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FOR IMMEDIATE RELEASE
August 24, 2000
More settlements reached in sweepstakes lawsuits


SEATTLE - August 24, 2000 - Washington State Attorney General Christine Gregoire today announced the last of a series of four settlements with the nation’s leading sweepstakes firms.

"With these four settlements we have achieved our goal of changing industry-wide practices to ensure they are fair and truthful to our consumers, especially our senior citizens," said Washington Attorney General Christine Gregoire.

"These lawsuits were filed to make sweepstakes companies abide by laws which require consumers to be treated with fair play and truth," Gregoire said. "This isn’t about legal sweepstakes. This is about violations of our consumer protection laws," she added.

The announcement of the settlement with Time, Inc., which runs a sweepstakes known as Guaranteed and Bonded, comes just two days after Washington, 22 other states, and the District of Columbia settled lawsuits with the nation’s largest sweepstakes operator, Publishers Clearing House.

Like the Publishers Clearing House settlement, the Time, Inc., agreement requires the firm to provide clear and conspicuous "Sweepstakes Facts" in contest entry forms. The facts include the odds of winning, and clearly state a person’s chances of winning will not be increased by making a purchase.

The agreement also requires Time to:

  • Offer a standard means of entering sweepstakes;
  • Refrain from claiming consumers received sweepstakes offers because they are 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.

With the Time settlement, the terms of a June agreement with American Family Enterprises also become final. AFE is owned by TAF Holdings, a wholly owned subsidiary of Time, Inc.

In the settlement, AFE and Time have agreed to pay $745,000 restitution to Washington State residents. AFE will pay $600,000, while Time will pay $145,000. Both firms will each pay Washington State court costs and attorneys fees – AFE will pay $200,000 and Time will pay $178,000. Nationally the total restitution to be paid by Time is $4.9 million, and the total costs and fees to all of the states is $3.2 million.

The nearly 200 Washington consumers eligible for restitution under the Time settlement will be notified by mail and should receive restitution checks of between $500 and $2,000 within the next 90 days. Washington residents who think they may be eligible for restitution under the AFE settlement should call 1-800-551-4636 for further information.

Washington originally filed its lawsuit against Time, Inc., in King County Superior Court in April 1999. A total of 48 states and the District of Columbia are settling with Time, Inc. The settlement with American Family Enterprises, which also was filed in April 1999, was tentatively formalized in papers filed on June 7, but its exact terms weren’t established until the Time settlement was reached.

In addition changing sweepstakes’ conduct in the future, the settlements of the four sweepstakes lawsuits, including the settlement last April with United States Purchasing Exchange, achieved almost $2.2 million in restitution for Washington consumers.

For an electronic version of this release, visit the Attorney General’s webpage at http://www.atg.wa.gov.

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