Publishers Clearing House reaches $3.5M settlement

Keith Loria Sep. 9, 2010, 2:14pm


DENVER (Legal Newsline) - Colorado Attorney General John Suthers announced on Thursday that his state will receive $320,000 as part of a $3.5 million multistate settlement with Publishers Clearing House for allegedly violating a 2001 consent decree.

In the original agreement, Publishers Clearing House agreed to a $34 million settlement over allegations that it had used sweepstakes hype to try to show that buying something from the company would improve one's chances of winning a grand prize.

The consent decree barred Publishers Clearing House from using false and deceptive trade practices to entice consumers to participate in its sweepstakes, but the company allegedly continued these practices.

Since the 2001 agreement, Suthers has monitored the company's actions and, along with other state attorneys general, noticed that its solicitation practices didn't change much, he says. The attorneys general informed Publishers Clearing House that its new tactics appeared in violation of the settlement.

Under the new agreement, Publishers Clearing House has agreed to alter the language it uses in its mailings that allegedly insinuates those who purchase more are more likely to win prizes.

The company also must stop informing recipients that they have special "key codes" for the winning entry and they must stop sending the communication from a "Board of Judges."

Furthermore, Publishers Clearing House must retain the services of an ombudsman to review the company's solicitations each quarter as part of the settlement.

More News