Attorney General Hardy Myers today announced that hundreds of Oregonians will receive restitution under a $34 million agreement between sweepstakes giant, Publishers Clearing House (PCH), and 26 states. A consent judgment to be signed by one of the nation's largest magazine subscription sellers will resolve a lawsuit filed by the Oregon Department of Justice against PCH in January 2000. The judgment must still be approved by Marion County Circuit Court.
"PCH willfully misled Oregon consumers in its sweepstakes in order to convince them that buying products and ordering subscriptions were required to enter or would enhance their chances of winning," Myers said. "In this groundbreaking agreement, PCH will be held accountable for years of filling Oregonians' mailboxes with false promises of becoming wealthy."
The agreement includes $19 million in restitution with more than $436,000 to be shared by Oregon victims. "This settlement requires PCH to fast-track the restitution distribution due to large numbers of elderly victims," Myers said.
PCH also will pay a total of $14 million to the participating states to cover litigation and settlement-related costs and $l million in civil penalties.
Oregon and the 25 other states involved in today's settlement had rejected an earlier, multi-state agreement reached last summer with PCH and 24 states and the District of Columbia. The three-year, multi-state investigation and prosecution of PCH will conclude with 20 of the 26 states ending litigation and four closing active investigations. Oregon's history with PCH includes an earlier prosecution resulting in a 1992 settlement.
Under today's agreement, PCH will make significant and permanent reforms in the way it conducts its future sweepstakes. PCH is prohibited from making any false statements, no matter how small or seemingly insignificant. The agreement includes strict prohibitions against misleading or deceptive statements or omissions and stops PCH from discriminating between consumers who order product and those who do not by requiring the use of one sweepstakes entry form for all participants.
The settlement also includes increased safeguards to protect the most vulnerable PCH customers that may continue to be confused about whether buying products has any impact on their chances of winning.
For the first time in any settlement agreement, PCH acknowledges the harm caused by its past deceptive practices and apologizes for it.
The Oregon Department of Justice, over the last three years, has filed court settlements with other sweepstakes companies including American Express Publishing Company, U.S. Sales Corporation (United States Purchasing Exchange), Reader's Digest, Time, Inc. using the name of Guaranteed & Bonded, American Family Publishers and Seta Corporation.
A settlement administrator, in the next several weeks, will contact Oregon consumers eligible for restitution. Consumers wanting more information on sweepstakes and contests 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. Details also are online at www.doj.state.or.us.
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