- PCH prize winners are among the unsecuredcreditors in bankruptcy proceedings.
- Unsecured creditors are generally last in line to get paid in such cases.
- Now, installment payments to past winners have dried up.
For decades, Publishers Clearing House flooded mailboxes, email and TV with ads for its sweepstakes, which promised huge payouts to the winners.But times have changed. Magazines aren't selling many subscriptions these days, and PCH is feeling the pain. The companyfiled for Chapter 11 bankruptcy protection in New York in April, citing liabilities of $50 million to $100 million and assets of just $1 million to $10 million, according to federal court records. Among its largest unsecured creditors: 10 of its own prize winners.
That list includes longtime recipients of lifetime prize payments, many of whom say their checks suddenly stopped arriving this year with little explanation.
One of them is John Wyllie, 60, of Bellingham, Wash., who won $5,000 a week for life in 2012. For more than a decade, he collected an annual check for $260,000. The payments allowed him to retire and buy a six-acre property. But this January, the money dried up.
Im getting the shaft, on top of the shaft, Wyllie said in a New York Times report. Looking at [the giant check] makes me sad and it makes me mad.
New owner limits payouts to future winners
In July, ARB Interactive, an online casino operator, bought Publishers Clearing House out of bankruptcy for $7.1 million. The company announced it would honor only prizes awarded after July 15. Those include two SuperPrizes worth a combined $2.5 million, a $975,000 payout in May, and a $1 million award scheduled for Sept. 30.
Payments promised to past winners under PCH's old owners remain uncertain. ARB says it is not responsible for those obligations, and Publishers Clearing House has little left to pay out. A federal bankruptcy judge will ultimately decide how the companys remaining assets are divided.
A spokesman for ARB Interactive said the company contributed funds to the bankruptcy estate and plans to establish a new system to guarantee all future prizes. Our vision is to rebuild P.C.H. as a brand synonymous with trust, excitement and long-term integrity, the spokesman said.
Lives disrupted by missed checks
For some families, the halted payments have already caused financial strain. Tamar and Matthew Veatch, disabled Army veterans in Oregon raising three children, had relied on nearly $200,000 a year in Publishers Clearing House prize money since 2021. They said the loss of their July payment left them unable to cover back taxes and mounting household bills.
Former company executives say the situation was avoidable. Darrell Lester, a retired Publishers Clearing House executive, said the company once safeguarded prizes through prepaid annuities but stopped that practice after 2003.
You cant not pay the winners, Lester said in the New York Times story. Thats a cardinal sin.
PCH's spotty record
PCH may have raised consumers' hopes of getting a big payout but it also amassed a lengthy record of consumer complaints and allegations of misleading promotions.
In April, the Federal Trade Commission begandistributing more than $18 million in refunds to consumers misled by deceptive marketing tactics from Publishers Clearing House.The refunds were part of a settlement reached after the FTC charged PCH with targeting older and lower-income consumers using misleading emails, order forms, and promotions that gave the false impression that purchasing products was necessary to enter or improve odds in sweepstakes.
According to the FTCs complaint, PCH sent emails with misleading subject lines, implying they were official communications, such as tax documents, to entice users to open and engage with them. Once inside, consumers were misled into believing that ordering products improved their chances of winning a sweepstakes prize a practice prohibited under federal law.
Deceptive charges and "risk-free" claims
The agency also accused PCH of adding deceptive shipping and handling charges and falsely claiming that purchases were risk-free. In reality, consumers had to return unwanted products at their own expense to obtain refunds.
The FTCs action sends a clear message that companies cannot manipulate vulnerable populations with false hope or misleading tactics, the agency said in a statement.
Consumers' feelings about PCH over the years have been mixed. Many have praised the fact that it's free and gives everyone a chance, howeverslim, to win. But others have found it annoying, or worse, like Rose of Casa Grande, Arizona. "If you love commercials and don't expect to ever win anything, it is where you want to be. For one entry of a particular contest, there were 5 commercials. Even when you cash in your tokens, you have to sit through a commercial or 2. You should at least get some sort of a token prize just for having to endure all the commercials," she said in a ConsumerAffairs reviewin February.
Others took a dimmer view: "What a rip off PCH HAS COME TO BE, they have sold my personal information to ex employees who have scammed me and have refused to do anything about it. I have accumulated over 1.3 billion tokens and have never won anything," said Louis of Bensalem, Penn., earlier this month.
