$18.5M in Publishers Clearing House Refund Checks Issued to Consumers in FTC Action

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The Federal Trade Commission (FTC) announced last month that $18.5 million will be refunded to nearly 282,000 consumers who were allegedly deceived by Publishers Clearing House (PCH) regarding sweepstakes drawings.

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The FTC announced on April 30 that refund checks have been issued to more than 281,724 eligible customers who ordered a product from Publishers Clearing House after receiving and clicking on one of the company’s allegedly misleading emails.

According to a June 2023 press release, eligible consumers do not have to do anything to receive their PCH refund check. The FTC said that many consumers impacted by PCH’s conduct are “older and lower-income.”

In a stipulated order filed on June 27, 2023, the FTC found that PCH used deceptive language and manipulative website designs known as “dark patterns” to mislead customers into thinking that a purchase was necessary to enter or win a sweepstakes, or that a purchase would increase their chances of winning.

In addition, the FTC charged that PCH sent emails with deceptive subject lines that led recipients to believe the messages were related to tax forms or other official documents.

Per the FTC’s order, the company also concealed shipping and handling fees from consumers who made purchases on the website. These hidden costs added an average of 40 percent to customers’ orders, the FTC said.

The agency further found that PCH, despite promising that online ordering was “risk free,” failed to disclose that consumers were responsible for paying shipping costs when returning unwanted items.

According to the FTC, alongside the payment of $18.5 million, PCH is also required to make significant changes to its email and online operations.

For one, the company must make clear, unavoidable disclosures on every shopping page that a purchase is not necessary to enter a sweepstakes, and that making a purchase will not help a participant win, the agency stated. Publishers Clearing House must also plainly disclose its order cancellation and return policies and the full price of any product listed for sale, along with any additional fees for shipping and handling, before a shopper makes a purchase, the FTC’s order stipulates.

The agency also prohibited PCH from sending emails with misleading subject lines and engaging in other allegedly deceptive practices.

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