Oklahoma, 25 other states sue Publishers Clearing House

Tuesday, January 25th 2000, 12:00 am

By: News On 6

ALBANY, N.Y. (AP) -- Publishers Clearing House surprises its sweepstakes winners with its annual Super Bowl Sunday "PrizePatrol." The Port Washington company got a surprise of its own Monday as 16 states, including Oklahoma, broke off settlement negotiations and sued it for misleading consumers into believing they had a better chance of winning if they ordered more products.

"We are dismayed and disappointed that New York has chosen to abandon negotiation and proceed with legal action against our company," said Bill Low, lawyer and senior vice president for the sweepstakes company. New Mexico Attorney General Patricia Madrid said states had to file suit against the company "to put an end to its false, misleading and deceptive mailings that induce New Mexicans, and particularly our senior citizens, to purchase items that they do not truly want or need."

Also suing Monday were Colorado, Minnesota, North Carolina, New Jersey, Illinois, Ohio, New York, Vermont, Oregon, Pennsylvania, West Virginia, Louisiana, Georgia and California. "Publishers Clearing House is very artful in stating half-truths to create an overall impression that the particular consumer will be more likely to win an enormous cash prize if he or she purchases something," Minnesota Attorney General Mike Hatch said.

Oklahoma Attorney General Drew Edmondson filed a lawsuit in Oklahoma County District Court, alleging that the sweepstakes company's promotional activities are deceptive, misleading, have targeted vulnerable consumers and violated Oklahoma law. Those vulnerable consumers include elderly people and those with poor vision or diminished reading or cognitive skills, Edmondson said.

Publishers Clearing House repeatedly mails its sweepstakes offers to them, he said. "Their direct mail pieces make people believe that they have won or about to win huge sums of money, when in fact they almost never do," Edmondson said in a news release. The lawsuits were filed individually in local courts in each state. However, New York Attorney General Eliot Spitzer said the lawsuits were sparked by a multi-state investigation. "This sweepstakes company has engaged in an elaborate scheme to increase its bottom line, financed on the backs of some who can least afford it: the elderly," Spitzer said.

That brings the number of states suing Publishers Clearing House to 25. Arizona, Texas, Connecticut, Florida, Indiana, Michigan, Missouri, Washington and Wisconsin already have sued the company. Pennsylvania Attorney General Mike Fisher agreed with Spitzer. `The company's alleged illegal business practices shamelessly prey on older Pennsylvanians who spend a lot of money on magazines and other items ... convinced that the Prize Patrol is about to deliver thousands of dollars to their door," he said.

"Publisher's Clearing House for years has been targeting the elderly and the gullible with a blizzard of deceptive mailers that are really disguised sales pitches," California Attorney General Bill Lockyer said. Publishers Clearing House spokesman Chris Fisher denied it targets senior citizens. "Publishers Clearing House does not target the elderly," he said. "We don't even know the ages of our consumers. ... Our market is the U.S. population."

The most recent lawsuit accuses the company of:
--Faking handwritten notes, internal memos, government documents and personal letters to get people to apply quickly.
-- Hiding bulk-rate mailings with official looking symbols and large bold print warnings.
-- Routinely asking customers for information that would only be needed if they actually had won a prize.
-- Requesting information for customers who order magazines that it does not ask from people who do not order magazines.

Spitzer and the other attorneys general want Publishers Clearing House banned from using its current promotions and for the company to pay unspecified restitution. Spitzer also wants civil penalties under the state's deceptive acts statute and the state Prize Award Scheme Law, as well as an additional $10,000 for violations of a state law enacted to penalize frauds perpetrated against the elderly.