Consumers Confused About Proposed Sweepstakes Settlement

Seattle - The Attorney General’s Office today urged consumers to consider carefully whether to accept or opt out of a proposed settlement for a private class action lawsuit with Publishers Clearinghouse (PCH). Consumers who do not opt out are automatically covered by the terms of the settlement.   

"What’s being mailed out appears very confusing," said Assistant Attorney General Regina Cullen. "It uses a lot of big legal words and very small print."

This proposed settlement has no relationship to the consumer action taken by Washington State and other state Attorneys General against PCH earlier this year. 

The mailing sent out by PCH nationwide this week is part of a private lawsuit that was filed against PCH and removed to federal district court in East Saint Louis, Illinois. The proposed private class action settlement was reached with private attorneys who represent a group of consumers who received mail or purchased merchandise from the sweepstakes company between 1992 and 1999.

"It’s important to look at the numbers and do the math, "said Cullen. "This is a $10 million settlement, but attorneys fees and other costs take away almost $ 6 million of that amount."
Only $4 million is potentially available to consumer victims. Consumers spent more than $1 billion with PCH for magazines and merchandize during the time covered by the settlement.

Cullen is also concerned that PCH may argue that consumers who do accept even a partial refund under this settlement may not be able to receive restitution from other actions, including Washington’s.

Washington filed suit against PCH in April, alleging that PCH, the promoter of the Prize Patrol, used deceptive marketing tactics to convince people, especially the elderly, they were about to become millionaires. The lawsuit contends the headlines and words used in the mailers were calculated to get people to buy products they wouldn’t otherwise buy. The state seeks restitution on behalf of its consumers and an end to PCH’s deceptive practices.

Consumers who want to "opt out" of this class action settlement may request a form to use from the AG’s office. This form must be completely filled out and returned to the class action attorneys by Oct. 18. Each eligible consumer must make his or her own decision to opt out of the private class action settlement. The AG’s office cannot provide private legal advice.

To request a form call the AG’s Consumer Resource Center at 1-800-551-4636.

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