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Publishers Clearing House Agrees to a Settlement

Aired June 26, 2001 - 22:01   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Good Evening. We begin tonight with the ads we have all seen. The nation's largest sweepstakes company has agreed to a $34 million settlement with 26 different states. The states said the company unfairly picked on certain people, and that must change. From Denver tonight, CNN's Gina London.

(BEGIN VIDEOTAPE)

GINA LONDON, CNN CORRESPONDENT (voice-over): Ethel Stroh was the type of person Publishers Clearing House targeted -- a senior citizen. Stroh is a widow living on a fixed income. She says she spent more than $10,000 dollars over the years trying to win sweepstakes, often buying products she didn't need in hope that the purchase would increase her chances of winning.

ETHEL STROH: Once I think I paid Publishers Clearing House about $60 or something for something -- a big book, or something. I've got so many books you can't believe it.

LONDON: While one person will indeed win, many more, like Mrs. Stroh, enticed by misleading claims like, "You are guaranteed to win," they are paying to play.

STROH: I would think, oh, my goodness, this sounds like it might be the time, the big chance, my big chance to win.

LONDON: Over a year ago 26 states filed suit against Publishers Clearing House calling for ban on so-called deceptive promotions. Tuesday, the nation's largest sweepstakes company agreed to change some of its practices and pay consumer restitution as part of a $34 million settlement. Colorado took a lead roll in the suit discovering that Publishers Clearing House did not send out its mailings at random.

KEN SALAZAR, COLORADO ATTORNEY GENERAL: Companies essentially look at those who are most vulnerable and they targeted senior citizens.

LONDON: Publishers Clearing House will now remove what are being called vulnerable customers from its lists. It must also better inform entrants that buying something will not enhance the odds.

The company issued a statement saying in part, "We listened to the state's concerns and have agreed to responsive and significant changes that will make our promotions the clearest, most reliable and trustworthy in the industry."

(on camera): This ban on deceptive practices does not go into effect immediately. In fact, it will take at least 90 days. In the meantime, Publisher's Clearing House may have already printed up its next batch of promotions saying you are a winner when you are not.

Gina London, CNN, Denver.

(END VIDEOTAPE)

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