Q. Online sweepstakes and contests are becoming more popular with retailers who are looking to increase their online presence. Recently, Taco Bell found itself in hot water after the web portal for their “Unlock the Box” sweepstakes was infiltrated by hackers. What are some lessons learned for businesses looking to host online sweepstakes?

by Joe Chase on April 26, 2012

Hackers infiltrated Taco Bell’s sweepstakes system, causing it to recognize nonwinning entrants’ codes as winners, meaning that the holders of these codes were initially notified that they had won. As a result, Taco Bell then had to notify more than 300 participants that they had not won a new PlayStation Vita.

This resulted in some very disgruntled folks who, in turn, vented their frustration and disappointment about Taco Bell to the press, on blogs and via social media outlets.

Here are some measures to consider when launching an online sweepstakes to avoid problems similar to those Taco Bell faced:

1. Include language in sweepstakes rules to deter hackers, including language reminding hackers of potential civil and criminal liability
2. Include provisions in sweepstakes rules that anticipate technical issues, including hacking, such as, “Company…at its sole discretion….may modify, cancel, terminate or suspend this sweepstakes…”
3. Consult with a technology specialist to confirm that necessary anti-hacking measures are in place
4. Consult legal counsel because sweepstakes law is complicated and varies from state to state

As a result of the recent sweepstakes breach, Taco Bell launched a second-chance drawing, giving the misinformed ”winners” a second chance to win a game console. 

Read related news:

• Gunster blog post by Joe Chase: Taco Bell hacking incident reminds companies to carefully draft sweepstakes rules
• Taco Bell blames Vita contest debacle on ‘technical issues,’ enrages misled winners (Kotaku.com)

This post is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this information.