SNOW PROMOTION A NEAR MISSPosted On: Jan. 14, 1996 12:00 AM CST
NEW YORK-If another seven-tenths of an inch of snow had fallen in Central Park on Jan. 10-about the height of a nickel on its edge-insurers for Potamkin Automotive Center would have had to pay out $1 million. Instead, they'll pocket $32,000 and may make the bet again for Super Bowl Sunday.
However, a repeat performance may be stymied as the promotion's compliance with consumer protection laws is questioned.
The car dealership had offered to forfeit lease payments to customers who leased a car between Dec. 22, 1995, and Jan. 2 if more than 4 inches of snow fell in Central Park on Jan. 8 between 10 a.m. and 10 p.m.
Although about 2 feet of snow fell in New York during the blizzard, only 3.3 inches fell during the relevant hours last Monday.
The promotion was insured by coverage placed with Customized World Wide Weather Insurance Agency Inc., in Manhasset, N.Y., and underwritten by Star Insurance Co. in Meadowbank, Mich.
"It was so successful that we are going to repeat the promotion," said Ted Besson, president of Potamkin.
During the first offer, Potamkin leased 104 cars, which will generate lease payments of about $1 million, according to Mr. Besson.
"That's about 20% more than normal. We expect to triple that for the existing promotion because of all the publicity we have had," Mr. Besson said.
The original policy cost $32,000 and offered coverage up to $1 million, said Isaac Poser, risk management consultant for Potamkin.
Plans for a Super Bowl Sunday repeat, though, were dealt a blow last week by a subpoena issued by the city of New York alleging that ads for the promotion violated city consumer protection laws.
The ad suggested that to enter the competition consumers must make a $1,695 deposit on the lease, said Fred Cerullo, New York City consumer affairs commissioner.
A disclaimer saying that no purchase was necessary was in small print and inconspicuous, Mr. Cerullo said.
The promotion may also violate state lottery laws, he said. "Only the official state lottery, religious organizations, and not-for-profits registered with state authorities can run a lottery in which a fee is charged for the chance of winning a prize. Otherwise, the endeavor is no different than an illegal gambling operation," Mr. Cerullo said.
Mr. Cerullo said Potamkin executives are co-operating with the commissioner.
The Super Bowl promotion is scheduled to offer free leases to customers who sign up between Jan. 12 and 22 if more than 4 inches of snow falls in Central Park between 10 a.m. and 10 p.m. on Jan. 28. The final premium will be determined after the promotion ends, depending on the number of leases, Mr. Poser said.