ANCHORAGE - Alaska consumers will be seeing less confusing sweepstakes claims from Publishers Clearing House under the terms of a multistate settlement.
Attorney General Bruce Botelho said Tuesday that Alaska and 23 other states and the District of Columbia have settled with the company, which sells magazine subscriptions and collectibles by mail.
The case alleges that the mail solicitor deceived customers by sending out sweepstakes promotional materials encouraging entrants to make purchases.
The settlement requires Publishers Clearing House to pay over $18 million to a restitution fund that will be given customers who purchased orders totaling $2,500 or more over a three-year period, Botelho said.
The settlement also requires Publishers Clearing House to plainly indicate that consumers are not already sweepstakes winners in sweepstakes solicitations.
Publishers Clearing House is known for its mailings, which say "You are a winner!" and contain what appear to be checks for large amounts.
Consumers never have been required to make purchases to win one of the company's giveaways or to improve their chances of doing so.
But the pact with the state officials is designed to make that clearer. The company now will be prohibited from using "winner" proclamations, sending simulated checks or requesting information from consumers such as asking when they'll be home that would lead them to believe they had won a prize.
The mailings also must contain a conspicuous "Sweepstakes Fact Box" with information about the odds of winning and the end-date of giveaways, and disclaimers telling consumers that buying something won't help them win.
The Port Washington, N.Y.-based company also agreed to maintain a list of people who do not want to receive its mailings.
and to contact its most active customers by mail and telephone to ensure they understand the promotions and are not under financial duress.
"We believe that this agreement will help put an end to to the horror stories of consumers, especially seniors, buying thousands of dollars in magazine subscriptions that they don't need and can't afford in the mistaken belief it will help them win a grand prize," said Attorney General Eliot Spitzer of New York.
Executives for Publishers Clearing House embraced the agreement even as they defended past practices.
"We believe our mailings have always been clear to our many customers. Nevertheless prolonged litigation is very expensive," PCH senior vice president Bill Low said. "We needed to resolve this matter and we have, going the extra mile by agreeing to pay for consumer restitution and education and by adopting high standards that will make our advertising even clearer for the public."
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