Publishers Clearing House Will Refund $18.5 Million to Customers for Deceptive Consumer Practices

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You probably remember the Publishers Clearing House (PCH) commercials where winners were presented with giant checks after winning the sweepstakes. The company is the subject of a recent lawsuit due to its business practices. The Federal Trade Commission (FTC) has been investigating PCH for suspected deceptive consumer practices. PCH has agreed to pay $18.5 million to consumers who spent money to try to win the sweepstakes.

The lawsuit alleges PCH used detective tactics to trick customers

A recent lawsuit against PCH alleges that the company used “dark patterns” and deceptive strategies to mislead customers about how to enter its sweepstakes drawings. By using manipulative phrases and website design, the company tricked customers. Many impacted customers were older, lower-income adults.

The FTC’s complaint notes that when the company included disclaimers or qualifying information, it was done with small, light font below call-to-action buttons. Because of this, the disclaimers were often overlooked by customers.

The lawsuit claims that PCH misled consumers in the following ways:

• PCh misled people to believe they needed to buy something to win or that a purchase would increase their chances of winning the sweepstakes.
• People were made to believe their sweepstakes entries were incomplete, even when they weren’t.
• The company sent emails with deceptive subject lines that led people to waste time and money by clicking on links.
• PCH added surprise shipping and handling fees that increase the price of customers’ orders by an average of 40%.
• The company charged customers shipping fees to return products, despite stating that the ordering process was “risk-free.”

PCH will provide customer refunds

PCH has agreed to settle the FTC’s charges. The company agreed to an $18.5 million settlement to provide customer refunds. But it’s worth noting that not every customer will be eligible for a refund. As part of the settlement, PCH will be required to overhaul its sweepstakes entry and sales process and agreed to make the following changes:

• No longer imply that a purchase is required to enter the sweepstakes.
• Clearly distinguish the entering and ordering process on all entry and order forms.
• Make clear, unavoidable disclosures on every shopping page that a purchase isn’t required to enter the sweepstakes and that purchasing will not help a consumer win, and include a link that takes consumers directly to a page where they can enter the sweepstakes.
• Clearly disclose the total price of an item for sale, including shipping and handling fees.
• Clearly disclose cancellation and return policies.
• Stop sending emails with deceptive subject lines.
• Delete all consumer data collected before Jan. 1, 2019, and be clear about how consumer data is collected and shared.
• Preserve records related to market, behavioral, and psychological research or user, consumer, or usability testing.

What you need to know about refunds

Any customer interested in a refund should await further instruction from the FTC. The agency warns consumers not to pay anyone who promises a refund and cautions them from providing personal information to anyone contacting them about a refund.

Unfortunately, some scammers may take advantage of the situation by trying to get consumers to give their personal information or provide their credit card details to pay a fee for a refund. The FTC never charges a fee to get a refund. It’s essential to be alert so you don’t fall victim to a scam that negatively impacts your personal finances.

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