SEATTLE- April 20, 1999 -- Attorney General Christine Gregoire today announced lawsuits have been filed against three of the nation's sweepstakes promoters who allegedly use deceptive marketing tactics to convince people, especially the elderly, they are about to become millionaires.
"These companies have become masters at creating a web of deception," said Gregoire. "The headlines, the words, everything about these mailers are calculated to get people to buy products they wouldn't otherwise buy."
The lawsuits filed in King County Court allege that Publishers Clearinghouse, American Family Publishers and Time Incorporated, owner of Guaranteed and Bonded, all used deceptive tactics to make consumers believe they were a finalist or had won a sweepstakes contest.
Although Publishers Clearinghouse, promoter of the Prize Patrol, is the only company charged with allegedly targeting to the elderly, Gregoire is convinced it is a trend embraced by the entire sweepstakes industry.
"Sweepstakes companies prey on a generation that are very trusting," said Gregoire. "These mailings are so carefully designed to look like official government documents and with convincing personal notes and endorsements by Ed McMahon and Dick Clark it’s difficult for anyone not to believe they're a winner?"
In one year, more than 450 Washington consumers ordered at least $2,500 in merchandise from sweepstakes companies, and ten of those spent over $10,000. Publishers Clearinghouse, which sells magazine subscriptions, collectibles, videos and coins, has stated the number of respondents over the age of 65 who purchase its products is 30 percent, twice the national average.
One Seattle woman in her 70's spent $400 to $500 a month over five years on products purchased from Publishers Clearinghouse and other sweepstakes companies. And a Bellingham woman in her 80's spent half of her Social Security check each month entering sweepstakes.
"Many of these victims are too embarrassed to come forward once they find out they've been duped," said Gregoire. "One California man unable to convince his elderly father he was not a winner, flew with him to Florida to "claim" his prize only to find out it was all in vain."
Each year more and more Washington consumers complain about sweepstakes companies. More than 650 complaints have been received about the three companies being sued. The complaints come from people around the state who have played the sweepstakes and from family members desperate to stop elderly relatives from spending thousands of dollars.
A 78-year-old Spokane woman wrote she was so convinced she had won the big prize she put a welcome sign for the Prize Patrol in her front yard, ordered a cake and was ready to celebrate her great fortune with friends. Like the California man, she too didn't win.
It's not only the elderly that fall for the lure of these sweepstakes come-ons. One South Seattle professional woman in her 50's was surprised to find she had spent $3,400 in one year on magazines and other gifts. She bought because she was convinced it gave her a better chance to win. A Sumner woman in her 60's estimates she spent thousands of dollars before she realized it was all a lie.
According to Gregoire, once people purchase something, they keep getting more and more sweepstakes mailers and empty promises of even greater winnings. Many people are on multiple mailing lists. Based on testimony before a U.S. Senate subcommittee, spokespersons from two of the companies being sued sent out between 122 and 144 separate mailers a year to some individuals.
The companies also allegedly created a false sense of urgency to respond to the sweepstakes; implied that purchasing a product improved the chances of winning; and falsely claimed the sweepstakes were endorsed by the state or federal government.
This is the second action Washington has taken against American Family Publishers, which uses Ed McMahon and Dick Clark as its spokesmen. In March of last year, the company entered an agreement with Washington and 31 other states to pay $1.25 million and stop the use of illegal promotions tactics.
"Consumers believed the headlines promising they were winners and we believed they’d live up to their agreement and stop their deceptive practices," said Gregoire. "They didn't."
Guaranteed and Bonded, sells magazine subscriptions and products for Time, Sports Illustrated and American Express.
These companies started out in the business of selling magazines. "Now they’re in the business of selling sweepstakes, and instead of people being sold the benefits of the magazines, they're sold on being a winner, finalist, or having a better chance to win," said Gregoire.
The use of sweepstakes to help sell magazines today is a common marketing practice, according to Gregoire, but it isn’t acceptable to make people believe they have a better chance of winning if they make a purchase.
The state is asking the court to stop these companies from using deceptive practices, and order them to pay restitution for consumers and civil penalties. The state also is seeking reimbursement for its costs and fees.
Whether you purchase magazines or not, your odds to win are still going to be at least 200 million to one. Gregoire encourages people who receive these sweepstakes mailings to "tear them up and throw them away."
Gregoire also encourages people who fear a vulnerable friend or relative may be caught up in the sweepstakes game to look for these "red flags":
- Stacks of sweepstakes mail proclaiming them a "guaranteed winner" or offering lottery tickets for sale;
- Unusual number of packages on hand containing inexpensive costume jewelry, plastic cameras or wristwatches;
- Lists near the phone detailing out prizes they’ve won;
- Telephone calls offering "fantastic" opportunities to claim prizes or make sure-fire investments.
Once a problem is identified, Gregoire urges people to proceed with caution and follow these tips:
Don’t Lecture. Fraud victims may resist being criticized or humiliated and can easily reject your good advice;
Ask them to compare the actual value of prizes they’ve won with the money they’ve spent;
Remind them the person on the other end of the line, no matter how charming, may be a crook;
Offer to pick up their mail to verify the sweepstakes offers they are receiving; offer to change their phone to a new, unlisted number; and
Report any victimization to the Attorney General’s Office, the nearest postal inspector, or the local police.
To get more information about sweepstakes fraud or to file a complaint with the Attorney General’s office call the special sweepstakes hot line:
(800) 692-5082 or
(800) 551-4636, and
800) 276-9883 for the hearing impaired.
Tips: Beware of the Sweepstakes Game