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Publishers Clearing House Sued

January 25, 2000 GMT

ST. PAUL (AP) _ Minnesota and 24 other states have filed separate lawsuits against Publishers Clearing House, claiming false advertising by the sweepstakes giant that sends its ``Prize Patrol″ minivan out on Super Bowl Sunday.

``Publishers Clearing House’s deceptive sweepstakes solicitations are designed to convince consumers that they are on the verge of winning big and that additional orders of magazines or goods are needed to improve their chances of winning,″ Minnesota Attorney General Mike Hatch said Monday.

The Port Washington, N.Y.-based company also misrepresents that it has a ``personal relationship with consumers″ and induces people into believing that they are guaranteed winners of multimillion dollar prizes, when they were winners of $1 or costume jewelry, according to the lawsuit.

Christopher L. Irving, director of consumer affairs at Publishers Clearing House of Port Washington, N.Y., denied the allegations and said the majority of people who return their sweepstakes entries do so without ordering.

``The majority of our millionaire winners, 23 of 30, did not order with their winning entry,″ Irving said.

Suing Monday were Colorado, New York, North Carolina, New Jersey, Illinois, Ohio, New Mexico, Oklahoma, Vermont, Oregon, Pennsylvania, West Virginia, Louisiana, Georgia and California. Similar complaints already had been filed in nine states.

Hatch’s office was contacted by more than 240 people about what they considered deceptive practices by Publishers Clearing House. The lawsuit, filed in Ramsey County District Court, seeks injunctive relief, restitution for consumers and civil penalties of $25,000 per violation. Hatch also is seeking a supplemental civil penalty of $10,000 for each violation against a senior citizen.

Irving said the company does not target any age group or demographic.

``The audience that we seek is the United States population,″ he said, adding that the company sells everything from Rolling Stone magazine to Glenn Miller tapes.

The states sued Monday because a hearing was scheduled Tuesday in a proposed settlement of a class-action lawsuit against the company. The attorneys general feared a settlement might keep them from suing in the future. Hatch and others think the class action does little for people victimized by misleading sweepstakes contests and doesn’t do enough to prohibit similar practices in the future.


One of the lawyers who filed that suit, Steven A. Katz, expected consumers to collect between $14 million and $16 million in that case. The deadline for filing a claim was Nov. 5. The ``fairness hearing″ to finalize the case is scheduled for Tuesday in U.S. District Court in East St. Louis, Ill.

Of the 43 million consumers eligible in the class-action lawsuit, about 100,000 people responded, Irving said.

Last month, President Clinton signed into law a measure designed to help protect people from sweepstakes scams.

The Deceptive Mail Prevention and Enforcement Act bars sponsors from implying that buying products can increase entrants’ chances of winning big prizes, requires prominent display of messages that no purchase is required and bars telling recipients that they have won a prize unless they actually have.

It also imposes million-dollar fines on sweepstakes companies that violate the law.

The states that had sued Publishers Clearing House earlier were Arizona, Connecticut, Florida, Michigan, Missouri, Texas, Wisconsin, Washington and Indiana.

Publishers Clearing House was founded in 1953 and has been holding sweepstakes since 1967. The company has given out about $137 million in major prizes and awards, Irving said. In 1997 and 1998, the company had annual sales of about $375 million.