Publishers Clearing House Sued Over Deceptive Sweepstakes

Attorney General Spitzer today announced that he has filed a lawsuit against a major sweepstakes company over promotions that deceive thousands of Americans each year.

Publishers Clearing House (PCH) of Port Washington, New York, sells magazine subscriptions and other merchandise through direct mail solicitations sent to millions of American households nationally and throughout New York State.

PCH is accused of engaging in a pattern of deceptive tactics aimed at inducing recipients to believe that they are actual winners or to induce them to make purchases in order to enhance their chances of winning. Although the actual odds of winning its sweepstakes are generally no better than one in 50 million, PCH's envelopes and mailings use bold graphics and colors and print sizes to emphasize phrases such as "guaranteed winners" and "specially selected" and then bury certain disclaimers in small print.

"This sweepstakes company has engaged in an elaborate scheme to increase its bottom-line, financed on the backs of some of those least able to afford it -- the elderly," Spitzer said. "My office intends to vigorously fight to protect and vindicate the many consumers misled by the deceptive sweepstakes mailings and to substantially and permanently change the way all companies engage in prize award offers."

Spitzer alleges that PCH inundates some recipients with as many as 150 mailings per year. It is alleged that the solicitations are designed to confuse the offer of magazine subscriptions and merchandise with a chance to win a sweepstakes.

Specifically, Spitzer alleges that PCH solicitations include a variety of tactics that deceive consumers into believing they have won a prize including:

  • Using simulated internal memoranda, personal letters, greeting cards, photographs, handwritten notes to enhance the belief that a consumer needs to act quickly to receive their prize;
  • Using simulated official and governmental documents to trick consumers into believing the sweepstakes involves a federal or state agency or creates a false impression of urgency and importance;
  • Utilizing envelopes with official-looking emblems and large, bold print warnings and statements to disguise millions of identical "bulk-rate" mailings;
  • Sending official looking documents to require consumers to provide information or give authorizations and approvals that would only be necessary if the consumer had actually won a prize;
  • Using simplified forms and reply envelopes to enter sweepstakes for consumers placing orders compared to the more complex forms for consumers entering without ordering; and
  • Requesting information from consumers placing orders that it does not request from consumers who do not order.
Spitzer's lawsuit requests that the court permanently bar PCH from its deceptive and unlawful sweepstakes and prize promotions and award the state full restitution for all consumers harmed by its sweepstakes. The suit also seeks civil penalties for violations of the deceptive acts statute and the state Prize Award Scheme Law, as well as an additional $10,000 for violations of a State law enacted to penalize frauds perpetrated against the elderly, and to pay the costs of the investigation.

This lawsuit stems from a lengthy multi-state investigation of the sweepstakes industry in which New York State took an aggressive lead role.

Individuals who believe they have been harmed by Publishers Clearing House sweepstakes are encouraged to contact the Attorney General's consumer help line at (800) 771-7755.

This case is being handled by Assistant Attorneys General Shirley Stark and Melissa Saren of the Consumer Frauds and Protection Bureau.


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