1. Based on this information, do you believe Publishers Clearing House has committed fraud?
2. Why or why not?
A recent newspaper contained the following story:
Publishers Clearing House agreed to pay $34 million in a deal with 26 states to settle allegations the sweepstakes company employed deceptive marketing practices. The $34 million will cover customer refunds, legal expenses, and administrative cost to the states. Each state’s share has yet to be determined. In the lawsuits, state attorney generals 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.
As part of the settlement, the company will no longer use phrases like “guaranteed winner.” “This will in fact revolutionize the sweepstakes industry,” Michigan Attorney General Jennifer Granholm stated. “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 and CEO of the Port Washington, N.Y.–based company.
Publishers Clearing House reached an $18 million settlement last August with 24 states and the District of Columbia. The states involved in the latest settlement are: Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, North Carolina, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, West Virginia, and Wisconsin.