PCH Blind-sided by Latest Lawsuits

Posted on by Chief Marketer Staff

PUBLISHERS Clearing House has been slapped with two new lawsuits over the wording of its sweepstakes offers. Both came as a shock.

In February, Indiana Attorney General Jeffrey Modisett sued the stampsheet mailer, charging that it violated the state’s Promotional Gifts and Contests Act.

The suit, on file in Marion County Superior Court, alleges that PCH failed to tell recipients of four mailings about their odds of winning its multimillion-dollar sweepstakes. Modisett is asking the court to fine PCH $500 for each alleged offense.

In January, Wisconsin Attorney General James Doyle sued PCH, saying it falsely indicated to mail recipients that they had either won or would win a large cash prize.

The complaint, filed at Columbia County Circuit Court, Madison, charges the company with falsely indicating to consumers that they could improve their chances of winning by purchasing its merchandise, and that PCH’s sweepstakes promotions are “endorsed, ratified or legalized by the state of Wisconsin and the United States government.”

In announcing the suit, Doyle said that a 79-year-old Wisconsin man spent $10,000 at PCH without winning a prize.

(In a separate development, PCH announced it would reimburse an elderly Florida man who unsuccessfully spent $6,000 trying to win one of the company’s sweepstakes. The firm will supply Joffee Leggett with postage-paid labels for use in returning merchandise he bought, and will issue a full refund when the items are returned.)

The filings came as a shock to PCH, which asserts that its “mailings are in full compliance with the laws” of both states, says Christopher Irving, a spokesman for the company.

PCH also has complied with terms of a voluntary 1994 agreement with 14 states, including Indiana and Wisconsin, Irving claims.

Moreover, PCH has been working on the sweepstakes issue with numerous state attorneys general, including Doyle and Modisett, and believed those discussions were “moving in a very positive direction. [There was] no indication that either felt otherwise,” Irving notes.

Forced to Take Legal Action Modisett disagrees. After nearly a year of talks with PCH he “reached the conclusion that there is not going to be sufficient change of a voluntary nature [and] the only tools that are left to us are lawsuits,” he said in a statement last month.

At deadline, Modisett was slated to chair a hearing with nine other attorneys general on sweepstakes promotion practices.

Scheduled witnesses include representatives of the Direct Marketing Association, Promotion Marketing Association, Magazine Publishers Association and several alleged victims of misleading sweepstakes promotions.

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