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Posted: Wednesday, June 27, 2001 12:00 am

Sweepstakes company

reaches settlement

Lawsuit: States get $34 million.

The Associated Press

Publishers Clearing House agreed to pay $34 million in a deal with 26 states

Tuesday to settle allegations the sweepstakes company employed deceptive


As part of the settlement, the company will no longer use phrases like

guaranteed winner.

This will in fact revolutionize the sweepstakes industry, said Michigan

Attorney General Jennifer Granholm.

Publishers Clearing House will have to pay $34 million in customer refunds,

legal expenses and administrative costs to the states.

We listened to the states concerns and have agreed to responsive and

significant changes that will make our promotions the clearest, most reliable

and trustworthy in the industry, said Robin Smith, chairman & CEO of the Port

Washington, N.Y.-based company.

In the lawsuits, state attorneys general had accused Publishers Clearing House

of deceptive marketing for its sweepstakes promotions. The suit alleged that

the company was misleading consumers by making them believe they had won

prizes or would win if they bought magazines from Publishers Clearing House.

Publishers Clearing House reached an $18 million settlement last August with

24 other states and the District of Columbia.

In 1999, another sweepstakes company, American Family Enterprises, settled a

group of lawsuits for $33 million.

That company is known for the American Family Publishers sweepstakes plugged

by Dick Clark and Ed McMahon.

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