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Can I offer contests that involve referral bonuses in South Carolina? What are the requirements?

Requirements for Offering Contests with Referral Bonuses in South Carolina

Based on the context documents, it is possible to offer contests that involve referral bonuses in South Carolina, as long as they comply with the provisions of the law.

Savings Promotion Contests

The relevant law is the Savings Promotion Contests Act, found in SCCL 34-45-30 to 34-45-50. According to SCCL 34-45-30, a financial institution authorized to do business in South Carolina may conduct a savings promotion contest for the purposes of encouraging its depositors to maintain savings accounts and to increase personal savings.

SCCL 34-45-40 sets out the conditions for conducting a savings promotion contest, which include compliance with all applicable consumer protection laws, not requiring any depositor or other individual to pay a consideration for a chance of winning a prize, and not conducting the contest in a manner that jeopardizes the safety or soundness of the financial institution or misleads its depositors.

Therefore, if the referral bonus contest is conducted by a financial institution authorized to do business in South Carolina, complies with all applicable consumer protection laws, does not require any payment for consideration, and does not jeopardize the safety or soundness of the financial institution or mislead its depositors, it would be permissible under South Carolina law.

Lotteries and Raffles

It is important to note that lotteries or raffles of any type whatsoever are unlawful in South Carolina unless authorized by specific laws [SCCL 33-57-100]. Nonprofit organizations are allowed to operate up to four raffles per year, subject to certain conditions [SCCL 33-57-130]. However, the restriction on the number of raffles does not apply to raffles held by nonprofit organizations that are exempt pursuant to Section 33-57-120(B)(2).

Construction of Savings Promotion Contest

It is also important to note that a savings promotion contest offered in accordance with the Savings Promotion Contests Act is not nor does it promote unlawful gambling or an unlawful lottery or raffle [SCCL 34-45-60].

Therefore, if the referral bonus contest is not a lottery or raffle, and is conducted by a financial institution authorized to do business in South Carolina, complies with all applicable consumer protection laws, does not require any payment for consideration, and does not jeopardize the safety or soundness of the financial institution or mislead its depositors, it would be permissible under South Carolina law.

However, it is recommended that you consult with a licensed attorney in South Carolina to ensure compliance with all relevant laws and regulations.

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Source(s):
Jurisdiction

South Carolina