Attorney General's News Release

October 15, 1999

Nixon to sue Publishers Clearing House for mailing deceptive sweepstakes promotions to Missourians

Jefferson City, Mo. — Attorney General Jay Nixon filed a lawsuit in Boone County Circuit Court today against sweepstakes giant Publishers Clearing House, alleging the company used deceptive sweepstakes mailings to defraud Missouri consumers of millions of dollars and then aggressively targeted consumers who had already been misled.

The lawsuit is being filed as an Oct. 18 deadline nears for consumers to file a claim or opt out of a proposed class action settlement with Publishers Clearing House (PCH). Nixon said the class action settlement does not resolve his concerns with the company's underlying business practices.

"Hundreds of Missourians have spent thousands of dollars apiece with PCH and have been solicited repeatedly by the company with marketing pieces that are deceptive, particularly to those consumers who are most vulnerable," Nixon said. "The proposed class action settlement notice sent to consumers was too legalistic, the settlement placed too many requirements on consumers, and the national settlement fund is inadequate to address consumer losses. The Prize Patrol is delivering a bill of goods with this proposed settlement, not a winner."

Nixon said PCH sent numerous sweepstakes promotions that misled consumers to believe they were more likely to win a prize then they actually were and that making a purchase would increase their likelihood of winning. Missouri law makes it illegal to give any advantage in a game of chance based on a payment.

According to Nixon, PCH used numerous tactics to make consumers believe they were likely to win large prizes, including mailings telling consumers they were "guaranteed cash winners," when in reality what they were guaranteed to receive was no more than $1. The company also often requested information that would be needed only from a winner, such as approvals by consumers of news releases announcing their winning.

"Publishers Clearing House has used almost every trick in the book to deceive consumers into believing that they are or are likely to be the next multi-million dollar winner, if they make a purchase," Nixon said.

Nixon is asking the court to issue an injunction prohibiting PCH from sending deceptive mailings to Missourians. He also is seeking restitution for Missourians who have been defrauded by the company, as well as any appropriate penalties and costs.

In many of its mailings, PCH used words, phrases and fictitious conversations to lead consumers to believe the high-ranking employees of PCH had a personal interest in them and would make special efforts to help them win.

One solicitation, purportedly sent only to the top 3 percent of PCH customers, stated the company "loved" the consumer because they make purchases and enter the company's sweepstakes "religiously and never lose the faith," and that they "deserve to win."

This type of personalization leads consumers to believe they are in a preferred group and are more likely to win than they actually are, Nixon said. The Attorney General also said PCH used numerous tactics to lead consumers to believe that their chances of winning would be enhanced if they made a purchase.

The company often alluded that a purchase would increase the chance of winning by linking consumers' status as previous customers to their eligibility for sweepstakes or by offering to "upgrade" consumer's "ratings" if they made a purchase.

Nixon said one of the most prevalent ways PCH linked purchases to the consumers' chances of winning was by using different entry methods for purchasers and non-purchasers. Consumers who made a purchase were able to use the "official" entry forms. Consumers not making a purchase were directed to fill out a postcard and then mail the postcard to a different address than that to which the "official" forms were mailed.

"It is easy to see how using a slick, high-end entry for buyers and a simple, handwritten postcard for non-buyers would lead consumers to believe they needed to buy something to avoid sending in a second-class entry," Nixon said.

Nixon said that PCH also aggressively re-solicited consumers who already believed that making a purchase would enhance their chance of winning or who did not understand the company's mailing. PCH selected consumers to re-solicit based on whether the consumer made purchases or responded to earlier mailings. The more often a consumer made purchases, the more mailings he or she received.

"Publishers Clearing House clearly has been preying on those most susceptible to its deceptive mailings, often sending these friends' more than one solicitation a week," Nixon said. "Missouri consumers collectively have spent millions responding to sweepstake solicitations. Missourians must not be led to believe they must spend money to enter contests that are supposed to be free."

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818