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Tuesday, January 25, 2000

State sues Publishers
Clearinghouse, calls
sweepstake mailings

By Debra Barayuga


The state has filed a lawsuit against Publishers Clearinghouse for using deceptive practices to convince people, especially the elderly, that they have won a sweepstakes contest.

The complaint, filed yesterday against one of the nation's largest direct mail solicitors by the state Office of Consumer Protection, is among several filed nationwide by state agencies since 1997.

Publishers Clearinghouse, which does business out of New York, is one of the largest direct mail companies in the nation, with annual sales of $375 billion in 1997. That year, the company sent out about 100 billion mailings to consumers throughout the United States, including Hawaii, according to the suit.

The company offers magazines, videotapes and other merchandise through repeated mailings to a target population, a substantial percentage of which consists of the elderly, the state alleges.

The mailings imply that the consumers have won or are likely to win a large cash prize or misrepresent that they can improve their chances of winning by ordering. Consumers who opt not to order are required to undergo a more "cumbersome" entry method.

The complaint accuses Publishers Clearinghouse of using personalized letters from bogus officials to establish a relationship of trust with consumers and using official looking emblems that imply their sweepstakes are endorsed by the U.S. government.

The suit asks the courts to block the company from engaging in the practices and impose an assessment of $10,000 for each violation. The suit also seeks restitution for every consumer injured as a result of the practices.

The Florida attorney general filed suit against Publishers Clearinghouse last September, also accusing the company of deceptive practices. Their suit seeks restitution of at least $40 million.

A lawsuit was filed last April in King County Court, Wash., against Publishers Clearinghouse, American Family Publishers and Time Inc. In a multistate settlement announced in March 1998, Hawaii was to receive $50,000 from American Family Publishers, accused of misleading and illegal solicitations. Under the agreement, American Family can't tell consumers they are winners or have won a prize unless it happens.

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