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Companies can expect dark patterns to continue to be an area of focus for FTC enforcement and should ensure that their customer experiences are sufficiently transparent and intuitive to pass FTC muster. Though it agreed to the settlement, a spokesman for PCH denied that its customers had been coerced to buy products. Publishers Clearing House (PCH) has agreed to compensate customers affected by its “misleading” business practices $18.5 million, according to the Federal Trade Commission (FTC). PCH agreed to the proposed court order that requires the company to turn over $18.5 million to the FTC. "As part of a settlement, PCH agreed to pay $18.5 million, among other things."
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And that number would be completely different from the average sale of books, including the millions of self-published books. Whether or not this “1 billion books” number is big, it’s fairly stable. Print book sales have not been decimated by digital sales/streaming in the way of so many other industries. Publishing is an industry with plenty of problems—believe me, I know—but there’s no reason to think it’s on its deathbed. “While PCH profits handsomely from the use of its customers’ names, likenesses, and other personal identifying attributes in this way, it does so at the expense of its customers’ statutory rights of publicity,” the class action lawsuit’s each state. Consumers interested in entering sweepstakes contests are led to believe "they must order products before they can enter a sweepstake" or that "ordering products increases their odds of winning a sweepstake," the complaint said.
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Instead, the complaint charges, consumers enter an arduous journey through pages of advertisements and sales pitches before they can actually enter the sweepstakes. The advertisements allegedly use tricky wording that conflates ordering and entering to lead consumers to believe they must make a purchase to enter, or that purchasing will increase their chances of winning a sweepstakes, neither of which is true. Last week the article “No One Buys Books,” by Elle Griffin, went viral, topping Substack categories and being shared widely on social media. Over 90 percent of books sell fewer than 1,000 copies; 50 percent of books sell fewer than 12 copies. The article paints a nearly apocalyptic portrait of traditional publishing, in which nothing works, few make money, nobody reads, and the whole industry might go poof at any moment. This vision is appealing to many people, including writers who (fairly or unfairly) feel stymied by the industry, popularists who think reading itself is a snobby hobby, and tech types who mock “paywalled dead trees.” The only problem is, the picture isn’t true.
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Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts. As a result of a Federal Trade Commission lawsuit, Publishers Clearing House (PCH) has agreed to a proposed court order that will require it to pay $18.5 million to consumers who spent money and wasted their time, and make substantial changes to how it conducts business online.
The FTC lawsuit is not the first time Publishers Clearing House has dealt with litigation regarding their business practices. In 2000, a $30 million settlement was approved for a class-action lawsuit that claimed the company misled customers into buying magazines—purchases made with the belief it would increase their chances of winning a sweepstakes. The federal judge who approved the settlement said as much as $21 million would be paid in claims and that claimants would get full refunds of what they paid to the company. Publishers Clearing House also paid $18 million in a settlement from the same year that also alleged customers were misled into thinking their purchases of merchandise would increase their chances of winning a sweepstakes. In 2018, similar allegations were filed against the company in a class-action lawsuit that also claimed that Publishers Clearing House was selling consumers’ personal information. However, in a complaint against PCH, the FTC said the company uses “dark patterns” to mislead consumers about how to enter the company’s well-known sweepstakes drawings and made them believe a purchase is necessary to win or would increase their chances of winning.
Publishers Clearing House Sued for Deceiving Elderly with Sweepstakes - TMZ
Publishers Clearing House Sued for Deceiving Elderly with Sweepstakes.
Posted: Mon, 23 Apr 2018 07:00:00 GMT [source]
"This is our second dark pattern lawsuit over the last week," Samuel Levine, director of the FTC's Bureau of Consumer Protection, said of the PCH lawsuit in a written statement. "Firms that continue to deploy deceptive design techniques are on notice." PCH, known for its prize patrols and oversized checks, said in a state Worker Adjustment and Retraining Notification filing that nearly half of the 393 workers at its 300 Jericho Quadrangle headquarters would be let go from July 19, 2024, to Feb. 28, 2025. The company said the layoffs are due to the “winddown and eventual closure” of its commerce line of business. Direct marketing to consumers has been part of the business.
