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September 17, 2002
Company Agrees to Pay State and Clarify Rules in Puzzle Contest

SEATTLE - A Missouri company that misled Washington consumers, many of them elderly, into believing they could win big prizes by solving easy puzzles has agreed to offer refunds to consumers and pay the state nearly $50,000 in costs and attorneys fees.
In a consent decree filed today in King County Superior Court, Contest America Publishers agreed to take steps to ensure that consumers who enter its contests understand the rules, including a requirement that they pay additional fees to solve "tie-breaker" puzzles that keep them in the running for valuable prizes.

Attorneys estimate that nearly 860 people from the nine states involved in the case could be eligible to apply for refunds. Ninety-seven of those are Washington residents.

According to a civil complaint filed simultaneously with the consent decree, the Attorney General's Consumer Protection Division accused the company of misleading consumers in its contest promotions.

Consumers, the complaint alleged, were usually solicited first through mailings that said "YOU ARE THE GRAND PRIZE WINNER," "GRAND PRIZE ELIGIBILITY: CONFIRMED" or "GUARENTEED CASH RELEASE OF $10,000."

What the mailings didn't disclose was that contestants had to solve increasingly difficult word and math puzzles and that additional entry fees and "bonus fees" were required at each new level.

While entry-level games were easy, puzzles in subsequent tiebreaker rounds were "significantly more difficult, and virtually impossible for the vast majority of contestants to answer accurately in order to qualify for a prize," the complaint alleged.

"This company made winning sound as easy as adding one plus one," Attorney General Christine Gregoire said. "But consumers didn't know that the real math problem was about subtracting dollars from their pocketbooks."

In the settlement, the company will no longer suggest that there is an element of luck involved in the game, will discourage multiple identical entries from individuals and will make it clear that contestants will be required to pay an additional fee to play "tie-breaker" rounds.

Also, the company will be prohibited from soliciting certain "high risk" persons - those who have paid $1,500 in entry fees in a year, or $3,500 in their lifetime, or those whose records of success are such that it appears they have little or no chance of ever winning.

The company also will be required to provide a "clear and conspicuous" statement of the contest rules, including:

  • information on the number of rounds involved;
  • the date by which a winner will be determined;
  • a complete listing of fees involved;
  • an illustrative final round puzzle sample; and
  • the estimated number of contestants.



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