Granholm sues Publishers Clearing House

The suit alleges that the company misleads consumers by making them believe they have won prizes or will win prizes if they buy goods from Publishers Clearing House.

"We want to send the message that this kind of nickel and diming of consumers is not going to be tolerated," Granholm said.

Christopher Irving, the director of consumer affairs for Publishers Clearing House, said he was "disappointed" to hear of the lawsuit. The suit comes after several months of talks between Granholm and six sweepstakes companies. Publishers Clearing House is the only company to be sued so far.

"We have attempted to sit down with the Michigan attorney general's office; we have continued to respond to all of their concerns in a comprehensive and responsible manner," he said. "We think that an agreement could have been reached and still could be reached with the state of Michigan."

Granholm said the suit is also an attempt to wrestle Michigan consumers out of a federal class action suit filed against Publishers Clearing House in Illinois.

As part of the class action, Publishers Clearing House is sending notices to everyone who has ordered from the company since 1992, or about 40 million households. The notice allows consumers to opt out of the class action by Oct. 18. If they don't opt out, they could be in line for a settlement from Publishers Clearing House.

Granholm says the problem with that deal is that Publishers Clearing House has set aside only about $4 million to settle any potential claims nationwide. That's not enough to give consumers a fair settlement, Granholm says.

"People should know this is a very bad deal," Granholm said.

Granholm said Publishers Clearing House also failed to notify the state about the class action in meetings this fall. Granholm found out about the class action notices when she got one in the mail.

Michigan is one of six states to file lawsuits against Publishers Clearing House, including Florida, Arizona and Connecticut. Michigan's lawsuit orders the company to end alleged deceptive marketing and pay restitution to consumers who bought goods believing it would improve their chances to win prizes.

The suit also orders Publishers Clearing House to pay up to $25,000 to the state for each alleged violation of the Michigan Consumer Protection Act.

Asst. Attorney General Stewart Freeman, the lead attorney in the case, said he doesn't know how many Michigan consumers would be eligible for restitution.

"This is the biggest promoter in the world and we know that they make a lot of money, so you can extrapolate that out," he said.

Freeman also objected to the class-action notice being sent to consumers, saying the attorney general's office has received complaints about its legal jargon and tiny print.

"This is a deliberate attempt to confuse consumers," he said.

Irving denied that charge, saying the class action notice was approved by a federal judge. Irving called it "fair and easy to read."

Irving added that Publishers Clearing House has taken great pains to make sure consumers understand sweepstakes policies.

This fall, the company voluntarily added a label to all mailings telling consumers they haven't yet won a prize and don't have to buy anything to enter the sweepstakes.

The company also conducts surveys of its most active customers and removes them from mailing lists if they seem to be confused about sweepstakes. More than 6,000 people have been removed through that program, Irving said.

Irving said that of the company's 30 millionaire winners, 23 didn't buy anything when they sent in their entries.

"We do believe that consumers believe that no purchase is necessary," he said.

10-13-99