Publishers Clearing House, 26 states settle for $34 million

USA Today

The Publishers Clearing House Prize Patrol is still out there looking for winners, but its wings have been clipped.

The magazine-and-prize promoter reached a $34 million settlement yesterday with 26 states over the use of deceptive marketing practices.

Although similar to last August's $18 million settlement with the other 24 states, including Hawai'i and the District of Columbia, the new agreement has some differences:

• One entry form accepted by Publishers Clearing House for all entrants. In previous instances, people who wanted to enter the sweepstakes without buying magazines used a different form. The states' attorneys general argued that the difference implied lower chances of winning.

• An end to mailings to magazine subscribers implying that they were closer to winning than nonsubscribers.

• Restrictions on the Prize Patrol. In past years, subscribers would get letters from the Prize Patrol asking for directions to their homes and other letters indicating that the recipient was almost certain to win. Those practices, but not the use of the Prize Patrol, are now restricted.

"We really think we've come a long way," says Victoria Butler, assistant attorney general in Florida. "This is a significant settlement."

"The company is relieved to have closed all these legal issues," says Christopher Irving, head of consumer affairs at PCH.

Irving says that people who have unusual patterns of subscriptions, especially those who can't afford them, will be dropped from PCH mailings.

As part of the agreement, PCH also will include a table on its mailings indicating the odds of winning. The chart will be similar to FDA-style nutrition labeling found on food packages, the company says.

The company also will work with a "compliance counsel," former U.S. Attorney General Benjamin Civiletti, to oversee future compliance with the deal.

The states participating in the latest settlement are Arkansas, Arizona, Colorado, Connecticut, Delaware, Florida, Iowa, Indiana, Kansas, Kentucky, Massachusetts, Maryland, Maine, Michigan, Minnesota, Missouri, North Carolina, New Jersey, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Wisconsin and West Virginia.

American Family Publishers, which used Dick Clark and Ed McMahon to promote prizes, settled with the states three years ago.