SEATTLE - Aug. 22, 2000 - Washington state Attorney General Christine Gregoire today announced the settlement of a lawsuit against the nation’s largest sweepstakes operator, Publisher's Clearinghouse.
It is the latest in a series of settlements aimed at ending deceptive sales practices that Gregoire contends target the elderly.
"One by one, we have made sure that sweepstakes companies that use misleading tactics to lure hopeful – and often elderly – people into their web will start playing fair by stating clearly what chances people really have to strike it rich," Gregoire said. "Hopefully, the settlement we’ve reached today will bring an end to a practice that has left too many citizens nearly penniless and their families devastated."
The case against Publisher’s Clearinghouse is just one of a number of cases filed against sweepstakes companies by Gregoire’s office since last year. Other cases include ones against United States Sales Corp.; which does business as United States Purchasing Exchange (USPE), Time, Inc., which runs the Guaranteed & Bonded sweepstakes; and American Family Enterprises.
The state reached settlement with USPE last April and with AFE last June.
"Each year, thousands of people have been taken in by these promotions and tricked into thinking they have a decent chance of winning millions of dollars," Gregoire said. "Their exciting pitches of imminent wealth convince some people to buy goods they don’t want and don’t need in the hope it will better their chances of being the next grand prize winner.
Nationwide, PCH will pay $18.3 million in restitution and $5 million in fees. In Washington, it will pay $150,000 in fees. Washington’s share of the restitution is still being determined.
The settlements with PCH and other sweepstakes companies require them to provide clear and conspicuous "Sweepstakes Facts" in contest entry forms. The facts state a person’s odds of winning, and a clear statement that a person’s odds will not be improved by making a purchase.
The agreements also require the sweepstakes firms to:
- Not misrepresent that a person has won , or is close to winning;
- Offer a standard means of entering sweepstakes for free;
- Refrain from claiming that consumers received sweepstakes offers because they were customers or that they may receive additional sweepstakes offers if they remain customers;
- Refrain from using personalized, simulated checks to represent sweepstakes prizes;
- Fully disclose the nature and value of bonus items offered to purchasers;
- Maintain a toll-free telephone number for consumers to call if they wish to be placed on the company's "Do Not Contact" list and not receive any future solicitations; and
- Remove persons who buy merchandise at unusually high levels.
"When we settled with USPE, I said I’d hoped that would be a blueprint for settling other outstanding cases. I couldn’t be any more pleased with our efforts to clean up an industry sorely in need of cleaning up."
A total of 24 states are settling with Publishers Clearinghouse.
"Washington has been at the forefront of bringing sweepstakes companies to heel. We will continue to protect vulnerable citizens who are confused and misled by deceptive sweepstakes schemes," Gregoire said.