Publishers Clearing House deal imperiled

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Publishers Clearing House's $10 million settlement of a class-action lawsuit could be in trouble.

State attorneys general and the American Association of Retired Persons are among five interested groups that have filed objections to the proposed settlement. A hearing on the objections is set for Jan. 25 in U.S. District Court in East St. Louis, Ill.

The filings contend that PCH needs to do more to curb magazine-subscription promotions targeting individual consumers with personalized messages and to make the proposed settlement easy to understand and readable.

"We don't think the injunctive relief goes far enough and that they need to change their more egregious solicitation practices," said Deborah Zuckerman, an AARP attorney. "We also feel that the notice that went out to people [announcing the proposed settlement] was difficult to read and figure out."

"We believe that the class-actions settlement was comprehensive, substantial and fair," said Christopher L. Irving, director of consumer affairs at PCH, who added that the notice sent out as a result of the settlement was approved by the court and is little different from similar notices in other such cases.

Chris Burke, a Wisconsin assistant attorney general representing 21 state attorneys general, said: "We are concerned that the proposed settlement not be used to inhibit state actions."

SOME STATES REQUIRE MORE

He noted some state consumer protections laws go further than others, and Wisconsin's law requires actions beyond those required by the PCH settlement.

Reached in August, the settlement stipulated that PCH inform consumers nationally that no purchase is necessary to enter a sweepstakes and offer a refund to those who believed purchases were necessary to increase their chance of winning and to get extra entries into sweepstakes.

Those requirements also are part of sweepstakes legislation President Clinton signed into law on Dec. 12.

AARP's objection to the settlement centers on type sizes of sweepstakes disclosures. The states in their objections also contend that the people involved will get little money after administrative expenses and attorneys fees eat up much of the $10 million. The attorneys general claim a settlement needs to be in the "hundreds to millions" of dollars.

Last year, in the face of similar lawsuits, PCH rival American Family Enterprises filed for Chapter 11 bankruptcy protection.

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