shipped within 30 days to the recipient's address without additional cost or burden to the recipient.

(17) The geographic area covered by the promotional mailing must be clearly and conspicuously stated in the promotional piece. If the promotion is part of a national sweepstakes, it must be clearly and conspicuously stated that the described prizes may be awarded to people outside of the geographical area within which that particular promotional piece is distributed, with a corresponding explanation that every gift may not be given away at every location.

(18) Names of winners of previous gifts may not be used on a future promotion unless disclosure of future use is made known to the recipient on the original promotional piece, or unless the recipient provides written consent for such disclosure. Every promotional piece must also include an explanation of the procedure by which the consumer may receive a list of names and addresses of major gift recipients who have consented to have their names made available to recipients of promotional pieces.

(19) The date upon which the promotion begins and the date upon which it terminates must be clearly stated.

(20) Promotional pieces shall not represent that there is a limited time in which to accept the terms of the offer, or that a gift is only available on the day the recipient visits the resort, if such is not the case.

(21) Promotional pieces shall disclose that the supplier reserves the right to substitute gifts of greater or equal value or to give rain checks if such is the case.

(22) No offer shall be made of items commonly given recipients if there is reason to know that the items are not or will not be readily available at the time and place the recipient is to receive them.

(23) Items shall not be represented by way of description, name, pricing, narrative copy or graphic depiction so as to mislead or deceive the recipient as to the true nature, size or kind of an item.

(24) Promotional pieces shall not use any type size, style, location, color, layout, headline or illustration which renders misleading any material fact of the offer, including but not limited to using excessively small size type and/or an inconspicuous location for eligibility conditions, odds or value.

(25) Telephone solicitations which involve game promotions need not disclose all information described herein but they must disclose at least the following information:

(a) that the purpose of the solicitation is the sale of a time-share, subdivided land, condominium or membership campground interest;

(b) that to claim an offered gift, the listener must visit the resort and hear a sales presentation, including a reasonable estimate of the least amount of time that the sales presentation will take;

(c) the principal conditions attached to claiming the gift;

(d) the verifiable retail value of any gift promoted and the odds of receiving each such gift offered if the promotion is a sweepstakes, as set forth in paragraph 9.1.2.15 above [now Paragraph (15) of Subsection B of 12.2.3.9 NMAC].

(26) All promotional material may be submitted to the attorney general for review before distribution in this state. The attorney general may comment on the legal sufficiency of the material or take such other action as he deems appropriate. The attorney general's failure to respond shall not be construed, however, as an approval, exemption or waiver of any statutory or other enforcement authority by the attorney general. No person shall use or refer to any correspondence to or received from the attorney general in any promotional piece or in any sales presentation. It shall be an unfair or deceptive trade practice to state directly or indirectly that the attorney general or the state of New Mexico has approved, sanctioned, authorized or given any favorable opinion concerning the legality of any game promotion.

N.M. Admin. Code § 12.2.3.9

5/1/98; Recompiled 10/15/01