Sweepstakes seek to make money, not give it away


ABOUT 43 million Americans heard from sweepstakes giant Publishers Clearing House in recent weeks. But, alas, not from the Prize Patrol bearing big winners their champagne, flowers and $10 million checks.

Instead, you got a fold-out, legalistic notice, with print so small it drove me to a magnifying glass.

The mailer announced that PCH had settled a class action lawsuit over deceptive practices. PCH denied all. But if you bought any products or magazine subscriptions from PCH, and think you were misled, the mailer explains how you might get a few dollars back. PCH's global settlement is the first by a sweepstakes company, but similar class actions are pending against American Family Publishers (AFP), Time Inc.'s "Guaranteed & Bonded" sweepstakes and Reader's Digest, among others.

Many states are pressing lawsuits of their own. (Newsweek, for which I also write, runs a small sweeps and hasn't been sued.)

Junk mail from a sweepstakes promoter seems to address you personally, and makes it sound as if the money is practically in your bank account. For example:

From PCH: "You are scheduled to win the $1,000,000.00 SuperPrize at 6 p.m. on Thursday, Aug. 20." From AFP: "We have reserved an $11 million sum in your name. You have exactly 5 business days to claim it." Last year, 25 trusting souls flew to AFP's processing center in Tampa, Fla., to collect the check they thought was theirs.

Most sweepstakes letters say you'll get the money only if you "have and return the winning entry," or words to that effect. But that's a warning some excited consumers overlook.

If sweepstakes players lost only their illusions, no one would pay much attention. But some of them are being teased into losing money, too.

Sweepstakes are offered as an inducement to get you to buy what the mailer sells: magazines, videos, CDs, jewelry, figurines, books, collectibles.

You don't have to buy anything to win. By law, every entrant has an equal shot at the prize.

But thousands of people, often elderly, still believe that a purchase helps, and some of the mailers encourage that idea, sometimes by implying that you haven't ordered enough. Only a small percentage of buyers are misled. But small percentages add up to a lot of bucks.

Here's the classic horror story: A niece visits her elderly aunt and finds rooms full of magazines, videos and figurines. The aunt keeps buying more, in hopes of bringing the Prize Patrol to her door.

Victoria Butler, an assistant attorney general in Florida, says the bulk of her complaints come from families whose gullible, elderly relatives are squandering their limited incomes.

In 1997, 500 Maryland seniors collected all their mail solicitations for a month for Attorney General J. Joseph Curran Jr. More than 10,000 pieces were turned in. Sweepstakes accounted for nearly half.

The class action lawsuits and the pressure from states have helped.

Sweepstakes companies deny that their mail offers are deceptive. But the bad publicity is depressing sales, leading the top mailers to negotiate a peace. PCH's chief executive officer, Robin Smith, says her company is adding more disclosures to its official rules -- including your odds of having the winning ticket (generally, 50 million or 60 million to one). In the past two years, PCH has called about 12,000 serial buyers and taken unsuitable people off the list -- for example, people who seemed confused or insist that they have to make purchases to win.

In a recent agreement with four states, AFP promised many more disclosures, too. Reader's Digest says it's writing to people who buy more than $500 a quarter, telling them that no purchase is necessary. It will also print its official rules in something larger than flyspeck type.

Keeping up the pressure, the Senate recently passed a modest disclosure bill introduced by Susan M. Collins, a Maine Republican.

Some commentators call the state actions trivial. Why waste time and money on people dumb enough to fly to Tampa for a mythical $11 million check?

On the other hand, what kind of business seeks profits from people who can't understand what they read? In the face of misleading marketing, regulators have to act.

Bottom line: Enter sweeps, if you love them, but never buy anything you don't really want.

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