ED Magedson – Founder
Listia Class-action lawsuit for illegal sweepstakes ,raffles, Mountain View California
A majority of the items on Listia are sold via auctions for credits between users. There is also another option to obtain an item or more of the virtual currency through "raffles". Raffles may only be created by sponsor accounts and the Listia account itself. The raffles system is designed to work in which every entry has an equal chance at winning the item.
Intentions for raffles were originally designed to allow third party organizations an opportunity to give away an item on Listia that revolved around chance instead of being the highest bidder in an auction as well as an inflation control tool. Users are able to purchase a set amount of tickets for each raffle based on their participation level on the site. If you are a new user you're able to purchase less tickets each day. Unlike auctions where credits are transferred back and forth between users the credits used to purchase tickets in a raffle are removed from circulation thus helping to keep inflation under control on the site. [continued below]....
California, where Listia has a physical preference, has a few different terms which they would define a "raffle" by which include contests, sweepstakes, or lotteries. A contest is where the participants must pay a value and use some skill to win. The difference between a sweepstakes and a lottery is that the participants in a lottery have payed or have promised to payed a value for a chance to win. The California State Lottery is the only party that may operate a lottery in the state with the exception of some bingo games by charitable organizations. There are a few methods that a user may enter one of Listias raffles, which include sharing the raffle on your Facebook page, buying tickets using the virtual currency, and a mail-in entry. Looking at the three different terms we can immediately rule out that raffles are not a contest since the chance to win requires no skill and in some instances no value is paid. Since there are methods of free entry available to participants and payment is not required to participate this would also rule out a raffle from being strictly a lottery in this state.
The raffles advertised on Listia are defined as sweepstakes in California and there are rules which must be abided by. Some of these rules which are partially or fully violated by Listia are listed below. When creating a sweepstakes one must include a statement that no purchase or payment is necessary in order to enter the sweepstakes. This statement must be in its own paragraph and in all capital letters in contrasting type not smaller than the largest type used in the official rules. Listia states "No Purchase Required to Enter or Win." which is in a paragraph of it's own in bold but not in all capital letters or containing "no payment". The date the final winners will be determined must be disclosed in the official rules. The date in which the raffle ends is posted on the raffle page itself as the official rules are used a blanket template for all raffles posted on the site. All entries must be treated equally, free entries cannot have any disadvantage from those which were accompanied by an order. Solicitation materials cannot represent that an entry accompanied by an order may win or may win more prizes than an entry not accompanied by an order or that an entry without an order will have reduced chance of winning. In theory all entries into a raffle on Listia have an equal chance to win. The mail-in method of entry does seem to have a disadvantage though as the address stated in the rules is listed as an old business address for the company, so the likelihood of having your mail-in entry received before the raffle ends could be low or non-existent even though you meet the time constraints. On a particular raffle page you'll also see some text at the top of the screen stating to use your credits to buy raffle tickets and the more you buy the better your chances are. This is soliciting that you will have a better chance to win if you obtain your tickets through purchase of the tickets. Solicitations offering people in California the opportunity to participate in a sweepstakes must disclose the odds of receiving each prize. The disclosure must be clear and conspicuous in a format such as 1:100 or 1 chance in 100. The odds of multiple prizes if offered must be stated separately and immediately adjacent to the identification of the prize in which in relates, official rules, or consumer disclosure. Listia seems to have mislead raffle participants by display the number of participants which is a much lower number than the number of entries. A lower number such as the way Listia has chosen to display gives a participate a feeling that they will have a better chance at winning and thus purchase more tickets. Listia could just as easily display total entries updated real-time as they do participants and meet this requirement eg. 1:1,030,221 chance instead of 1,327 for example.
In California a person is guilty of a misdemeanor if they violate any of the provisions on operation of sweepstakes and may be prosecuted by the Attorney General or a district attorney. The provisions are also enforceable by civil court actions which can be filed by private parties, district attorneys, the Attorney General, and some others. Each violation may include civil penalties of up to $2,500, injunction, and restitution and may also be subject to additional civil penalty of up to $2,500 for each violation as an unlawful business practice.
There are different laws in different jurisdictions on how sweepstakes are defined and designed to operate. According to Listia their raffles are open to all legal residents of the 50 United States, District of Columbia, and Canada (excluding Quebec). Some states have define a lottery as requiring consideration and requiring a user to have an account on Listia may meet that requirement, if you look at the mail-in method it states list your username. If you're not a registered user on the website how does that entry get handled, ignored? New York requires bonds for sweepstakes over a certain value and with the way the rules page is layed out on
Listia for their sweepstakes they may be subject to this. Canada is also international and may require a contest requiring some question of skill. If Listia isn't conforming to the rules on the operation of sweepstakes in the state they operate from there are more than likely violations in other states as well.
This report was posted on Ripoff Report on 03/17/2014 05:19 PM and is a permanent record located here: http://www.ripoffreport.com/reports/listia/mountain-view-california-94041/listia-class-action-lawsuit-for-illegal-sweepstakes-raffles-mountain-view-california-1131357. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.
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