Publisher’s Clearing House, the Port Washington, NY-based magazine subscription sweepstakes marketer, has reached a settlement with 26 state attorneys general. The company settled with 24 states and the District of Columbia last summer.
But the settlement could lower PCH’s mail response rates by as much as one-third and hurt both that company and the magazine publishing industry, predicted direct marketing consultant Bob Borders, who worked with several state attorneys general suing PCH.
“The settlement is going to have a significant impact on PCH’s response rates, which is going to have to rewrite the 11 packages it now uses for mailings,” he said. Key to these copy revisions is changing the phrase “no purchase necessary to win” to “no purchase necessary to enter.”
But Borders stopped short of predicting that this settlement would drive PCH into bankruptcy as those with competitor American Family Enterprises did.
Under the accord, Publishers Clearing House agreed not to make false, deceptive or misleading statements to consumers who were lured into buying merchandise because they believed it would increase their chances of winning a sweepstakes.
In addition, the firm will no longer use simulated checks to suggest a consumer is an imminent winner and instead must stress that sweepstake entrants have not yet won.
Highlights of the settlement include:
*Removal from the mailing list of consumers who may be confused about sweepstakes promotions
*Permanent inclusion in all PCH mailings of disclosures that alert consumers about odds of winning, giveaway end dates and that no purchase is necessary<>p> *The use of a single method of entry for all consumers who wish to enter the sweepstakes.
*Establishment of a “Special Compliance Counsel” to act as a liaison between the states and PCH on an ongoing basis
The states participating in this settlement are: Arkansas, Arizona, Colorado, Connecticut, Delaware, Florida, Iowa, Indiana, Kansas, Kentucky, Massachusetts, Maryland, Maine, Michigan, Minnesota, Missouri, North Carolina, New Jersey, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Wisconsin and West Virginia.
“This settlement will allow PCH to move forward doing what we do best – serving millions of satisfied customers and awarding millions of dollars to people all over the U.S.” said PCH chairman Robin Smith, in a statement.
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