Publisher's Clearing House
From Wikipedia, the free encyclopedia
Publishers Clearing House (or PCH) is a direct mail marketing company, primarily focused on the sale of magazine subscriptions and inexpensive merchandise to consumers. As a direct marketing firm, it has no retail offices; its operations are concentrated in several physical offices, including its world headquarters in Port Washington, New York.
PCH is most strongly associated with magazine subscriptions, the "Prize Patrol", and a class action lawsuit regarding its marketing tactics.
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[edit] History
Publishers Clearing House was founded in 1953 by Harold and LuEsther Mertz and their daughter, Joyce Mertz-Gilmore.
At its inception, Publishers Clearing House focused on selling reduced-rate magazine subscriptions. Over time, PCH's focus shifted from selling magazines to inexpensive merchandise such as household items, personal care products, music, videos, DVD’s, etc.
In the 1990s, controversy arose over allegations that Publishers Clearing House's marketing techniques deliberately mislead customers. Later lawsuits would allege that PCH profited greatly from “…misleading consumers into believing they had already won millions or that buying magazine subscriptions would better their chances of winning…" [1]
An investigation sparked by a lawsuit against Publishers Clearing House in Iowa determined that “… more than 1,900 Iowans had purchases of $1000 or more from PCH in 1996 or 1997, or possibly both, according to PCH's own records. [Also] 289 Iowans made purchases of $2500 or more in one or both of those years. [Another survey by the same office] of almost half of those Iowans revealed that 83% were age 65 or older.” [2]
[edit] Class action lawsuit and settlement
Class action lawsuits were filed in 26 states against Publishers Clearing House with the aid of consumer protection agencies. The lawsuit was settled between PCH and many of the states. PCH, by terms of the settlement, ended up paying $34 million. The settlement included that “… PCH (would) also … pay $13 million for consumer education, costs and attorneys' fees, $1 million for civil penalties and $1 million for the administration of the restitution.”
Other terms as part of the settlement include:
- The phrases: "You Have Not Yet Won. All Entries Have the Same Chance of Winning...", "Enter for Free. You don't have to buy anything to enter....", and "Buying Won't Help You Win. Your chances of winning without a purchase are the same as the chances of someone who buys something." must now be located somewhere in each sweepstake mailing.
- Mandatory prevention of misrepresenting "how close" somebody is to winning. It follows that PCH shall not lead someone to believe that the "Prize Patrol" is going to visit them soon. PCH is also forbidden from simulating attention to a specific person (i.e., a check made out to John Smith) or that a letter needs "Urgent Attention".
- Universal entry form. (Previously, people who had not ordered received a small entry form; people who did order received a more elaborate entry form with colors, etc.)
This settlement went under review and was accepted by the attorneys general of Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, North Carolina, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, West Virginia, and Wisconsin.”
Publishers Clearing House is one of the best-known and used clearing houses today. Mailing regions have expanded past the continental United States to Canada and the United Kingdom, and has attained a sizeable Internet presence.
[edit] PCHBlingo
Publisher's Clearing House has recently (July 2006) teamed up with internet search engine Blingo (www.blingo.com), a website that gives away prizes should users enter a search at the correct time.
