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ATTORNEY GENERAL THURBERT BAKER FILES LAWSUIT AGAINST PUBLISHERS CLEARINGHOUSE

PRESS ADVISORY

ATTORNEY GENERAL THURBERT BAKER FILES LAWSUIT AGAINST PUBLISHERS CLEARINGHOUSE

January 24, 2000

Attorney General Thurbert Baker announced today that he has filed suit against Publishers Chearinghouse (PCH) in Fulton County Superior Court. The lawsuit against PCH, which is a limited partnership based in Port Washington, NY, alleges that the sweepstakes company used deceptive marketing practices to defraud Georgia consumers of millions of dollars and then aggressively targeted consumers who had already been mislead.

The lawsuit is brought pursuant to the Georgia Fair Business Practices Act, O.C.G.A. section 10-1-390 et seq., and seeks an injunction, civil monetary penalties, restitution for consumers and the cost of investigating and litigating the matter. It also alleges that PCH violated O.C.G.A. section 10-1-851 by targeting its practices at elderly persons.

PCH, founded in 1953, is one of the largest direct mail solicitors in the United States. It uses large, heavily promoted sweepstakes, typically for prizes of $10 million or more, to market its magazines and merchandise. PCH’s sales in 1997 are believed to have been approximately $375 million.

The complaint filed by Baker alleges that PCH uses a variety of false, misleading and deceptive techniques to secure merchandise and magazine orders from customers. These techniques include:

 Giving recipients the false impression that their chances of winning a prize are enhanced if they order products, as opposed to entering the sweepstakes without buying products.

 Requiring that recipients execute documents, provide information or take other action in preparation for winning a prize, when in reality, the recipient’s entry is no more likely than any other to win.

 Deceiving recipients into believing they have won a prize or are in a specially selected group of finalists from which a winner will be selected.

 Presenting simulated documents such as IRS Form 1099, checks and deposit slips that suggest a recipient’s entry is likely to win.

 Using envelopes that appear to have a high level of urgency or security, when in fact, they do not.

 Using copy and print techniques, such as varying the size, color and type, to minimize the effect and readability of disclaimers and maximize the effect of misleading statements.

 Making statements meant to make a recipient believe that the company's Prize Patrol is coming to the recipient's house, including asking for specific directions to a consumer's home, when in fact, the recipient is no more likely than any other entrant to win a prize.

 Using bogus mailings that give the false impression that company employees have a special feeling or interest in the recipient and want that person to win.

 Misrepresenting the deadline for entering the sweepstakes to be before it actually ends, leaving the impression that PCH awards prizes more frequently than it does.

 Using its unfair and deceptive practices to specifically target elderly persons.

“As Attorney General, I will see that Georgia’s consumer protection laws are enforced against companies that seek to prey on our citizens, especially the elderly,” Baker said. “I will seek to stop deceptive marketing wherever I find it and seek restitution for the victims of these schemes,” he continued.