Sweepstakes contest organizer Publishers Clearing House will pay a total of $3.5 million to Illinois, 31 other states and Washington, D.C. to cover their investigative costs as part of a new settlement that also toughens solicitation practices.
The settlement, filed in Cook County Circuit Court, stemmed from a probe into Publishers’ “marketing practices of misleading consumers to believe purchasing magazines and other products will increase their chance to win the jackpot,” Illinois Attorney General Lisa Madigan said in a statement.
Illinois’ share of the settlement will be about $40,000, a spokeswoman said.
The filing strengthens terms of settlements that the states reached in 2000 and 2001, she said. Continued complaints filed with Madigan’s office in recent years, however, raised new concerns that consumers could still be confused by the nature and language of Publishers’ promotional mailings.
One senior reported spending $2,126 on merchandise in one year in hopes of winning a prize, but never won a dime.
Another Illinois consumer said her 84-year-old father “is devastated each time he learns he is not the winner.” She told Madigan’s office that her father believes that he’s more likely to win because he makes purchases and receives personalized mailings from Publishers.
Under the terms of the new agreement, Publishers also must identify and survey each Illinois consumer over the age of 65 who spends $500 or more in a quarter and remove those consumers from their mailing lists if they have misunderstandings about sweepstakes.
They must also send a non-promotional letter to Illinois consumers who spend more than $1,000 on merchandise a year, emphasizing that making a purchase does not increase the likelihood of winning and take additional steps to make sure their mailings aren’t misleading.