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Publishers Clearing House to Pay Consumers $18.5M for Misleading Business Practices, FTC Says
PCH made it seem as though customers needed to purchase a product to win
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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.
The PCH site — which notes that you can “Win $10,000 a week for life!” — includes an “Act Now” button that takes you to a form topped with “It's FREE — Enter Now!” in bold, red print. (In very small print on a different page, you’ll find the odds of winning: 1 in 7.2 billion.)
“Today’s action requiring PCH to overhaul its user interface, compensate consumers for lost time, and stop surprise fees should send a clear message that manipulative design techniques are a no-go under our laws,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a news statement.
Levine noted that this is the second “dark pattern lawsuit” within a week, referring to the suit against Amazon, which the FTC says misled consumers into signing up for Amazon Prime.
Sweepstakes-related fraud
PCH is usually in the spotlight for another reason: Criminals love to use the company name in sweepstakes scams. These involve bad actors calling people and telling them they’ve won millions — they just need to pay a few hundred dollars (sometimes far more) in taxes or other fees (often in the form of gift cards) before receiving the cash.
Be aware that PCH and other legitimate sweepstakes/lotteries don’t charge players to claim their prize or ask for money up front. PCH notes on its site that it would never contact winners of its major prizes in advance; its Prize Patrol only shows up “live and in person” to surprise them. It adds, “For smaller prizes (usually less than $10,000.00), winners are notified by overnight delivery services (FedEx, UPS), certified mail, or email in the case [of] online giveaways.” Again, no purchase is necessary to enter or win a PCH prize, and no money is required up front.
As the FTC notes, “real prizes are free.”
Report sweepstakes and other scams to the FTC at ReportFraud.ftc.gov.
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