The season of hope and hype: It's sweepstakes time American mailboxes have been filling with invitations to instant wealth

THE BALTIMORE SUN

There are nine zeros in $10,000,000.00. Nine lovely zeros, i you include the cents.

You can write it with fewer zeros -- $10 million, say -- but it isn't nearly as enticing.

Publishers Clearing House knows that -- it seldom drops a digit. Neither does American Family Publishers. And neither do the hordes of imitators filling your mailbox with zeros this month.

It's January, sweepstakes time in America, the biggest giveaway month of the year.

But it's not charity.

You can make a lot of money giving away money in America. Consider Publishers Clearing House, the oldest and best-known sweepstakes operator. The magazine subscription agency says it has given away $53 million in prizes since 1967, when its contest started. But the privately held, Port Washington, N.Y.-based company boasts annual sales "in excess of $100 million."

In the words of New York Times columnist William Safire, you must be "demographically dead" if you have not received an overstuffed envelope from Publishers Clearing House proclaiming you a "finalist" in its winter giveaway.

The letters cajole, beg and warn you not to throw away your chance. "You could actually be holding $10,000,000.00 in your hands THIS VERY MOMENT and lose it all because you didn't register your prize numbers," writes the company, whose contest will end with a Jan. 29 national announcement of the $10,000,000.00 grand prize number. "Don't let someone else walk off with your millions."

There are widespread suspicions about such sweepstakes -- that money isn't really given away, or that you can't win unless you buy a magazine subscription.

Apparently, these suspicions are unfounded. Consumer protection officials say the Publishers Clearing House sweepstakes, as well as those of rival American Family Publishers, are run in accordance with the law. And there are living, breathing winners who didn't buy any magazines.

Nevertheless, some tactics employed by Publishers Clearing House and other sweepstakes operators come perilously close to the line between permissible hype and illegal deception, say consumer protection officials and postal authorities.

For example, mailings are filled with not-so-subtle hints of

preferential treatment for those who order magazines -- something that would turn a sweepstakes into an illegal lottery if it were true. And recipients are warned that they might be dropped from future sweepstakes if they don't order -- a tactic that has aroused the concern of consumer protection authorities.

For many recipients, a sweepstakes mailing is no more than postal pollution, but for millions of others it's an invitation to a dream. Instant wealth, luxury cars, liberation from 9-to-5 drudgery.

Sure, the odds are long -- an estimated 1 in 1.5 billion for a $10 million grand prize, according to a Publishers Clearing House filing with New York state for a giveaway ending in January 1995. But isn't that better than having no chance at all? And people actually win.

Bob Castleberry, a former sales manager in Denton, Texas, returned his entry form in 1989 and won the grand prize with a number that was reassigned to him after some cynic failed to return an entry form.

Mr. Castleberry took his winnings, retired early and ran for mayor of Denton, a city of 68,000. He won the election. Now he owns a Rolls-Royce, a couple of ranches and is serving his second term. Oh, and he didn't buy a subscription.

Indirect benefits

Even for those who haven't won, it's not hard to argue that the Publishers Clearing House Sweepstakes has its role in the economy.

Magazines need readers. Publishers Clearing House finds readers for magazines. So, Publishers Clearing House not only helps magazines survive, but also promotes reading. And if it takes a little razzmatazz to create a more literate America, so be it.

"I think the general public is aware that it is just a promotional tool," said Michael Pashby, senior vice president of the Magazine Publishers of America.

Contestants often complain that the Publishers Clearing House mailing is too complicated -- with multiple contests to enter and stamps to be stuck in just the right place. But the company says simplified packages have been less effective in getting consumers involved with the sweepstakes and motivated to buy magazines.

If Publishers Clearing House makes a sale, it typically collects the initial subscription price as its commission, according to David Sayer, executive vice president for advertising and public relations. The company isn't paid by magazines to include them in its packets and doesn't sell or rent its mailing lists, he said.

Magazines included in the sweepstakes packets find themselves elite company. Publishers Clearing House represents such highly regarded publications as The Atlantic, Forbes, U.S. News & World Report and Consumer Reports.

Still, an association with Publishers Clearing House and American Family Publishers is a topic that makes some publishers uncomfortable.

Consumer Reports, a magazine with a reputation for scrupulous consumer advocacy, is re-evaluating its participation after wording in the Publishers Clearing House mailings was brought to its attention last week, said David C. Berliner, assistant director of Consumers Union, the magazine's publisher.

"The reality is that all legal controls are in place and regulations are being adhered to," he said. "But perception is very important to us. As a result, we have spoken by phone with executives at Publishers Clearing House and will be meeting with them to review the materials."

Other consumer watchdogs are sniffing around Publishers Clearing House, too. There are no actions against the company, but officials look askance at some of its practices.

John Brugger, a spokesman for the U.S. Postal Inspection Service, said Publishers Clearing House's offer of "express entry" to those who place an order could raise questions under federal law, which requires sweepstakes to offer the same odds to buyers and nonbuyers.

"The suggestion clearly is that there's some sort of benefit to the contestant from getting the express service," Mr. Brugger said. Tampa, Fla.-based American Family Publishers also uses the tactic.

Representatives of the attorney general's offices in Maryland and two other states also said sweepstakes that offer "express entry" could violate consumer protection laws.

"Certainly the message they're trying to convey is to induce you into making a purchase," said Rebecca Bowman, director of the complaint handling unit of the Maryland attorney general's office.

Mr. Sayer of Publishers Clearing House disagreed. He said the express entry offer doesn't give any advantage in the sweepstakes -- and isn't intended to imply that it does. The "express" advantage refers to processing subscriptions, he said, adding, "We haven't had any complaints about it."

Publishers Clearing House and American Family Publishers could face problems on another front.

An 'illegal lottery'?

"Some of the companies are now saying that if you don't order, you will be taken off their mailing list," said Herschel Elkins, head of the Consumer Law Section of the California attorney general's office. "That comes very close to being an illegal lottery."

Publishers Clearing House has faced that allegation before, said Craig Jordan, an assistant Texas attorney general. In 1989, he said, the company reached an agreement with the Texas agency that it would stop making that representation. But state officials are dissatisfied with the company's compliance and are holding further discussions with the company, Mr. Jordan said.

Mr. Sayer said the company is complying with the agreement and is not aware of any problems.

These controversies might not amount to much. Potentially misleading statements in sweepstakes offerings don't rank high on the list of law enforcement priorities when officials are faced with hundreds of costly consumer scams.

Still, there are concerns among consumer protection officials that questionable techniques popularized by Publishers Clearing House and American Family Publishers are borrowed by fly-by-night operators whose "contest fees" are outright frauds.

Mr. Sayer agreed that scam artists imitate the mailings but said the company was not responsible for that.

A spokesman for American Family Publishers was unavailable for comment.

A slight whiff of sleaze might actually help the companies. Mr. Sayer conceded that some people buy subscriptions in sweepstakes because they don't believe the disclaimers that no purchase is necessary to win.

And Marvin A. Jolson, a marketing professor at the University of Maryland at College Park, said the companies drop plenty of hints that those who place orders will win the prizes.

"There's a lot of little innuendo in the copy that would lead you to believe you're going to get some kind of prior attention," he said.

But don't try to tell that to those select few who are Publishers Clearing House's most staunch defenders: the grand prize winners.

"Those people are great folks. They do everything they say they're going to do and then some," Mayor Castleberry said. "They treat me like a king, and I surely do like that."

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