Sixteen states, including California, filed complaints Monday against sweepstakes giant Publishers Clearing House, claiming the company misled consumers into believing that they had a better chance of winning if they ordered more products.
The Port Washington, N.Y.-based company, which sells magazines and other merchandise through direct mail, misrepresents that it has a "personal relationship with consumers" and that it induces people into believing that they are guaranteed winners of multimillion-dollar prizes, when they were winners of $1 or costume jewelry, according to the lawsuit filed in Minnesota--typical of those filed in other states.
Also suing Monday were Colorado, New York, North Carolina, New Jersey, Illinois, Ohio, New Mexico, Oklahoma, Vermont, Oregon, Pennsylvania, West Virginia, Louisiana and Georgia. Similar complaints had been filed separately in nine states.
California Atty. Gen. Bill Lockyer said the company "for years has been targeting the elderly and the gullible with a blizzard of deceptive mailers that are really disguised as sales pitches."
Christopher L. Irving, director of consumer affairs at Publishers Clearing House, said the majority of people who return sweepstakes entries do so without ordering.
"The majority of our millionaire winners, 23 of 30, did not order with their winning entry," Irving said.
He said the firm does not target any age group or demographic.
Lockyer said attorneys general from several states had been in settlement talks with the firm but concluded Friday that the negotiations were fruitless. "After you spend a year trying to negotiate refunds and reforms in their practices and they resist, I am skeptical" of whether a future settlement might be possible, he said.
Also, the states sued Monday because a hearing was scheduled Tuesday in a proposed settlement of a class-action lawsuit against the company. The attorneys general feared a settlement might preclude them from suing in the future.