Publishers Clearing House has voluntarily agreed to offer millions of dollars in refunds in order to sweepstakes participants to settle a federal class-action lawsuit over its sweepstakes advertising and marketing practices.
Over the last few weeks the Port Washington, NY-based sweepstakes operator and direct marketer of magazine subscriptions has been mailing out copies of the settlement, approved by U.S. District Judge G. Patrick Murphy on June 30, to 40 million sweepstakes entrants and magazine subscribers.
The settlement notice, in which PCH admits no wrongdoing, offers individuals who subscribed to magazines or bought merchandise between Feb. 3, 1992 and June 30 to enhance their chances of winning PCH’s $11 million sweepstakes, the chance to cancel their subscriptions or return the merchandise for a full refund.
In addition it notes that sweepstakes entrants would be offered at least three automatic entries in future sweepstakes programs.
Although calls to PCH for comment were not returned, PCH attorney Bill Low was quoted in published reports as saying that the company agreed to settle the suit filed in U.S. District Court for the Southern District of Illinois, East St. Louis by Thomas G. Vollmer and nine others on behalf, “to avoid extended litigation.”
Low went on to say in the statement that PCH was pleased that it “could reach a fair settlement and resolve the concerns” expressed in the lawsuit.
The suit alleged that PCH misled consumers into believing that their chances of winning an $11 million sweepstakes were enhanced with the purchase of magazine subscriptions, books and other merchandise.
There was no immediate indication of what effect the settlement would have on two similar lawsuits against PCH brought in state courts by Indiana Attorney General Jeffrey Modisett and Wisconsin Attorney General James Doyle.
In recent months the sweepstakes industry has been under close scrutiny by state and federal authorities as well as Congress where legislation is pending that would tighten the government’s control over sweepstakes mailings. One such measure cleared the Senate last month while two others are pending in the House.
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