Current:Home > BackPublishers Clearing House to pay $18.5 million settlement for deceptive sweepstakes practices-DB Wealth Institute B2 Expert Reviews
Publishers Clearing House to pay $18.5 million settlement for deceptive sweepstakes practices
View Date:2025-01-11 07:19:27
Publishers Clearing House agreed to pay out $18.5 million for "deceptive and unfair" sweepstakes practices and change several of its business tactics, the Federal Trade Commission said in a news release on Tuesday.
A proposed court order filed in the U.S. District Court for the Eastern District of New York stipulates that the publishing company needs to make substantial changes to how it conducts its sweepstake drawings and entries online. Mostly older and lower-income consumers are lured to the Publishers Clearing House sweepstakes by catchy language on the company's website such as: "WIN IT!," or "Win for Life!," an FTC complaint said.
Some are lucky: one Pennsylvania-based woman won a $1 million dollar sweepstake prize. Others hope to win money in the sweepstakes and keep purchasing products or paying fees to increase their limited chances, court documents said.
After hopeful customers click on sweepstakes registration links emailed to them by the company, they are directed to several web pages of advertisements for products, including magazine subscriptions, the complaint said. These pages say messages like "$1,000 per week for life AT STAKE!" and "JUST ONE ORDER IS ALL IT TAKES," the news release said.
Consumers interested in entering sweepstakes contests are led to believe "they must order products before they can enter a sweepstake" or that "ordering products increases their odds of winning a sweepstake," the complaint said. One California based-woman thought she won a $5,000 prize, but the company blamed a "technical malfunction" and said that under "official rules" she didn't win and they weren't responsible.
"Today's action builds on previous efforts to crack down on companies that use illegal dark patterns to fuel digital deception and harm consumers," FTC Chair Lina Khan and commissioners said in a statement.
Once consumers enter their email addresses they continue to receive alerts from the company saying that they must take another step to be eligible for sweepstakes prizes, the complaint said. In addition to these misleading practices, Publishers Clearing House hid shipping and handling costs from consumers until there was a financial obligation. While the company also maintained they didn't sell or rent consumer data, the FTC alleges they did as such until around January 2019, when Publishers Clearing House learned they were being investigated, according to court documents.
"While we disagree with the FTC's assertions and have admitted no wrongdoing, we agreed to settle this matter in order to avoid the ongoing expense and distraction of litigation," Christopher Irving, the company's Vice President for Consumer and Legal Affairs, said in a statement.
"The integrity of our sweepstakes prizes and awards was never questioned. We worked hard to address any issues the FTC raised," Publishers Clearing House said.
The $18.5 million dollar fund will be used to refund consumers and implement promised changes to Publishers Clearing House's business practices. These changes include making clear disclosures on their sweepstake entry web pages, stopping surprise fees and shipping charges and stopping deceptive emails, court documents said.
- In:
- Federal Trade Commission
Cara Tabachnick is a news editor for CBSNews.com. Contact her at [email protected]
veryGood! (83)
Related
- Stock market today: Asian stocks dip as Wall Street momentum slows with cooling Trump trade
- The Excerpt podcast: Specks of plastic are in our bodies and everywhere else, too
- 'Everyone walked away with part of themselves healed' – 'The Color Purple' reimagined
- How a 19th century royal wedding helped cement the Christmas tree as holiday tradition
- Don't Miss This Sweet Moment Between Taylor Swift and Travis Kelce's Dads at the Kansas City Chiefs Game
- Seattle hospital says Texas attorney general asked for records about transgender care for children
- Despite backlash, Masha Gessen says comparing Gaza to a Nazi-era ghetto is necessary
- As interest peaks in tongue-tie release surgery for babies, here's what to know about procedure
- Deion Sanders doubles down on vow to 99-year-old Colorado superfan
- Pacific storm that unleashed flooding barreling down on southeastern California
Ranking
- Burt Bacharach, composer of classic songs, will have papers donated to Library of Congress
- A British sea monitoring agency says another vessel has been hijacked near Somalia
- TikToker Allison Kuch Gives Birth, Welcomes First Baby With NFL Star Issac Rochell
- Travis Kelce's Shirtless Spa Video Is the Definition of Steamy
- Fire crews on both US coasts battle wildfires, 1 dead; Veterans Day ceremony postponed
- Some Catholic bishops reject Pope’s stance on blessings for same-sex couples. Others are confused
- One person was injured in shooting at a Virginia hospital. A suspect is in custody
- Report: Dodgers agree to 12-year deal with Japanese pitcher Yoshinobu Yamamoto
Recommendation
-
After Baltimore mass shooting, neighborhood goes full year with no homicides
-
Residents of Iceland village near volcano that erupted are allowed to return home
-
Still haven’t bought holiday gifts? Retailers have a sale for you
-
ICHCOIN Trading Center: Cryptocurrency Payments Becoming a New Trend
-
Federal judge orders Oakland airport to stop using ‘San Francisco’ in name amid lawsuit
-
Rules aimed at long-contaminated groundwater drive California farmers and residents to court
-
Military command ready to track Santa, and everyone can follow along
-
Despite backlash, Masha Gessen says comparing Gaza to a Nazi-era ghetto is necessary