Attorney General Hardy Myers today announced that Time, Inc., one of the country's largest sweepstakes mailers, must make dramatic changes in printed materials and establish a $4.9 million restitution fund as part of a multi-state settlement. The company, which sends sweepstakes mailings under the name Guaranteed & Bonded, is named in an Assurance of Voluntary Compliance filed today in Marion County Circuit Court.
"Time sends out millions of sweepstakes mailings annually to consumers," Myers said. "This agreement requires Time to make honest disclosures to consumers and provide restitution to consumers who spent hundreds of dollars on product and subscriptions because they mistakenly believed doing so would enhance their chances of winning a prize."
The assurance, which does not admit violations of law, requires Time to provide a clear and conspicuous "Sweepstakes Facts" sheet in all sweepstakes mailers. The facts will inform consumers that purchasing products will not help a consumer win a prize, and that the consumer does not have to buy anything in order to enter the sweepstakes. The facts sheet also will include the odds of winning a prize.
In addition, under the terms of the agreement Time may not state that a consumer is the winner or about to become the winner of a sweepstakes, exaggerate the consumers chances of winning a sweepstakes or indicate that promotions will be delivered by special courier or by a special class of mail.
The $4.9 million will be distributed to consumers who spent more than $500 in 1997, 1998 or 1999 on Time magazines and products, such as Time-Life books or audio or video collections. Referred to by Time as "high activity" customers, consumers in the over $500 category and certain customers who have five-year plus magazine subscriptions resulting from multiple orders will be placed on a "Do Not Promote List."
From 1997-1999, 113 Oregon households spent $500 or more on Time merchandise and will receive $81,071 in refunds. A third party administrator will be selected to distribute the funds on behalf of the states.
The agreement also requires Time to pay the states $3.2 million for attorney fees and investigative costs. Oregon's share is approximately $75,000.
This is Oregon's second multi-state settlement filed against a major sweepstakes company since the Attorneys General held national hearings last year.
Consumers wanting information on sweepstakes may call the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only) or toll-free at 1-877-877-9392 or write Financial Fraud/Consumer Protection, 1162 Court Street, N.E., Salem, Oregon 97310. Information is online at www.doj.state.or.us.
Jan Margosian, (503) 947-4333 (media line only) firstname.lastname@example.org