January 24, 2000


Genene Morris, Jennifer Salvato (973) 504-6327

New Jersey and 18 Other States Sue Publishers Clearing House

State's suit alleges violation of consumer protection laws in connection with sweepstakes offerings

NEWARK-New Jersey and 18 other states filed separate lawsuits today against Publishers Clearing House ("PCH") alleging that the sweepstakes promoter unlawfully enticed millions of consumers nationwide into purchasing its merchandise by misleading them into believing that those purchases would greatly improve their chances of winning large sums of cash and/or valuable prizes, Attorney General John J. Farmer, Jr., and New Jersey Division of Consumer Affairs Director Mark S. Herr announced.

The State's suit, filed in Essex County Superior Court this morning, seeks a court order barring PCH from continuing its alleged unlawful practices and requiring it to pay restitution to affected consumers as well as civil penalties, costs and attorneys' fees. PCH, which markets magazine subscriptions and consumer products nationwide through promotional sweepstakes, has its principal place of business at 382 Channel Drive, Port Washington, New York.

"We are alleging that Publishers Clearing House unlawfully used the lure of sweepstakes prizes to sell the products it was marketing," Farmer said. "Our goal here is to put an end to such alleged practices, to provide relief to consumers who have been affected and to protect consumers from further violations of the State's consumer protection laws."

"We have 216 consumers who complained to us about PCH's solicitations," Herr said. "We take these and other violations very seriously."

Since 1996, the State's suit alleges, PCH has conducted more than 100 mailings each year to tens of millions of households nationwide. In many instances, the complaint alleges, PCH's solicitations were deceptive and falsely led consumers to believe that they were guaranteed winners in its sweepstakes offerings when, in fact, they were not.

According to the complaint, the solicitation campaign falsely implied that the recipients of the solicitations were part of a select few to receive the invitation to enter its sweepstakes offering. In fact, the solicitation unlawfully concealed the fact that it was part of a mass mailing sent at bulk rate to hundreds of thousands or millions of consumers throughout the United States.

Also, according to the complaint, PCHs promotional materials unlawfully implied that a purchase would enhance the recipient's ability to win a prize in the sweepstakes.

"The State's Consumer Fraud Act is clear with regard to sweepstakes promotions," Herr said. "It is unlawful for a promoter to tell someone that he or she has won a prize, when they have not and to require consumers to purchase something in exchange for a chance to win a prize."

In addition to New Jersey, the following states filed suit against PCH today: California, Colorado, Georgia, Illinois, Kansas, Louisiana, Minnesota, Mississippi, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Utah, Vermont, and West Virginia.

In total, 28 states have filed suit against PCH for violations of consumer protection laws throughout the country. In previous months, Arizona, Connecticut, Florida, Indiana, Michigan, Missouri, Texas, Washington and Wisconsin also filed suit against PCH.

Deputy Attorneys General William E. Graves and Jodi Krugman are handling this case for the State.

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