Sweepstakes suits joined by Nevada

Tuesday, Feb. 1, 2000 | 10:12 a.m.

CARSON CITY -- The state attorney general's office filed suit in District Court in Las Vegas Monday against the giant Publishers Clearing House, accusing it of enticing consumers to buy magazine subscriptions with the false promise they may have won big sweepstakes prizes.

Nevada joins a parade of states taking on the company that sells magazine subscriptions and other merchandise through direct mail solicitations sent to millions of homes nationally.

Deputy Attorney General Jo Ann Gibbs said it is not known how widespread the violations are in Nevada. She said the number of persons who were misled won't be known until the state starts taking depositions.

But she said there is a $2,500 civil penalty for each violation. And if the deception involved a senior citizen or disabled person, the fine would be $10,000.

The suit asks the District Court to stop the clearinghouse from "deceptive and unlawful trade practices" in its sweepstakes promotions and to award restitution for all consumers who have been victimized.

Last year several states sued the clearinghouse, which assured them they would discontinue their deceptive practices. Nevada was not one of them.

This time around, Gibbs said, nine states sued within the last few months, and 16 state actions were filed a week ago. All contain similar allegations.

The clearinghouse, according to the suit, gets customers by deceiving them into believing they are more likely to win a large cash prize if they place a subscription order.

The company uses deceptive advertising or solicitations with titles such as "Best Customer Prize Notification" and "Red Alert Notice," which imply the recipients are in line for large cash winnings, says the suit.

The attorney general's office alleges the company misrepresents itself as having a personal relationship with consumers, leading these people to believe that a multimillion-dollar prize is about to be theirs. And the sales campaign is often directed at senior citizens who may be unfamiliar with the latest sophisticated marketing techniques.

"You never have to pay to enter a sweepstakes," Attorney General Frankie Sue Del Papa said. "Unfortunately, many people, including senior citizens, still believe that a purchase helps the odds of winnings. These types of deceptive sweepstakes solicitations further encourage that belief."