A Senate committee investigation says Publishers Clearing House may be misleading consumers by sending out sweepstakes solicitations that “push the limits” of federal law and legal settlements between the company and dozens of states.
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In a report (pdf) “Pushing the Envelope: Publishers Clearing House in the New Era of Direct Marketing,” the Senate Special Committee on Aging says its investigation raises questions about whether the company's solicitation is continuing to mislead consumers into believing they have won or are close to winning prizes or that buying products or subscriptions will increase their chances of winning.
“I’m all for folks winning prizes but it concerns me when seniors still report they’re being misled by Publishers Clearing House,” said a statement by the committee’s chairman, Sen. Bill Nelson (D-Fla.). “If people are concluding that they have to buy something to enter or win the sweepstakes, then we need to make sure that gets corrected.”
In 2000, PCH agreed to pay more than $18 million to settle similar accusations by 23 states and the District of Columbia. A year later, it reached another settlement with 26 states, paying another $34 million and issuing an apology. And yet again, in 2010, the company paid $3.5 million to settle assertions from 33 states and the District of Columbia that it violated its earlier agreements. In none of the cases did PCH acknowledge wrongdoing.
Continued misleading solicitations would not only violate those agreements but also the federal Deceptive Mail Prevention and Enforcement Act. The report also says that the law may need to be updated to cover e-mail and online communications.
The Port Washington, N.Y.-based Publishers Clearing House uses mail and online sweepstakes promotions in the sale of magazine subscriptions and household products, such as books, CDs and DVDs, clothing, cookware, and jewelry. In our recent check of the company's website, we found a sweepstakes promotion inviting visitors to enter to win $7,000 a week for life.
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For more on sweepstakes fraud, read: "Gotcha! You Have (Not) Won $2 million!"
Among the evidence that the company is misleading consumers to beleive that they already have won a prize or that ordering will increase their chances, the investigation points to:
- Solicitations that incorporated maps of the recipient’s neighborhood, along with a statement that a prize is “approved for delivery.
- Letters accompanied by “Stay Rich Tips for New Winners” inserts that tell recipients to “buy and spend smart” and to “contact a reputable accountant or financial advisor.”
- Sweepstakes entry envelopes that included detachable notices that read: “OOPS! Did you forget to place an order?”
The report mentions an elderly Pennsylvania man who it said spent more than $2,600 on PCH merchandise over a two-year period, believing it would increase his odds of winning. He was so sure he had won, the report said, that he asked his son to be on hand for the giveaway.
Chris Irving, the company's assistant vice president for consumer affairs, said PCH cooperated with the committee's investigators and still is studying the report.
"Our promotions we believe are in full compliance with the law and with our agreements with the states," he said.
He all of the company's mail and online promotions include notices that no purchase is necessary and that a purchase will not increase someone's odds of winning. He said that of the tens of thousands of consumers who enter the PCH sweepstakes each day, those who don't buy merchandise or magazine subscriptions outnumber those who do by 36 times. He said the majority of the million dollar winners since 1967 did not order anything.
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