Publishers Clearing House to Pay Consumers $18.5M for Misleading Business Practices, FTC Says

Publishers Clearing House (PCH) has agreed to compensate customers affected by its “misleading” business practices $18.5 million, according to the Federal Trade Commission (FTC).

PCH — famous for surprising winners at their front doors with giant checks and balloons — must substantially change its business practices, the FTC said.

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The agency says PCH made it seem as though customers needed to purchase a product on the PCH website in order to be eligible to win or to better their chances of winning a prize.

It did so using what the FTC calls “dark patterns,” referring to “manipulative phrasing and website design,” to manipulate people into spending money. The complaint asserts that these manipulations included presenting a big button with the words “Win it!” Customers who click on the button — thinking doing so will allow them to enter the sweepstakes — then “enter an arduous journey through pages of advertisements and sales pitches,” and are given deceptive messages such as “JUST ONE ORDER IS ALL IT TAKES,” before they can actually enter.

The FTC's examples of manipulative content on the Publishers Clearing House website.

Publishers Clearinghouse

The FTC says the company sometimes added surprise shipping and handling fees to purchases that averaged more than 40 percent of the product costs; called purchases “risk free” when unsatisfied buyers would in fact be responsible for paying return shipping; and, before January 2019, “misrepresented its policies on selling users’ personal data to third parties.” PCH’s privacy policy at the time stated that it did “not rent, license, or sell” consumer data to third parties.

Penalties and required changes

As part of the settlement, PCH will pay $18.5 million to compensate affected customers, though the FTC has not announced how the money will be disbursed and at the time of publication had not responded to requests for comment on this point.

PCH also has to change how it does business, including:

• Making shipping and other fees clear before a consumer purchases an item.
• Deleting consumer data collected before January 2019 and making clear the extent to which it collects and shares consumer information.