Florida Charges PCH With Deceptive Practices

Share this content:
The state of Florida has filed suit against Publishers Clearing House, Port Washington, NY, after Attorney General Bob Butterworth said the stampsheet marketer was doing little to change its sweepstakes tactics.

The civil complaint lawsuit, filed in Pinellas County Circuit Court in Florida this week, seeks at least $40 million in consumer restitution and civil penalties under the state's Deceptive and Unfair Trade Practices Act, which it says PCH violated. The state is seeking $20 million in penalties and $20 million in restitution to consumers. Under that statute, the attorney general will seek full consumer refunds and civil penalties of up to $15,000 per violation.

Florida began discussions with PCH regarding its practices about a year and half ago; but after months of negotiations, Butterworth said the company failed to produce any meaningful changes to the deceptive tactics it was charged with using to sell magazines and merchandise through its national sweepstakes operation.

PCH spokesman Christopher Irving, said he was "very disappointed" to hear about the action. "Millions of consumers who receive our mailings understand exactly what they are: sweepstakes opportunities to enter where no purchase is necessary," he said.

He also said PCH began making voluntary improvements to its sweepstakes programs in mid-July, including the launch of an advertising campaign to communicate to consumers and regulators that it is concerned about issues that have been raised. It also has adopted a "Sweepstakes Fact" message box into its sweepstakes mailings that is recommended by the National Association of Attorneys General subcommittee on sweepstakes and prize promotion.

But according to special counsel Gary Betts, this was an effort to "get around whatever laws we have ... [and] during the negotiations, [PCH] sent out bad [mailings] and didn't have an explanation for it."

The lawsuit is not connected to an announcement Butterworth made Sept. 1 urging Florida residents to consider opting out of a proposed settlement of a private, class-action lawsuit against PCH currently pending. The suit charged the company with deceiving consumers into thinking they had to buy magazine subscriptions and merchandise to enter and win sweepstakes. The settlement calls for PCH to pay a maximum of $10 million, with as much as $3 million of that amount for attorneys fees and another $3 million for administrative costs.

"Individual consumers could get pennies while a relative handful of private lawyers get millions of dollars," Butterworth said, adding that in December - at a fairness hearing surrounding the civil action lawsuit - he will ask the Illinois federal court to exempt Florida residents from the agreement. n

Next Article in Marketing Strategy

Sign up to our newsletters

Company of the Week

Since 1985, Melissa has helped thousands of companies clean, correct and complete contact data to better target and communicate with their customers. We offer a full spectrum of data quality solutions, including global address, phone, email, and name validation, identify verification - available for batch or real-time processes, in the Cloud or on-premise. Our service bureau provides dedupe, email/phone append and geographic/demographic append services for better targeting and insight. For direct mailers, Melissa offers easy-to-use address management/postal software, list hygiene services and 100s of specialty mailing lists - all with competitive pricing and excellent customer service.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above