States sue Publishers Clearing House

By Alex Roth

January 25, 2000

Publishers Clearing House for years has been targeting the elderly and the gullible with a blizzard of deceptive mailers that are really disguised sales pitches.

California and 25 other states filed suit yesterday against the New York-based sweepstakes giant, accusing the company of using deceptive advertising to dupe people into shelling out thousands of dollars for magazine subscriptions and other merchandise.

In a lawsuit filed in San Diego Superior Court, state Attorney General Bill Lockyer accused the com-pany of targeting the elderly and the gullible with deceptive mailings, usually containing misleading bold-type declarations.

The mailings coax recipients into buying merchandise or magazine subscriptions by suggesting they are on the verge of winning millions of dollars, the lawsuit charges.

In reality, the odds of winning are no better than 1 in 50 million, according to Lockyer's office.

"Publishers Clearing House for years has been targeting the elderly and the gullible with a blizzard of deceptive mailers that are really disguised sales pitches," Lockyer said.

The Attorney General's Office cited an example of an elderly Orange County woman who shelled out more than $50,000 "for largely unnecessary magazine subscriptions and other purchases."

Lockyer accused the company of reaping "tens of millions of dollars" in California alone through deceptive practices and said his office will seek refunds for residents he believes were duped into buying merchandise.

The company denied any wrongdoing.

"Publishers Clearing House does not target the elderly," said Chris Fisher, spokesman for the Port Washington, N.Y., company. "We don't even know the ages of our consumers. ... Our market is the U.S. population."

In addition to refunds, Lockyer said he'll seek a court order to require the company to change its marketing techniques.

Also filing suit yesterday were Colorado, Georgia, Illinois, Louisiana, Minnesota, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Vermont and West Virginia.

The lawsuits were filed individually in local courts in each state.

New York Attorney General Eliot Spitzer said the lawsuits were sparked by a multistate investigation.

"This sweepstakes company has engaged in an elaborate scheme to increase its bottom line, financed on the backs of some who can least afford it: the elderly," Spitzer said.

That brings the number of states suing Publishers Clearing House to 25. Arizona, Connecticut, Florida, Indiana, Michigan, Missouri, Texas, Washington and Wisconsin already have sued the company.

The lawsuits come after attempts to negotiate a settlement broke down. Lockyer said California and New York reached a tentative settlement with the company last year, but other states rejected the terms.

Among other things, Lockyer accused the company of maintaining a "sucker list." He said state officials were trying to determine how many California residents were on that list. His office accused the company of disguising millions of bulk-rate mailings as "personal, priority-mail letters that contain urgent and confidential information about prizes that consumers are led to believe will be awarded imminently."

The lawsuit also accuses the company of using "simulated government forms and other official-looking documents to misleadingly imply that the consumer recipient is a winner," Lockyer's office stated in a press release.

The Associated Press contributed to this report.

Copyright 2000 Union-Tribune Publishing Co.