American Family Publishers is prohibited from using deceptive language in its mailings to Connecticut and Iowa consumers as part of a settlement the sweepstakes giant reached last week with both states.
Terms of the settlement also include $250,000 in restitution to Iowa for its consumers and $216,000 to Connecticut. The settlements follow months of legal negotiations in which the company has reached voluntary agreements with dozens of other states.
According to a statement released last week by Attorney General Richard Blumenthal, AFP is required by court order to stop using solicitations containing large, bold headlines that imply the recipient has won the grand prize and that all “winner statements” may be used only if they do not contradict and are in the same font and typeface as statements that follow.
In addition, the odds of winning, information about refunds and other relevant information must be displayed in prominent typeface, size, color and placement.
The Iowa settlement, also released last week by Attorney General Tom Miller, includes barring AFP from using claims that a person has won a prize, has a higher chance to win or is close to winning. It also bars the sweeps mailer from representing that a purchase is necessary or helpful to win a prize.
Both states prohibit the use of the word “finalist” unless the recipient is, in fact, a finalist.
AFP released a statement stating that it admits no wrongdoing. The company said that the settlement has enabled it to avoid extensive litigation allowing it instead to focus on the launch of a variety of new businesses.
“This sweepstakes scheme was slick and deceptive and purposely designed so consumers were led to believe they needed to buy magazine subscriptions and merchandise they otherwise might not want, solely in hopes of improving their chances of winning the promised jackpot,” Blumenthal said. “If a company relies on lies and deceit for its profits, it deserves to go into bankruptcy, as AFP has done.”
AFP filed for Chapter 11-bankruptcy protection last October.
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