(SACRAMENTO) - Attorney General Bill Lockyer today sued Publishers Clearing House over allegedly misleading and untrue prize promotions, including annual tactics used to lure many Californians into awaiting the "Prize Patrol" knock on the front door on Super Bowl Sunday.
"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. "We want to stop the sweepstakes company from fraudulently luring Californians into buying magazines, collectibles and other goods with the mistaken belief that they are improving their chances of becoming an instant millionaire."
The complaint filed in San Diego Superior Court seeks an injunction to prohibit Publishers Clearing House from sending deceptive mailings and engaging in unfair business practices. The complaint seeks refunds for consumers who were defrauded by the company and any appropriate penalties and costs. Lockyer said the complaint was filed after California and more than two dozen states failed to reach a negotiated agreement with the company based in Port Washington, N.Y.
Publishers Clearing House sends nationwide over 100 million pieces of mail to consumers, offering a chance to win sweepstake prizes that include $10 million on Super Bowl Sunday. The company uses envelopes and messages that appear to be personalized, sometimes using printed type that appears to be hand-written, personal messages featuring official-looking emblems and large, bold print warnings.
"Although the solicitations have consumers believing they have already won or are on their way to winning the grand prize, the actual odds of winning are no better than one in 50 million - a fact not usually disclosed by the sweepstakes company," Lockyer said. "In one case, an elderly Orange County woman believing she could win spent more than $50,000 in savings for largely unnecessary magazine subscriptions and other purchases."
The complaint states that the company's letter design disguises millions of identical, "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 complaint states that the company also has used simulated government forms and other official-looking documents to misleadingly imply that the consumer recipient is a winner.
Lockyer said the tactics used by Publishers Clearing House sought to create the mistaken impression that a consumer could be on the winning track by using the "official" entry form reserved for those who make purchases, rather than the postcard for non-purchasers. Consumers who made a purchase are often targeted for a wave of new solicitations as a so-called preferred contestant.
Examples of messages used in the mailers include: "[Consumer's Name]: WINNERS CONFIRMATION FORM ENCLOSED" or "PCH FINAL NOTIFICATION FOR TAX-FREE $11,700,000.00 SUPERPRIZE." PCH envelopes implore the consumer to return the enclosed "IMMINENT DELIVERY AGREEMENT" or feature departments or handling intended to suggest special attention, e.g., "Payments and Disbursements," "Priority Express Communication," "Level III Security," "Level IV Security."
The complaint states that the messages mislead consumers into believing that a prize of significant value is about to be awarded to them or something of unique and significant value is in the envelope, when in fact no significant prize is awaiting the consumer. The messages instead are part of a sophisticated sales pitch to inundate the consumer with solicitations, advertisements and pleas for orders.
California's lawsuit was among some 15 individual state actions to be filed today against Publishers Clearing House. Nine other states have independent legal actions pending against the sweepstakes company.