The Deceptive Mail Prevention and Enforcement Act, which imposes tough new government regulations on sweepstakes mailers, was signed into law last month by President Clinton. Christopher Irving, consumer affairs director for Publishers Clearing House, said the law will “help restore consumer confidence in sweepstakes promotions and paint a bright-line distinction between legitimate promotions and out-and-out criminal scam artists.” When the law goes into effect April 13, sweepstakes operators will be required to clearly state in their direct mail promotional materials that no purchase is necessary to win, and that buying magazine subscriptions or other merchandise will not improve a person’s chance of winning. Mailers also will be prohibited from stating on the envelope and in the accompanying materials that the recipient is a winner unless he or she has actually won a prize. Also prohibited are use of facsimile checks as well as any implication that programs are affiliated wi! th or endorsed by the government . In a related development, Publishers Clearing House eliminated 213 staff positions – 27% of the company’s work force – in the wake of negative publicity over sweepstakes. “Because of the prolonged attacks on direct mail sweepstakes we are experiencing lower sales,” said Robin Smith, PCH’s chief executive officer, in a statement. “And although we are pleased to have obtained preliminary approval for a nationwide class-action settlement and expect to reach a settlement in the near future that will resolve the current multistate investigation into our sweepstakes marketing practices, the anticipated cost of these settlements will be large. It is therefore necessary for us to reduce our overhead while we rebuild the business, in order to maintain our balance-sheet strength and excellent credit rating.”
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