States Reach Sweepstakes Settlement

Publishers Clearing House said Tuesday it has agreed to pay $34 million to 26 states to settle all remaining allegations it used deceptive sweepstakes promotions to sell magazines.

The agreement comes 10 months after the company, one of the largest U.S. magazine subscription agencies, settled with the other 24 states, including California, and the District of Columbia for $18 million.

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.

The company, which has been in business for 47 years, no longer will use simulated checks to suggest a consumer is an imminent winner and instead must stress that sweepstake entrants have not won yet. It also must tell consumers they don’t have to buy magazines in order to win.

Deborah Holland, executive vice president, said entries for the $1-million prize to be awarded Aug. 23 were in the mail: “The fact that the company faithfully awards its prizes has never been in doubt.”

The $34-million settlement included $19 million for consumer restitution, $14 million in costs and attorneys’ fees and $1 million in civil penalties, said Wisconsin Atty. Gen. James Doyle.