It doesn’t pay to be in the sweepstakes business these days. Publishers Clearing House agreed last month to pay $34 million as it reached a settlement with 26 states. Sweepstakes woes even contributed to last week’s demise of cataloger Foster & Gallagher. PCH, which settled with 24 states and the District of Columbia last summer, agreed to provide more stringent consumer protections and acknowledged that its “mailings were confusing to some consumers.” What, it took a lawsuit to acknowledge that? PCH also said it will stop using simulated checks to suggest that a consumer is an imminent winner.
Whether the settlement will drive PCH into bankruptcy — just as similar ones did to American Family Enterprises — remains to be seen. But it seems that the states are doing their best to put an end to sweepstakes in general. The Deceptive Mail Prevention and Enforcement Act, which went into effect last year, wasn’t enough, as Colorado enacted a law that’s so restrictive that most marketers now simply avoid the state. Other states appear to be following suit.
The lawsuits aren’t over yet, either. Though Reader’s Digest settled with 32 states and the District of Columbia in March, it and Time Inc. still have others pending.
Be Glad You Live Here
Think we have it bad in the United States with postal rate increases? Don’t move to Greece. That country just raised its postal rates for most direct marketing materials by 70 percent. Alastair Tempest, director general of the Federation of European Direct Marketing, warns that other countries could follow suit. Things are more friendly in Canada, where Canada Post has proposed a 2.1 percent increase in domestic basic letter rates as well as increases for U.S. and international letter rates. That will make it almost the same to mail the equivalent of a First-Class letter in Canada: 32 cents (U.S.) vs. 34 cents in the United States.
