STATEMENT: Publishers Clearing House settles FTC lawsuit over deception

WASHINGTON – Publishers Clearing House has settled a lawsuit with the U.S. Federal Trade Commission (FTC) for $18.5 million over allegations the company tricked consumers into buying magazines and other items. The total includes more than $15 million in customer restitution. 

The FTC accused Publishers Clearing House, which has been known for decades for its sweepstakes and oversized check presentations, of using “deceptive and manipulative statements and user interface designs (sometimes referred to as ‘dark patterns’) to deceive consumers into believing that they must order products before they can enter a sweepstakes or that ordering products increases their odds of winning a sweepstakes.”

This is not the first time Congress or federal or state regulators have questioned PCH’s marketing practices. In 1992, for example, 14 states sued PCH for “misleading people into believing that they could increase their odds of winning a sweepstakes by purchasing items from PCH,” the complaint said. The company settled that case for $490,000. As the company has shifted from direct mail to online advertising, PCH.com attracts about 40 million unique visitors per month and has sales totaling about $1 billion per year, the complaint said.

Last week, the FTC sued Amazon, accusing the giant online retailer of using “dark patterns” to rope customers into recurring Prime subscriptions for $14.99 a month and make it extremely difficult to cancel. That lawsuit is not yet resolved.

In response, Teresa Murray, Consumer Watchdog at U.S. PIRG Education Fund, said: 

“There is no excuse for deceiving consumers. We’re glad the FTC isn’t afraid of going after the giants in any industry. 

“The FTC’s second lawsuit in a week over ‘dark patterns’ shows regulators are really cracking down on deception and manipulation online. This is great, but online threats to consumers won’t go away any time soon. People still need to be vigilant online, check their financial statements for unexpected charges and complain when there’s something wrong.”