Does your credit union or bank run online giveaways? Awesome. These contests and sweepstakes, and giveaways are a great way to get exposure, and to attract attention to your social media profiles. But, there are specific laws and regulations that govern these giveaways. And if you don’t have the right risk management in place, you can fall short of social media compliance for credit unions or social media compliance for banks and that can result in you getting sued, and even have your social media profiles deleted.
As a social media law firm, we’re here to tell you how your bank or credit union can comply with social media laws when running online giveaways, contests, and sweepstakes.
So, first, what are these online giveaways? You might have a post that says something like, “Like my post and we’ll pick a random winner to win, I don’t know, 100 coffee mugs.” Okay? Maybe you wouldn’t have that, but you’re having some sort of game that people can participate in and win a prize. And let’s face it, these things are awesome for engagement. It creates awareness for your products and services, it helps to give the community something for free, and it increases engagement on your social media profiles. So, it will make it better for Facebook and Instagram, and Twitter to show your content to other people in the future.
It is a really great idea to run these giveaways but, there are state and federal laws that govern these online giveaways, and there are even social media website rules that if you don’t follow the laws and FFIEC Social Media Guidance, you can get sued. And if you don’t follow the social media site rules, you could have your profiles banned for life. I don’t know what’s worse, getting sued, or losing your Facebook page. In today’s day and age, it might be the second one, and I don’t want it to happen to you. So first it’s important to know that giveaways are actually falling into one of three categories.
Sweepstakes, contest, and lotteries. Sweepstakes is a game of chance. “Like my post, and we’ll give a random winner a prize.” A contest is a game of skill. “Upload a photo to our Facebook page of you wearing a red shirt on Valentine’s day, with the hashtag, I love my bank, or I love my credit union, and we will pick the most creative winner.” That’s a contest. Lotteries are where it’s a game of chance, kind of like a sweepstakes, but you’re requiring people to give something of value. Whether it’s signing up for a checking account, or even liking a post to something of value.
It is a legal to run lotteries, only states can run them. You can actually go to jail for running a lottery. No one wants to go to jail, so you don’t want to run a lottery. But what’s important to know is, that there are different rules and laws that govern sweepstakes, and different rules and laws that govern contests. So if you’re running a giveaway, you have to figure out, am I running a sweepstakes, or am I running a contest, and what do I need in order to comply with the law when I do so, so I don’t get sued or have my profiles deleted? What do you need in a nutshell?
You need to have a few things. First, you have to have your giveaway rules or terms and conditions. This makes sense. If you and I were going to play a game like, I don’t know, soccer, we’re going to want to know the rules of the game before we begin. The rules might be, the game is an hour long, split into two halves, the people that score the most goals wins, and if you kicked me in the shin, you’re going to get a yellow card or red card and get kicked out of there.
So long as we both agreed to the rules at the beginning, then it’s okay for us to play the game. And the same thought process applies when it comes to these online giveaways. You are required under the law, to have contests, sweepstakes or giveaway terms and conditions, or rules, and the specific rules must match the laws that apply to a sweepstakes or a contest. And if you don’t, you can get sued. I hate that. So you have to have those terms and conditions or rules, and you have to have one for sweepstakes, and you have to have a different one for contest.
The second thing that you need to do, is you have to disclose those rules in a clear and conspicuous manner, and sometimes includes some proper disclaimers. This might mean putting the hyperlink to the terms directly in your social media post that promotes the online giveaway. And you have to do it every time you promote the giveaway because, you have to have the terms next to the game itself. The third thing that you’re going to need is to comply with the social media giveaway website guidelines. And what makes it a bit complicated is, every social media site is different.
Facebook’s rules are very complex, Instagram and Twitter’s a little bit easier to follow. LinkedIn, you can’t run a giveaway on LinkedIn, it’s against the rules. So what happens if your bank or credit union runs an online giveaway, like a contest or sweepstakes and doesn’t comply with the site’s rules? You guess it, your profiles can get deleted and banned. And trust me as a social media lawyer, it is darn near impossible to get those things back. So that’s what you need to do to comply with the law. So, what does every bank or credit union that runs an online giveaway need?
You need to have a social media promotions or giveaway policy, procedures, terms and conditions, and a checklist. We prepare here at the social media law firm what’s called a social media promotions guy. It provides draft sweepstakes rules, draft contest rules. It includes checklist for compliance. It includes specific disclosures or disclaimers, and it includes checklist of how to comply with each of the social media sites’ laws. Your bank or credit union needs to have something similar. At minimum, you have to have a policy or set of procedures as to how your bank or credit union can run these online giveaways, so you make sure you get all of that great engagement, all those awesome likes and comments, and shares, but none of the legal risks like getting sued, having your profile shut down, or running illegal lottery and getting thrown in jail.
Yeah, no one wants that, I know. And look, compliance departments out there, just because there are consequences and penalties doesn’t mean we shouldn’t be running these games. It just means we need to run them lawfully to establish social media compliance for credit unions or social media compliance for banks. But never fear, the social media law firm is here to help.
We have prepared a free guide on how your credit union or bank can comply with financial laws and regulations on social media. Just visit financialfridays.co to download the guide today. That’s not financialfridays.com, we couldn’t afford a domain name, it was like $2,000. But if you visit financialfridays.co, you can download our free guide on how banks and credit unions can manage social media legal risks, and you can do it right now. And if you can use help putting in place what your bank or credit needs to manage risks and be compliant on social media, just reach out to us below.
