Florida Attorney General Bob Butterworth, dissatisfied with the terms that ended a federal class-action lawsuit against Publishers Clearing House, filed a suit for $40 million against the sweepstakes operator Wednesday.
The move caught PCH, which faces similar suits by Indiana Attorney General Jeffrey Modisett (and Wisconsin Attorney General James Doyle, by surprise, according to spokesperson Chris Irving. He told DIRECT Newsline that the Port Washington, NY, company had been negotiating an agreement with Butterworth’s office that would have resolved many of his complaints plus “impose unique, meaningful standards for the industry.”
Last week, according to Irving, PCH asked Butterworth for a face-to-face meeting on the issue “but we did not hear back from him.”
Butterworth’s suit, filed in Pinellas County Circuit Court, Tampa, seeks $20 million in punitive damages and $20 million for refunds to Floridians, and accuses the stampsheet magazine subscription mailer with violating the state’s Deceptive and Unfair Trade Practices Act.
Specifically, it alleges that PCH, which last month agreed to offer millions of dollars in refunds to sweepstakes participants in the federal lawsuit, used “a variety of deceptive tactics” to sell magazine subscriptions and merchandise through cleverly-worded mailings designed to make recipients, largely senior citizens, believe that they had won a prize; that they were among a select group of sweepstakes finalists, and that making a purchase would enhance their chances of winning.
In last month’s federal court settlement in which the firm admitted no wrongdoing, PCH agreed to offer individuals who subscribed to magazines or bought merchandise between Feb. 3, 1992 and June 30 of this year as a way of improving their chances of winning its $11 million sweepstakes a chance to cancel those subscriptions or return the merchandise for a full refund while receiving at least three automatic entries in future sweepstakes.
Signaling his intention to file his own lawsuit in state court, Butterworth called the federal settlement “a bad deal for consumers” and “a good deal for lawyers and PCH,” although Irving called it “comprehensive, substantial and fair.”
Butterworth alleges in his suit that the firm deceived recipients of its personalized mailings, which allegedly contained simulated government documents with small-type disclaimers, into believing that company officials wanted them to win and that members of the PCH Prize Patrol would personally present them with their winnings.
Earlier this year while the sweepstakes industry was under intense scrutiny by state and federal authorities, including Congress which is considering legislation imposing tough, new regulations on sweepstakes promoters, American Family Publishers, another magazine subscription promoter which also operates sweepstakes, agreed to pay $4 million to Florida, Indiana, South Carolina and West Virginia, to settle a similar type lawsuit.
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