Sweepstakes giant agrees to clearer warnings to consumers
SEATTLE – If dreams of instant riches have you buying stacks of magazines in the hope that Prize Patrol will soon knock on your door, you may be disheartened to know that the only thing you’ve gained over other prize contestants is some reading material. Joining with his colleagues across the country, Washington State Attorney General Rob McKenna today announced a new agreement with a company famous for its sweepstakes promotions, Publishers Clearinghouse.
“Consumers are won over by shiny envelopes with irresistible announcements that they might already be winners,” McKenna said. “Among other consumer protections, today’s agreement requires Publishers Clearing House to make it clear that signing up for magazine subscriptions won’t increase your chances of winning.”
In fact, the estimated odds of winning a $10 million prize in the latest Publishers Clearing House giveaway are 1 in 1.75 billion whether or not you buy anything.
McKenna added that the settlement strengthens previous agreements with the direct marketing firm aimed to prevent consumers from being misled or confused by sweepstakes promotions.
Publishers Clearing House, of Port Washington, NY, agreed to modify the terms of a prior judgment filed in 2000. Earlier settlements with the company were designed to resolve allegations that it engaged in deceptive marketing practices. Those practices included promotional materials designed to mislead consumers into believing that purchases would increase their odds of winning.
A recent investigation by the states raised concerns that Publishers Clearing House was not fully complying with prior agreements and that consumers could still be confused by the nature and language of some of the company’s sweepstakes mailings.
The new settlement includes stronger language and new conditions to help ensure that consumers receive appropriate warnings. Publishers Clearing House will contact customers, including seniors, who spend significant amounts on magazine orders. Those customers will be better educated about how the sweepstakes actually work.
Customers who spent $1,000 or more in any calendar year will receive a letter alerting them that, “In fact, the majority of Publishers Clearing House winners did not submit an order with their winning entry.”
The company also agrees to pay $3.5 million to cover the cost of the states’ investigation.
Attorneys general for the following states and the District of Columbia participated in the settlement: Alaska, Arizona, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia and Wisconsin.
Publishers Clearing House 2010 Supplemental Consent Decree
Publishers Clearing House 2000 Consent Decree
Media Contact: Kristin Alexander, AGO Media Relations Manager, (206) 464-6432, firstname.lastname@example.org