Publishers Clearing House issuing consumer refunds worth $18.5M after FTC finds it used ‘deceptive' practices
Maybe you've seen the eye-catching sweepstakes ads and commercials where regular folks are holding massive checks from Publishers Clearing House. And maybe seeing those huge amounts made you want to enter for your own big chance at winning.
But while Publishers Clearing House (PCH) is sending checks, it's not to sweepstakes winners.
PCH will send a grand total of $18.5 million to 281,724 recipients as part of a refund to consumers. The company settled with the Federal Trade Commission (FTC) and agreed to pay the money because of accusations that it made misleading claims to the public.
What exactly was PCH accused of misleading consumers about and what will happen to the company?
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The FTC complaint against Publishers Clearing House alleges that the company was targeting lower-income and older consumers and misleading them into believing either that they can't enter their sweepstakes without purchasing a product or that entrants could increase their chances of winning by buying these products.
What's more, the FTC complaint also noted that PCH added shipping and handling fees that were deceptive and 'misrepresented that ordering was 'risk-free,' even though consumers who wanted refunds had to return products at their own expense.'
The company also allegedly sent emails with subject lines that were deceptive and designed to make it look like it was related to "official documents."
Consumers entitled to the payout are those who clicked on these 'deceptive' emails and who purchased a product from the company.
While there is no clear timeline on when checks should arrive, the FTC encourages consumers to cash them within 90 days.
Earlier in April, PCH filed for bankruptcy. It entered into proceedings with around $490,000 in cash and around $40 million in debts to its vendors, employees, landlords and service providers.
PCH still owes about $1.8 million to current prize winners and about $26 million over the next 60 years to those who won lifetime prizes.
Back in 2018, the company earned about $879 million, but it started losing significant money soon after partly due to a shift in consumer preferences to online shopping that escalated during the COVID-19 pandemic. The company has since scaled back on its print marketing efforts.
Beginning in 2024, PCH earns revenue from digital advertising on free-to-play online games that offer consumers a chance to win cash prizes.
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Sadly, Publishers Clearing House isn't the only company that has recently been accused of misleading consumers.
The California Attorney General sued ExxonMobil for allegedly deceiving Californians for 50 years.
The company is the largest producer of single-use plastics in the world and the California Department of Justice alleges that the company has published misleading statements and slick marketing materials promising recycling would address the amount of plastic waste it produced.
Burger King is another company under similar scrutiny.
A class action lawsuit filed in March 2023 claimed Burger King misled customers through its ads of the Whopper. The lawsuit alleges the ads made it seem that the burgers contained 35% more meat than is actually in the product.
The fast food chain tried to dismiss the lawsuit, but a federal judge denied the motion on May 5, allowing the lawsuit to move forward.
If you believe you've been misled by a company, your first step is to contact the company yourself, keeping track of all communication. In an ideal situation, you can try to resolve the issue directly. Provide any proof or documentation to back up your claims of exactly how you've been misled.
If you need to escalate the matter, many states have consumer protection agencies that may be able to help. Many of these can help you with investigating complaints and mediation. Keep in mind, you may not be the only one with this complaint.
You can also file a complaint directly to the FTC, as it collects any information about unfair or deceptive practices. The data can be used to help take action against the business if necessary. You can file a complaint at ReportFraud.ftc.gov and set up a system to track any similar complaints against the company in the news.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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