You're A Big Winner! (Not)

Some 43 million Americans heard from the sweepstakes giant, the Publishers Clearing House, in recent weeks. But alas, not from the Prize Patrol, bringing big winners their champagne, flowers and $10 million checks. Instead, you got a fold-out, legalist notice with print so small it drove me (sob) to a magnifying glass.

The mailer announced that PCH had settled a private class-action lawsuit, charging 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. (At the pointed suggestion of some state attorneys general, PCH will send a second, simpler notice and claim form to around 200,000 of their biggest customers this week, explaining what the earlier mailer was all about.)

Ongoing war: PCH's global settlement--the first by a sweepstakes company--is only the latest surrender in an ongoing war. Similar class actions are pending against American Family Publishers (AFP is half owned by Time, Inc.), Time's own "Guaranteed & Bonded" sweepstakes and Reader's Digest, among others. Many states are pressing lawsuits of their own (NEWSWEEK, which runs a small sweeps, hasn't been included).

Junk mail from a sweepstakes promoter seems to address you personally, and makes it sound as if the money is about to be in your bank account.From PCH: "You are scheduled to win the $1,000,000.00 SuperPrize at 6 PM on Thursday, August 20. From AFP: "We have reserved an $11 million sum in your name--You have exactly 5 business days to claim it." (NEWSWEEK's language: "You're Our #1 Top Winner in this Sweepstakes...With a Cash Prize of $100,000.00.") The letters all say you'll get the money only "if you have and return the winning entry," or words to that effect. But last year 25 trusting souls flew to AFP's processing center in Tampa, Fla., to collect their cash.

In recent years, a handful of people have brought private lawsuits, demanding the millions they believed were theirs. "They always lose," says PCH chief executive Robin Smith. Unanimously, the courts have said that no reasonable person could conclude that these bulk-mailed letters constitute a promise to pay. The class-action suits, however, seem to be more of a threat.

If sweepstakes players lost only their illusions, no one would pay much attention to what they hope or believe. 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: magazine subscriptions, 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. The letters all say "No Purchase Necessary" in more than one place.

But thousands of people still believe that a purchase helps, and some of the mailers encourage that idea. They might list your past orders, and say that you're meeting the criteria for winning--or imply that you haven't ordered enough. Nonbuyers might have to use a reply envelope that says, "No Reward Entitlement." Only a small percentage of buyers are misled. But small percentages add up to a lot of bucks.

Older people make up a disproportionate number of players. Dick Clark and Ed McMahon speak for AFP, so you know that they're not targeting Generation X. In 1997, 500 Maryland seniors collected their mail solicitations for a month, at the request of Attorney General J. Joseph Curran Jr. More than 10,000 pieces were turned in. Sweepstakes accounted for nearly half.

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. The more she buys, the more solicitations she gets. She's told she's reaching a higher status in the game--so she buys more. 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.

That's where the class-action lawsuits and state attorneys general come in. It's one thing for people to get a kick out of entering sweeps, while buying some magazines they want to read. It's quite another if the mailers mislead or the players can't understand the game. Even McMahon and Clark are being called to account. Florida sued them; they admitted no wrongdoing; in a settlement, AFP paid $20,000, in their names, to the Muscular Dystrophy Foundation. (Lawyers for Clark and McMahon had no comment. AFP says they're still representing the company.)

The companies deny the charges, and say they're working within the law. But all the bad publicity is depressing sales, leading the top mailers to negotiate a peace. Smith says PCH is adding more disclosures to its Official Rules--including the odds of having the winning ticket (generally, 50 or 60 million to one). In the past two years, it 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 those who spend $500 or more a quarter, and will print its Official Rules in something larger than flyspeck type. Keeping up the pressure, the Senate just passed a modest disclosure bill introduced by Republican Sen. Susan Collins of Maine.

Obviously, most sweepstakes players know bulk mail for what it is. 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.

Don't pay to enter a sweeps. Enter free, and spend your thrills money on a lottery ticket instead. The odds are generally better than they are for sweeps, and you aren't stuck with figurines.