Posted September 9, 2010 9:57 pm by with 10 comments

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As you’ve probably seen everywhere else on the web, Publisher’s Clearing House has agreed to pay out 3.5 million in damages after being accused of deceptive marketing practices. In addition to the money, Publisher’s Clearing House is being tasked with a new set of rules in regard to how they run their business and here is where it gets sticky.

The claim is mostly based on the fact that people, particularly seniors, were left with the impression that the more they bought from PCH, the better their chances would be of winning the big prize. Now, I haven’t seen one of their letters in a long time, but I’m pretty sure it says right on there that buying will not increase your chance of winning. Okay, I get that not everyone reads the not-so-fine print and that not everyone understands what they read, but how is that PCH’s fault?

I’m not siding with the big check guys completely, mind you. I’ve always found their game to be a little scammy but by the same token, so is every casino and state lottery. Can I sue the State of California if I buy $5,000 worth of scratchers and only win $1.00? Their website says there are still millions of dollars to be won and all my dreams could come true if I play. How is that any different?

A press release from Illinois State Attorney General Lisa Madigan’s office included these statements:

“One senior reported spending $2,126 on merchandise in one year in hopes of winning a prize, but never won a dime.”

“Another Illinois consumer said her 84-year-old father “is devastated each time he learns he is not the winner.” She told Madigan’s office that her father believes that he’s more likely to win because he makes purchases and receives personalized mailings from Publishers.”

Now, as part of the settlement, PCH is required to check up on any senior who spends more than $500 in a quarter. They have to contact the person and find out if they have all their faculties and if they don’t understand how the sweepstakes works, then PCH must cut them from their mailing list.

Seriously? Who is going to make these screening calls? Trained mental health professionals? And how many people are we talking about? There must be plenty of seniors over spending or this thing never would have made it to court.

My problem with this whole situation is where does the company’s responsibility end? As long as their sales letters make it clear that a purchase is not necessary, how can they be held liable? Sure, they could tone down the hoopla or ban anyone over 65 from their mailing list. But should they have to?

Here’s the real kicker, the 3.5 million dollar fine will be given to the 32 states that filed against PCH to be used to re-coop investigative costs. So, none of the money will go to the people supposedly wronged by the company? Now that sounds like deceptive marketing to me.

  • Lawyers are so black hat.


  • Honestly each of those mailers (like you said) says right in it “purchasing these items DOES NOT increase your chances of winning”. This all reminds of the girl who sued McDonalds because their food made her fat. Come on people….

  • Mary Bradley

    PCH is so guilty of fraud that I have a very difficult time being civil to anyone who can’t see it. I realize that you probably don’t have a parent or grandparent who has been bamboozled out their little bit of income by this extremely black hat organization, but IMHO anyone or any company that targets children or the elderly deserves a special kind of hell. And, I so hope they get it!

    Yes, my mom can read the disclaimer on the dozens of envelopes they send her every week, but she doesn’t believe it. And besides, by the time that disclaimer became visible, it was too late. They already had the bulk of her funds. So now she feels she can’t quit because tomorrow might be the day of her big pay off. She says, “They know I’ve been a loyal customer for more than 45 years – they’re going to give me something.” This is a smart woman, but she is 90.

    Don’t think I haven’t tried to stop this back and forth between my mom and PCH. I’ve called, written and emailed the company to try to get some kind of statement from them of how much Mom owes. They tell me they cannot issue a statement or give me a total because each piece of crap they send her has a separate invoice and they have no way of telling the total. Mom sends them as as much she can every month, but sometimes they send threatening sounding letters that worry her to death. I’m so frustrated that I want her to quit sending them any money at all. What are they going to do to a 90 year old woman? They’ve pretty much ruined her old age already. Damn them, anyhow!

    • Ms. Bradley, this is Chris Irving from Publishers Clearing House. The experience you describe is in direct opposition to the programs and polices that we have in place that are designed to provide assistance to any consumer or loved one acting on thier behalf. I would like very much to learn more and offer you my immediate help to resolve any concern you may have. I would invite you to contact my office directly at (516) 944 – 2090 so that I can assist you and your family at once.

      Regarding Cynthia’s original post, it is true that all of our mailings provide clear and easy to read no purchase necessary disclosures. In fact, each year roughly 3 out of 4 people return thier entry without ordering anything! With this new agreement we will extend these disclosures and consumer protection programs even further. And that is a good thing for all consumers.

      Chris Irving
      Assistant Vice President, Consumer Affairs
      Publishers Clearing House

    • Cynthia Boris

      Mary, I understand your frustration, believe me I do. But what you describe sounds very much like people who become addicted to gambling (being a girl who grew up near Atlantic City, I’ve seen it.) I had a grandparent who bought lots of lottery tickets with the same thought, but surely the next one will be the winner, or the next quarter in the slot.

      I’m not agreeing with everything PCH does (and thank you Mr. Irving for joining us), my question is about why they’re being singled out when people dump thousands into casinos where their odds of winning are probably even less. You can tell them that until the cows come home but they’ll still believe that next quarter will win them a million bucks.

      If PCH isn’t allowed to do what they’re doing, then we should shut down the lottery and casinos and every website that says you can win a prize if you play a game. I simply don’t see how these other instances are different and acceptable.

  • Most contests or drawings in the US must be made available to enter without purchase. I, myself, have entered after having read that term/policy. While my heart goes out to anyone who has experienced stress or financial hardship over this, forcing a company to “find out if they have all their faculties” can be a very slippery slope and a bad precedence to set.

    With that said, please look after your elders as much as you look after your kids.

  • Greg Hollingsworth

    I’ve got to agree with you and given the court sided with the plaintiff, I wonder where our courts are headed. People have to accept the responsibility for their own actions. This is a very serious error on the part of the legal system and I would have hoped that PCH would appeal such an obviously flawed decision. Caving in to it just makes the problem worse.

  • Mary Bradley

    I believe there is a huge difference, Cynthia, in that casinos prey upon everyone indiscriminately – they don’t invade the homes of the most vulnerable and elderly. They don’t pretend to befriend the lonely through the mail or over the phone and they don’t promise to show up on their doorstep with balloons, party hats and a big fat check. To that generation, PCH did make a promise and then they broke it – along with the hearts and spirits of millions of old people. It’s truly not the same as you or me going to Vegas to spend the rent money. I think it’s more like Peewee Herman climbing through the open window of our children’s bedrooms at night and promising to be their new best friend.

    To Chris Irving: I am trying to decide whether or not to call you. Thank you for stating your concern and giving me something to think about.

  • Well what can you do – I believe that more money than sense is the case with this. But people have to remember that PCH are a business – and competitions carry no guarantees – Sweepstakes indeed!! Spend the little money you have wisely – its your money and your responsibility.

  • Dennis McDonald

    I’ve been fascinated with the email based promotions with PCH and have been playing along. The language used is very carefully designed to confuse but there is always fine print or a vague reference that can be pointed to as evidence that, “See, we were honest about this particular promotion.” What astonishes me is the poor quality of the products offered and the fact that they appear to be selling only paper editions of magazines, something we gave up years ago in the favor of online information. Apparently this is what happens when quantity wins out over quantity. I understand the principle bu I can’t help wondering if they might be more effective in their online marketing by not consciously tryng to confuse the customer. Their techniques remind me of the email scams I receive now and then from other countries and I’m surprised they prefer this approach over something more honest and straightforward. I can also see how the language they use might be purposely confusing to folks for whom English is a second language. I do find the whole approach interesting as tacky advertising like this is something I rarely encounter anymore.