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June 26, 2001


Genene W. Morris 973-504-6327

Publishers Clearing House Settles Sweepstakes Case

NEWARK - New Jersey and 25 other states have negotiated a groundbreaking agreement with Publishers Clearing House ("PCH") that requires the sweepstakes giant to make significant and permanent changes in the way it conducts its future contests and to pay a total of $34 million nationwide in consumer restitution, costs and civil monetary penalties, Attorney General John J. Farmer, Jr., and New Jersey Division of Consumer Affairs Director Mark S. Herr have announced.

Today's settlement, which is subject to court approval, will end New Jersey's lawsuit against PCH, which alleged that the sweepstakes promoter unlawfully enticed New Jersey consumers into purchasing its merchandise by misleading them into believing that those purchases would improve their chances of winning large sums of cash and/or valuable prizes.

As part of the agreement, PCH must pay restitution totaling $19 million for customers who were deceived by their past practices. The number of affected New Jersey consumers is yet to be determined.

PCH also will pay civil penalties of $1 million, and $14 million to cover the costs of the litigation and administering the restitution payments. The penalties are the first imposed on PCH for allegedly deceptive sweepstakes. The allocation of restitution, costs and civil penalties is being negotiated among the states.

"Today's settlement greatly enhances the safeguards that are in place to stop deceptive marketing by Publishers Clearing House," Attorney General Farmer said. "This will give meaningful and lasting protections for people who want to enter Publishers Clearing House sweepstakes."

"This settlement goes far beyond any protections ever negotiated with Publishers Clearing House to protect our citizens," Herr said. "Our citizens will not be swept away in a flood of misleading sweepstakes come-ons."

The settlement includes several first-ever concessions from PCH, including:

In addition to New Jersey, 25 other states helped to negotiate today's agreement. The other states include: Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, North Carolina, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, West Virginia and Wisconsin.

Deputy Attorney General William E. Graves of the Division of Law handled this case for the State.

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Posted June 2001