FTC Sends $18.5 Million in Refunds After Publishers Clearing House Settlement

The Federal Trade Commission (FTC) said Wednesday (April 30) that it is sending $18.5 million in refunds resulting from a settlement it reached in June 2023 with Publishers Clearing House (PCH).

The settlement followed an FTC complaint alleging that PCH made misleading claims that harmed consumers, the agency said in a Wednesday (April 30) press release.

Reached by PYMNTS, PCH noted in an emailed statement that the company reached the settlement with the FTC nearly two years ago.

“While we disagreed with the FTC’s assertions at the time, we were glad to have resolved the matter and move forward continuing to do what we do best — provide consumers fun entertainment and games powered by our famous chance to win,” the statement said. “Our Prize Patrol continues to award weekly prizes from coast to coast with champagne, flowers, balloons and that well-known big check!”

In the complaint that led to the settlement, the FTC charged that PCH deceived consumers into thinking that they had to purchase a product to enter a sweepstakes or to increase their chances of winning; sent consumers emails that that led them to believe the email was related to tax forms or other official documents; added deceptive shipping and handling fees; and misrepresented that ordering was “risk-free,” while requiring consumers who wanted refunds to return the products at their own expense, according to the release.

When announcing the proposed settlement in June 2023, Samuel Levine, who was director of the FTC’s Bureau of Consumer Protection at the time, said in a press release: “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.”

In addition to requiring PCH to turn over $18.5 million for refunds to consumers, the settlement also prohibited the company from deceiving consumers about purchases and sweepstakes, charging surprise fees or sending deceptive emails, and required it to separate sweepstakes from sales, make clear disclosures, delete certain consumer data and preserve certain records, according to the June 2023 press release.

The FTC said in its Wednesday press release that it is sending 281,724 checks to consumers who ordered a product from PCH after receiving and clicking on one of the emails alleged to be deceptive.

PCH announced April 9 that it filed for Chapter 11 bankruptcy protection to shed the cost of its legacy businesses and focus on digital advertising-supported entertainment.

The company said it plans to eliminate its direct mail and online retail shopping and subscription businesses but continue to award prizes to winners nationwide.