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New York Fines CVS for Sweepstakes Violations

October 17, 2006

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The CVS Corporation has agreed to pay $152,000 in civil penalties after violating a previous settlement with New York authorities related to sweepstakes offers.

The drug chain settled allegations that its sweepstakes failed to provide an in-store method of entering the sweepstakes for consumers who did not make a purchase.

CVS, based in Woonsocket, Rhode Island, conducted a recent sweepstakes offering customers a chance to win a $1,000 CVS/pharmacy Gift Card every week during NASCAR racing season. Consumers who visited a CVS store and purchased Nicorette, NicoDerm or Commit, using their CVS ExtraCare Card were automatically entered in the sweepstakes.

However, CVS did not make entry forms available at all its stores for consumers who did not purchase these products and did not inform shoppers how to enter the sweepstakes without a purchase.

"State law requires that consumers, regardless of whether they make a purchase, should have equal access and opportunity to enter and win sweepstake offers," New York Attorney General Eliot Spitzer said.

The settlement with CVS follows a prior settlement in June 2004 in which CVS agreed to resolve similar allegations related to its "Trip of a Lifetime" sweepstakes with the grand prize trip to Oahu, Hawaii.

The current settle requires CVS to make additional changes to the way it conducts sweepstakes to prevent future violations. In addition to the reforms required by the 2004 settlement, including making entry forms available at participating retail locations, conspicuously posting sweepstakes rules, and ensuring staff knows how to direct consumers to non-purchase methods of entry, CVS will:

• Institute a continuing training and compliance program for management and other personnel regarding the placement of signs and entry forms in CVS stores during a sweepstakes promotion period;

• Adopt procedures to assure that signs and entry forms are properly displayed throughout the sweepstakes promotion period;

• Provide a copy of the settlement document to all sponsors when it engages in any game, contest, sweepstakes or promotion; and

• Provide a copy of the settlement document to all advertising staff to assure that all advertising used in connection with any game, contest, sweepstakes or promotion sets forth with equal prominence an alternate non-purchase method of entry.

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