Publishers Clearing House to settle lawsuit out of court


Some Michigan residents may get their hands on a portion of a $34 million, 26-state settlement.
Victims of deceptive marketing practices by Publishers Clearing House in 26 states will find out later this year how much each state will receive for damages.
“Remember some of these people affected pay $400 a month trying to increase their chances of winning,” said Michigan Assistant Attorney General Stewart Freeman.
He said many of the people affected are senior citizens who receive about $1,000 a month.
Freeman said he suspects PCH decided to settle due to pressure from banking institutions and the company’s attorneys.
“This is a classic consumer protection settlement,” Freeman said. “We have produced a model in terms of regulating this industry.”
Christopher L. Irving, Consumer Affairs senior director for PCH said, “Publishers Clearing House will conduct its sweepstakes in complete and full accordance with the terms of this settlement which sets a new high water mark for industry standards.
“Consumers can participate in Publishers Clearing House sweepstakes with total confidence in the honesty and fairness of our promotions and the knowledge that we are committed to doing the right thing for all consumers,” he said.
Freeman said if the attorney generals in all 26 states tried to collect a 100-percent reimbursement, it would have far exceeded the assets of the company.
“We would have destroyed them and we didn’t need to do that,” he said.
“From the very beginning, Attorney General Jennifer Granholm believed it is possible to sell merchandise and use sweepstake technology properly, according to law,” Freeman said. “What they did was successful, but it was deceptive.”
He said tax payers won’t pay a dime for this case. Michigan will get back more than what was spent.
Freeman said $19 million will go toward a reimbursement program for victims.
The states will decide later this year how they plan on dividing up the money for misled consumers.
He couldn’t speculate how much the Michigan government plans on retrieving, but Freeman did say if the state were to solely take on PCH, it would have won about $1.3 million.
The lawsuits alleged PCH of deceptive marketing for its sweepstakes promotions by misleading consumers that the more money spent on merchandise would increase their odds of winning.
According to a press release by PCH, highlights of the settlement, include:

  • Innovative consumer protection programs to identify and remove from the mailing list consumers who may be confused about sweepstakes promotions;
  • Permanent inclusion in all PCH mailings of consumer friendly “Sweepstakes Facts Disclosures” that carry important consumer education messages regarding odds of winning, giveaway end dates and no purchase necessary in a grid display such as the FDA-style nutrition labeling;
  • The use of a single exclusive method of entry for all consumers who wish to enter the sweepstakes;
  • Establishment of a “Special Compliance Counsel” to act as a liaison between the states and PCH on an ongoing basis; and
  • Equal prominence for conditions to winning in statements about winning.

States that participated in the recent settlement include Arkansas, Arizona, Colorado, Connecticut, Delaware, Florida, Iowa, Indiana, Kansas, Kentucky, Massachusetts, Maryland, Maine, Michigan, Minnesota, Missouri, North Carolina, New Jersey, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Wisconsin and West Virginia.
On August 23, PCH will surprise its next big winner with $1 million during a commercial break of the NBC Nightly News with Tom Brokaw.

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