Tuesday, April 14, 1998 | 10:19 a.m.
An 81-year-old volunteer clown feels like a fool.
Victor Flores, who enjoys donning a clown costume and amusing children at Sunrise Hospital, found no humor in a story that American Family Publishers seemed to be trying to convince everyone in America that each of them is the sole winner of a $10 million sweepstakes.
"Over the last two years I've spent $300 on magazines," said the retired food service worker, one of many who apparently failed to read the small print in big-bucks give away and misunderstood the advertising campaign of the Jersey City, N.J., company.
Thinking that ordering magazines advertised in the sweepstakes entry packet sent to tens of millions of potential subscribers and contest entrants would increase his chances of winning, Flores says he has signed up for between 35 and 50 publications.
He never reads them, just orders them and tosses them into a pile where they gather dust.
"They say no purchase is necessary, but there's got to be a purchase necessary, else how could they make any money?" reasoned Flores, whose wife, son-in-law and many friends also have ordered more than their share of magazines.
Kevin Kettleson, 48, Flores' son-in-law, says he, too, has bought a number of magazine subscriptions over the past five years, though not as many as his father-in-law.
"I only subscribed to the ones I wanted and when it came time for renewal, I didn't," Kettleson said.
He said he warned Flores his chances of winning weren't good. But Flores was absolutely certain he was THE winner several times.
"I got 10 to 15 notices where I won between $10 and $11 million if I had the winning number, but I never could find the number," he said.
On at least one occasion he and his wife, Dominica, 79, sat home all day waiting for Ed MacMahon or Dick Clark or whomever was going to show up for a celebration that was to be hosted by American Family Publishers.
"They were supposed to supply the champagne and food and everything," Flores said.
He got the impression there was going to be a party at his house from a form inside the entry packet.
"On the form you tell them what you want at the party and mail it back to them," he said.
Flores learned recently that American Family Publishers, which has been in the sweepstakes business about 20 years, reached an agreement with the attorneys general of 32 states and the District of Columbia last month to change its advertising method and to divide $1.2 million among the states for their "inconvenience."
Nevada's cut is $50,000.
"The $50,000 is for our inconvenience and in lieu of further litigation," said Deputy Attorney General JoAnn Gibbs of Las Vegas, whose office got involved in a national movement to force American Family Publishers to change its advertising techniques in February.
Flores has realized he will never win $10 million from American Family Publishers, but when he learned about the $50,000 settlement he thought he might at least get back the $300 he spent on magazines as well as money spent on miscellaneous items such as stamps.
But the settlement goes into the state's general fund, not to folks like Flores.
His only hope of recouping his money is to join a class-action lawsuit.
One has been filed by Georgetown University law professor George Peller, a public interest attorney appalled at the scope of the sweepstakes advertising that he believes has mislead millions of consumers like Flores.
He was one of the leaders in initiating action against American Family Publishers.
He said when he recently announced his class-action lawsuit, he received calls by the thousands. There were so many in one day that his phone lines were overwhelmed.
He now has a toll-free number for those interested in his class-action suit: 1-800-998-3469.
Peller says the class of subscribers who potentially could benefit from a lawsuit number between 35 and 45 million people.
If they won, the settlement could be in the billions of dollars.
"New Jersey allows for punitive damages so we're asking for triple damages," said Peller, who received one of the sweepstake packages in the mail and actually felt compelled to hurry up and enter so he could collect his $10 million.
Peller said he wants the company to stop the way it does business.
His lawsuit has nothing to do with the settlement with the attorneys general.
Gibbs said the state attorney general's office received a few complaints about the misleading advertising and so got behind the National Association of Attorney's General (NAAG), a consumer fraud organization, to try and negotiate an end to the method of advertising.
It was the NAAG who negotiated the agreement with the sweepstakes company.
"American Family Publishers didn't want to litigate," Gibbs said.
Margot Dewitt, spokesman for American Family Publishers, described the agreement as a "cooperative agreement that had nothing to do with the settlement of a lawsuit."
She said the company was "pained to hear that even a small number of consumers said they misread two of our recent promotions, so we voluntarily withdrew them.
"The vast majority of people who enter our sweepstakes do not purchase magazines," Dewitt noted. "The integrity of the American Family Publishers sweepstakes has never been questioned."
Dewitt said the agreement it reached "serves the interest of all consumers."
She called the attorneys general from the 32 states and District of Columbia as "the nation's leaders who have fully reviewed our practices and have resolved our outstanding issues."
Peller's analysis of the agreement is a little different.
He says the states who settled sold out.
"A lot of people call us telling us their grandmother has spent thousands of dollars on subscriptions," Peller said. "This really is a fraud."
In one case, he said, an elderly woman spent more than $90,000 on magazine subscriptions.
"Many have spent over $10,000," Peller said.
He said his goals are to have all of the consumers' money returned to them and to prohibit the kind of advertising practices engaged in by American Family Publishers.
Dewitt denies any accusations of fraud.
And to show the company's good intentions, she said, it has taken a number of actions beyond those agreed upon with the attorneys general.
"We have voluntarily taken action to help ensure consumers fully understand the rules," she said.
In the near future the company plans to set up a toll-free number and an Internet website for consumer information.
"The company is also setting up a system whereby we will mail a personal letter to those who seem to be buying an exceptionally large number of magazines reminding them no purchase is necessary to enter the sweepstakes," Dewitt said.
She said there seems to have been some confusion in the past.
"Some people thought that for some reason if you bought magazines that would increase your chances of winning. That has never been the case," she said. "It has always been no purchase necessary to win."
Also, she said, all entries will be processed at the same location in Tampa, Fla.
In the past, entries with magazine orders went to one city, entries without orders went to another, which reinforced the belief one had to order magazines to win.
"The company prides itself in having awarded over 250,000 prizes and $70 million in cash in the last two decades," Dewitt said.
Flores calls his experience with the sweepstakes "sickening."
"I was certain I had won," he said. "The way they had it written some guys would come from Florida and bring me $10 million."
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