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Mag exchange sued

By Published on .

Several years after controversy over one tactic used in promotions nearly killed the use of sweepstakes to sell magazine subscriptions, a California suit is raising the possibility that controversy about another tactic could affect publishers' remaining use of sweepstakes.

A suit filed last week against Special Data Processing's National Magazine Exchange by AARP, Santa Clara University's East San Jose Community Law Center and a San Francisco law firm contends promotional mailings violate California consumer protection laws.

The earlier controversy was over pitches from Publishers Clearing House and American Family Publishers that critics said encouraged consumers to believe that ordering was either necessary for or helpful to winning prizes. There was also controversy about the companies' willingness to accept thousands of dollars in subscription renewals for years from individual consumers without asking questions. The controversy led to lawsuits and a law requiring publishers to repeatedly state no purchase is necessary to enter.

This time the contention is National Magazine Exchange sweepstakes letters got people to call about prizes, only to be offered six magazines for $1 a day, sometimes without being told the subscription was for four years and would be billed immediately to credit cards. The suit, filed as a class action on behalf of California consumers, says the tactic violates California's sweepstakes laws; that the company never gave consumers a required notice that they have three days to cancel; and that it refused to honor cancellations.

National Magazine Exchange executives said they were reserving comment until they had seen the lawsuit, but that their intent was always to comply with state laws.

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