Publishers Clearing House Modifies Sweeps Marketing

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Publishers Clearing House, Port Washington, NY, began making voluntary improvements to its sweepstakes programs last week and explained the changes in advertisements in The New York Times, USA Today and The Washington Post.


Meanwhile, Sen. Susan Collins (R-ME), chairwoman of the Senate permanent subcommittee on investigations, had a hearing to review marketing practices of smaller and less-prominent sweepstakes companies. In the House this week, Rep. John McHugh (R-NY) is scheduled to have a hearing on two House bills that seek tighter control over sweepstakes promotions.


PCH spokesman Christopher Irving said its ads, "Sweepstakes Should Be Fun," were designed "to communicate to consumers and to regulators and the consumer protection community that we are concerned about the issues that have been raised and we are responsibly addressing those concerns."


While the company would not say whether the negative publicity has affected sales, Irving said consumer confidence in PCH has suffered over the past month. The ads explained that effective immediately, it is:


* Publishing the numerical odds of winning in the rules.


* Including "No Purchase Necessary" messages on the front of envelopes and including the sentence inside, "Every entry you send in, with or without an order, has an equal chance of winning."


* Making the instructions for how to enter without ordering easier to understand.


* Increasing the exposure of the company's toll-free number to make it easier for consumers to contact officials.


* Reducing the number of mailings an individual can receive.


Many of the provisions comply with those in Collins' Deceptive Mail Prevention and Enforcement Act (S. 335).


"One of the reasons we support federal legislation is because we think that it will increase consumer confidence in the mailings consumers will receive," Irving said.


Starting this fall, the company will voluntarily adopt the "Sweepstakes Fact" copy recommended by the National Association of Attorneys General subcommittee on sweepstakes and prize promotion. The report suggests that sweepstakes marketers include the following statements:


* "You have not yet won."


* "Enter for free."


* "Enter as often as you like."


* "Buying won't help you win."


"Some of these measures have been in place at Publishers Clearing House for some time," said senior vice president Deborah Holland. "Others we are adopting with the goal of establishing new standards for the industry and restoring the public's confidence in legitimate free-by-mail sweepstakes like ours."


Officials at American Family Publishers, Tampa, FL, said they are focusing on ads the company is running in People magazine, TV Guide and other consumer publications as part of its "Winners Campaign." The ads showcase some of AFP's 19,541 winners from across the country "because we want to reinforce with consumers that a lot of people do win a lot of substantial prizes from our company," said spokeswoman Jeanne Meyer.


Meyer said AFP favors standards and it already has voluntarily done many of the things mentioned in PCH's ad.


"We have, for some time, been making consumers aware of how legitimate sweepstakes operate -- with the American Family Promise that goes in every mail [piece]," she said. "We've been working cooperatively with Sen. Collins' subcommittee and with different attorneys general in various states to make sure there are standards, and we are happy that many of the initiatives that are articulated in legislation we have initiated."


Irving said PCH's ads were not tied to Collins' hearing last week. In a statement after the hearing ,Collins said these smaller sweepstakes marketers are "fly-by-night operations that use multiple trade names. In some cases, they are run by promoters for a year or two and then shut down before the operators start up a new company under a different name. These small outfits profit from their deceptive mailings but also by reselling the names of their customers to other companies, who then inundate consumers with new mailings."


McHugh's hearing this week will look at two bills: the Honesty in Sweepstakes Act (H.R. 170) and the Sweepstakes Protection Act (H.R. 237). Insiders said mailers are expected to be strongly defended by representatives of the Direct Marketing Association, the Magazine Publishers Association and the Promotion Marketing Association. Those trade groups, among others, are expected to basically reiterate comments they made earlier this year at a hearing on S. 335, which is pending on the Senate floor after having been approved by its Commerce Committee earlier this month.
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