Publishers Clearing House Settles FTC's Claim of Misleading Consumers Through 'Dark Patterns' National Law Journal

Table Of Content

• FTC Announces Enforcement Action Against Publishers Clearing House for Use of Dark Patterns and CAN-SPAM Violations
• What Does Your Average Novel Sell?
• Publishers Clearing House to Pay Consumers $18.5M for Misleading Business Practices, FTC Says
• Government regulation and legal actions
• Publishers Clearing House Mailing Lists Class Action Lawsuits Overview:
• Case Timeline
• About the FTC

On top of paying $18.5 million, which the F.T.C. said it would use to refund customers, the company agreed to adjust its interface to prevent more confusion. Scams using the Publishers Clearing House name have gained significant attention from government entities. Postal Service have both published alerts informing consumers about signs of scams using Publishers Clearing House’s name.

FTC Announces Enforcement Action Against Publishers Clearing House for Use of Dark Patterns and CAN-SPAM Violations

One California based-woman thought she won a $5,000 prize, but the company blamed a "technical malfunction" and said that under "official rules" she didn't win and they weren't responsible. PCH used “deceptive and manipulative statements” and marketing tactics aimed at older and low-income consumers to get them to make unwanted purchases in hopes of a financial windfall later, the FTC claimed. The settlement, in which PCH admitted no wrongdoing, resolves the lawsuit the agency filed Monday in the U.S. The FTC had sued the company — which runs sweepstakes contests and is well known for surprising people on their doorstep with oversized checks — for allegedly using so-called dark patterns and other deceptive consumer practices like surprise fees. There’s a lot I think publishers could change, including focusing on big advance books and celebrity authors—Griffin is quite right that those acquisitions often go bust, especially with social media celebrities. Instagram and TikTok followers rarely translate to book sales.

What Does Your Average Novel Sell?

I'm guessing that the money comes from the money they make off of the purchases they try to get everybody to make. I suspect that's the reason they seem so hard pressed to sell all that stuff. It states clearly no purchase necessary to win and a purchase will not increase your chance of winning. People don't read any print, not just fine print and of course it's everyones fault but their own. PCH back in 1980 to 2023 I join PCH and paid for products from the PCH catalog and never wond anything. WARN, the state Worker Adjustment and Retraining Notification Act, requires that companies with 50 full-time employees or more file a notice of a mass layoff or a closing 90 days in advance.

PCH sued for 'dark' and 'deceptive' practices in Utah - ABC4.com

PCH sued for 'dark' and 'deceptive' practices in Utah.

Posted: Sun, 06 Aug 2023 07:00:00 GMT [source]

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

In the PCH case, the FTC claimed the company used "manipulative phrasing and website design" to convince consumers they needed to buy a product of some kind to enter the company's sweepstakes or increase their odds of winning. Still, I’ll be conservative and assume that 85 percent is the correct figure. This means that close to 900 million print books are sold to customers each year. Add in e-books and the quickly growing audiobook market, and the total number of new books sold is over 1 billion. And it does not include used book sales or library purchases.

Government regulation and legal actions

On June 27, the Federal Trade Commission (FTC) announced an enforcement action against Publishers Clearing House (PCH) in connection with the company’s long-running sweepstakes promotions. 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 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!

Publishers Clearing House Mailing Lists Class Action Lawsuits Overview:

The IDA did not address whether it would be clawing back any tax breaks. The We’Re Group received a 20-year deal on property taxes, in addition to a sales tax exemption of up to $1.4 million for construction materials and equipment to upgrade 300 Jericho Quadrangle. Publishers also received a sales tax exemption of up to $1.6 million on its purchases of equipment for the site. Publishers said the layoffs will not impact its sweepstakes, which have given out $593 million in prizes over the years. Do you believe that Publishers Clearing House has sold your personal information to other companies? In the summer of 2020 Marie Osmond became a spokesperson for Publishers Clearing House with television and online advertisements as well as direct-to-home mailings.In January 2021, Steve Harvey made his debut in television commercials as a spokesperson for PCH.

Case Timeline

The non-governmental Identity Theft Resource Center identified a 240% increase last year in scams pretending to represent PCH. In 2015, the Nassau County Industrial Development Agency awarded Publishers and its landlord, The We’Re Group, millions of dollars in tax breaks to keep the company’s headquarters and its more than 400 jobs in the county as part of a $37 million redevelopment project. The actual math of bookselling is complicated since royalty rates vary by format, price points can fluctuate, and big publishers have different distribution deals from small ones. That said, I’ll do a bit of simplistic napkin math to explain. For comparison’s sake, there were 825 million movie tickets sold in the U.S. and Canada in 2023. So, more books are purchased than movie tickets, two comparable entertainment options in terms of price.

Publishers Clearing House Agrees to Pay $18.5M Settlement for Deceptive Sweepstakes Practices - Inside Edition

Publishers Clearing House Agrees to Pay $18.5M Settlement for Deceptive Sweepstakes Practices.

Posted: Wed, 28 Jun 2023 07:00:00 GMT [source]

We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect. Many of the customers who fell victim to these tactics are older and have lower incomes, according to the suit, which was filed in U.S.

The class is proposed to be any Utah residents who had class their purchase information sold on or after January 1, 2004 after making a purchase and then had Publishers Clearing House sell that purchase information to a third party. The Millard County Sheriff’s Office said residents in central Utah are receiving calls from “PCH” claiming prize money. Officials said the company claims they have money for you, but that you need payment to release the funds.

Most new books in bookstores are selling, at a minimum, hundreds of copies and most of the time thousands. The popular ones are selling tens of thousands, and the breakout hits are selling hundreds of thousands or even millions. And within any of those numbers, the statistics vary wildly by type of book. When people talk about movie revenue, they’re probably restricting themselves to feature films released in theaters or movies streaming on big platforms like Netflix.

And books are certainly not at the center of culture in the way they were before TV and social media and all the rest. Again, I’m not saying all is great in publishing land. Certainly, I wish that the novels I love were selling millions instead of thousands of copies.

“Firms that continue to deploy deceptive design techniques are on notice,” Samuel Levine, who leads the F.T.C.’s consumer protection branch, said in a statement. According to the complaint, the deception starts from the company’s homepage, where consumers complete an “Official Entry Form” with a large button with phrasing like “WIN IT! ” This form, however, does not enter them in the sweepstakes. My point isn’t that there’s anything bad about self-published cat poems, crossword puzzles, TikToks, or anything like that.

"Far from being what the FTC calls a 'dark pattern,' on any given day, roughly 98% of consumers who browse PCH’s value driven merchandise offerings and enter do so without buying anything." The agency also alleged that the company tacked on shipping and handling fees to the cost of goods and until January 2019 misrepresented its practices on the sale of personal data to third parties. Publishers Clearing House agreed to pay out $18.5 million for "deceptive and unfair" sweepstakes practices and change several of its business tactics, the Federal Trade Commission said in a news release on Tuesday. They say it over and over buying will not increase chances of winning. As part of a settlement, PCH agreed to pay $18.5 million to provide refunds, among other things. Not every Publishers Clearing House customer will be eligible for a refund.