Iowa AG Office pressures Lithia to honor Dealership Promotion

[XDCX]

A news report indicates the head of the Iowa attorney general’s Consumer Protection Division has “strongly urged” a Johnston car dealership to honor promises made during a popular contest at the Iowa State Fair. Here's a link to the full report - click here

It's alleged that a Lithia Volkswagen Dealership created a promotion where they would give away a 2013 Volkswagen Beetle if someone correctly guessed the number of colored plastic balls that were inside the vehicle. While there was a person who had the correct guess, he entered the contest about 4,000 times with different guesses since the rules (initially) didn't limit the number of entries.

Lithia has agreed to give the winner a free one year lease of the 2013 Beetle but the winner and the State AG's office are pressing for Lithia to honor the original terms of the contest.

While I'm no lawyer, my bet is Lithia will step-up and award the Volkswagen and chalk this up to an expensive lesson. It's hard to fight the State AG and this sounds like a case they'd likely lose in court anyways.

For anyone reading this post, when you plan your own promotions keep this case in mind and double-check your promotion to ensure someone cannot "game" the system and win the prize.

[chryslersrt8]

I have a friend who won a Moony airplane a number of years ago by overloading the ballot. The rules changed after that. He flew the plane once or twice then sold it because of the tax bill. He still made out.

[XDCX]

Originally Posted by chryslersrt8

I have a friend who won a Moony airplane a number of years ago by overloading the ballot. The rules changed after that. He flew the plane once or twice then sold it because of the tax bill. He still made out.

Wow, that's a pretty high-end prize to win for overloading the entry box.

[chryslersrt8]

He spent about $2000 on entries including cost of postage. Yeah pretty good ROI

[mr4t60e]

I was under the impression that dealers could purchase insurance against any losses resulting from these contests. At one point a dealership I worked for was offering a poverty-spec Cobalt to a person who could make a basket from mid-court facing backwards. The insurance company was very closely involved with all involved parties to make sure the odds were tilted in their favor.

[XDCX]

Originally Posted by mr4t60e

I was under the impression that dealers could purchase insurance against any losses resulting from these contests. At one point a dealership I worked for was offering a poverty-spec Cobalt to a person who could make a basket from mid-court facing backwards. The insurance company was very closely involved with all involved parties to make sure the odds were tilted in their favor.

You're correct, a dealer can definitely buy insurance that will pay if a contest is won based on skill (hole in one, basketball shot, etc.) or based on easily calculated odds (amount of rain on a certain day, temperature, etc.) but I don't think they'd write an insurance policy in a contest where it's easy to cheat.

In the case of the plastic balls inside a Volkswagen, there'd be no way for the insurance provider to know that an "insider" didn't provide the winning answer for a kickback.

I could be wrong, but I'm betting that Lithia "self-insured" this contest and they're on the hook for paying the award.