AUSTIN - Texas Attorney General John Cornyn and 47 other attorneys general announced today the filing of a $35 million multi-state settlement agreement with Northridge, California-based United States Purchasing Exchange (USPE). This settlement provides restitution to consumers and requires the company to include a fact sheet in its mailings, fully disclosing that buying will not help you win.
"There is no place in Texas for companies who intentionally mislead consumers for economic gain. Businesses operating in Texas must obey the law or face the consequences," said Attorney General Cornyn.
According to the terms of the agreement, restitution will be made to any consumer who paid more than $1,870.00 to USPE in 1997, 1998 or 1999. In Texas, an estimated 4,000 victims are eligible under these conditions.
USPE has agreed to injunctive terms requiring substantial modification of their business and marketing practices. Among the changes USPE must make, the most innovative is the inclusion in their mailings of a "Sweepstakes Facts Sheet." This sheet describes in detail actual odds of winning and includes the message, "Buying Won't Help You Win." This is the first time this information sheet has been required, and this information is expected to be a model for all sweepstakes marketing practices.
In addition to the restitution, USPE also will discontinue sweepstakes mailings to any person who makes 25 purchases or spends more than $935 in a 12-month period in response to sweepstakes offers to stop unnecessary purchases by high activity customers. USPE also will contact so-called "high activity" customers with a separate letter to let them know that they can enter the company's sweepstakes as often as they like and not have to purchase anything to win a prize.
The agreement also requires that USPE:
USPE sends out tens of millions of mailings nationwide every year. As with many sweepstakes mailings, USPE mailings include offers for purchasing products, along with sweepstakes entry forms. Consumers generally purchase the products because they think it will improve their chances of winning.
The Attorneys General began investigating USPE in 1998, when a review of the company's mail solicitation materials revealed misleading statements about sweepstakes odds, a violation of the Texas Deceptive Trade Practices Act.
If you have a complaint against a sweepstakes promoter or feel you are owed restitution, please contact the Consumer Protection hotline at (800) 621-0508 or fill out a complaint online at www.oag.state.tx.us. The Attorney General's office has created a Frequently Asked Questions information sheet about the USPE settlement, and it may be found at www.oag.state.tx.us/consumer/USPEFAQS.htm.
This settlement has been handled by Assistant Attorney General Esther Chavez of the Attorney General's Austin Consumer Protection office.
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