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Attorney General Lockyer Announces Settlement With Time Inc. on Sweepstakes Mailings

Refunds Over $4 Million To Consumers; Requires Major Consumer Disclosures
Thursday, August 24, 2000
Contact: (415) 703-5837

(SACRAMENTO) – In a second major sweepstakes company settlement this week, Attorney General Bill Lockyer today announced that Time Inc. will refund over $4.9 million to "high activity" customers in California, 47 other states and the District of Columbia, and provide major consumer disclosures in sweepstakes mailings.

"These sweepstakes settlements are changing industry practices so consumers may readily know they don't have to make a purchase to enter and learn what their chances are of becoming instant millionaires," Lockyer said. "Consumers will be able to clearly see that buying magazines, books, videos or other items will not improve their chances of winning."

On Tuesday, a multi-state settlement was reached with Publishers Clearing House, which operates the familiar "Prize Patrol" sweepstakes. In April, Lockyer and other state Attorneys General reached a settlement with Los Angeles-based US Sales Corporation, which was the first to agree to include a Sweepstakes Facts sheet in mailings.

In the latest settlement, Time Inc. agreed to provide full refunds to more than 6,000 customers, including over 900 in California, who spent more than $500 in any of the last three years on the company's "Guaranteed & Bonded" sweepstakes. Time Inc. sends out millions of pieces of mail annually, each offering consumers the opportunity to enter a sweepstakes and to subscribe to one of the many magazines and books published by Time Inc. and various audio or video collections produced by Time Inc.

Time Inc. also agreed to include Sweepstakes Facts in its mailings. The clear and conspicuous public disclosures will include a statement on the odds of winning, that the consumer has not yet won, that making a purchase will not help the consumer win, and that the consumer does not have to buy anything to enter the sweepstakes. Additionally, Time Inc. will not be able to misleadingly state that a consumer is the winner or about to become the winner of a sweepstakes, misleadingly tell consumers that they have a better chance of winning a sweepstakes than they actually do or represent that the sweepstakes package has been sent by special courier or a special class of mail, if it has not been.

Joining in the settlement were Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming and the District of Columbia.

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