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They do not belong to or represent views of the Federal Trade Commission. Publishers Clearing House did not immediately respond to a request for comment. The Commission vote authorizing the staff to file the complaint and stipulated final order was 3-0. Chair Khan and Commissioners Slaughter and Bedoya issued a separate statement. The FTC filed the complaint and final order/injunction in the U.S.
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(The closemouthed way the latter handles its data has already famously mucked up movie stats.) But “books” encompass everything from niche academic monographs and Sudoku puzzle collections to bestselling novels and memoirs. It would be as if “movie” statistics included educational videos, online porn streaming, and TikToks. The sale would be a violation of Utah’s Notice of Intent to Sell Nonpublic Personal Information Act, the Publishers Clearing House class action lawsuit claims. Moreover, the FTC is not the only entity that has expressed an interest in regulating dark patterns. Indeed, several state comprehensive privacy laws — including statutes and regulations now in effect in California, Colorado, and Connecticut — impose restrictions on companies’ use of dark patterns. Thus, companies should expect regulatory interest in dark patterns at both the federal and state levels.
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When disclaimers and clarifying information were included on PCH webpages, they were in a small, light font that could easily be overlooked by consumers, according to the FTC. PCH — famous for surprising winners at their front doors with giant checks and balloons — must substantially change its business practices, the FTC said. I agree with you to pay the customers what they lost.I wanted to believe it was true but I knew it wasn't I've been submitting Sweepstakes entrances since 1992 and didn't hear anything til ntil someone told me I won the big prize.
PCH is perhaps best-known for its long-running sweepstakes promotions. The lawsuit charged that PCH used "dark patterns" — misleading phrases and website design — to persuade consumers that they needed to buy a product to enter a sweepstakes or increase their chances of winning. After hopeful customers click on sweepstakes registration links emailed to them by the company, they are directed to several web pages of advertisements for products, including magazine subscriptions, the complaint said. These pages say messages like "$1,000 per week for life AT STAKE!" and "JUST ONE ORDER IS ALL IT TAKES," the news release said.
As a result of the lawsuit, PCH has agreed to a court order requiring the company to make substantial changes to how it conducts business, and requiring the company to pay $18.5 million to consumers who spent money and wasted their time. The PCH complaint stands as yet another reminder of the importance of ensuring that your company’s privacy policy disclosures regarding the use of consumer data are consistent with your actual practices. In this case, the FTC alleged that PCH’s assertion that it did not “rent, license, or sell” consumer personal information was inconsistent with its actual practice of sharing consumer information with third parties for targeted advertising purposes. Before publishing privacy policies, companies should carefully vet the accuracy of their data use disclosures, as privacy policy misrepresentations have been a mainstay of recent FTC enforcement actions. The FTC says that Publishers Clearing House used language and designs on its website and in its email marketing that tricked consumers, including many older adults, into believing they had to buy things on the PCH website to enter a sweepstakes.
Each individual state—or territory, in Puerto Rico’s case—has a right of publicity statute that prohibits the practice of selling or renting mailing lists containing personal identifying transaction data, according to the class action lawsuits. Instead, the complaint charges, consumers go through pages of advertisements and pitches with tricky wording leading customers to believe they must make a purchase to enter, or that purchasing will increase their chances of winning, neither of which is true. Once consumers enter their email addresses they continue to receive alerts from the company saying that they must take another step to be eligible for sweepstakes prizes, the complaint said. In addition to these misleading practices, Publishers Clearing House hid shipping and handling costs from consumers until there was a financial obligation. While the company also maintained they didn't sell or rent consumer data, the FTC alleges they did as such until around January 2019, when Publishers Clearing House learned they were being investigated, according to court documents.
If I look at the top 10 percent of books … that 10 percent level gets you to about 300,000 copies sold in that year. And if you told me I’m definitely going to sell 300,000 copies in a year, I would spend many millions of dollars to get that book. The plaintiff claim PCH never asked for permission before selling or renting their personal information on the open market to data miners, data aggregators, data cooperatives, aggressive marketing companies, list brokers, and others. "Today's action builds on previous efforts to crack down on companies that use illegal dark patterns to fuel digital deception and harm consumers," FTC Chair Lina Khan and commissioners said in a statement. The agency says PCH made it seem as though customers needed to purchase a product on the PCH website in order to be eligible to win or to better their chances of winning a prize.
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