Office of Maryland Attorney General J. Joseph Curran, Jr.

August 24, 2000 Media Inquiries: Sean Caine 410-576-6357


Baltimore - Attorney General J. Joseph Curran, Jr. today announced that his office and the Attorneys General of 48 other states and the District of Columbia entered into a settlement with Time Inc., which will require the company to make dramatic changes in what it tells consumers in its sweepstakes mailings. "This settlement will help protect Maryland consumers from misleading sweepstakes solicitations and provides reimbursement to some of our most vulnerable consumers, many of whom are senior citizens, for past purchases made in response to misleading solicitations," said Curran.

Time's sweepstakes mailings use the title "Guaranteed & Bonded." Time has been one of the country's largest sweepstakes mailers, sending out millions of pieces of mail annually, each of which offers consumers the opportunity to enter a sweepstakes. These mailings also offer consumers the ability to subscribe to one of the many magazines published by Time Inc., buy a Time-Life book, or buy one of the audio or video collections Time produces.

The agreement is the second the multistate group of Attorneys General has arrived at with a major sweepstakes company, since the hearings the Attorneys General held on sweepstakes activities last year. The first agreement was reached with US Purchasing and Exchange (USPE) last March. The agreement with Time requires that all sweepstakes mailings provide a clear and conspicuous "Sweepstakes Facts" disclosure sheet as a separate enclosure. The Sweepstakes Facts will include a statement that buying won't help the consumer win the sweepstakes, that the consumer has not yet won, and that the consumer doesn't have to buy anything to enter the sweepstakes. The disclosure will also give the odds of winning a prize.

"One of things that we wanted to make certain is that consumers who receive sweepstakes mailings understand they don't have to buy anything to have a chance to win and that buying will not help their chances of winning," Attorney General Curran said. "We believe the Sweepstakes Facts disclosure will help consumers do this."

The Attorney General said that some consumers in Maryland, particularly older people, have in the past purchased the products in sweepstakes because they believed the purchases would enhance their chances of winning.

Additionally, under the terms of the agreement, Time will not be able to misleadingly state that a consumer is the winner or about to become the winner of a sweepstakes, misleadingly tell consumers that they have a better chance of winning a sweepstakes than they actually do or represent that the sweepstakes package has been sent by special courier or a special class of mail, if it has not been.

Time has agreed to establish a "Sweepstakes Do Not Promote List" for so-called "high activity" customers which requires Time to stop sending sweepstakes solicitations to customers who either have a current subscription to a magazine published by Time which lasts more than five (5) years or have spent in excess of five hundred ($500) dollars on Time products in 12 months as a result of sweepstakes promotions by any combination of Time entities or businesses.

The settlement signed by Time and the Attorneys General establishes a fund of $4,924,636 million to be used by the Attorneys General for payment to consumers who were high activity sweepstakes customers in calendar years 1997, 1998 or 1999. Any consumer who spent more than $500 or more in one of those years will be issued a full refund. Time's records show that 135 such consumers in Maryland will receive restitution totaling $94,500. Those entitled to restitution will be contacted by an independent claims administrator.

In addition, Time will pay the states $3,240,000 million for attorneys' fees and the costs of the investigation, of which Maryland will receive $75,000.

Participating in today's settlement were the Attorney Generals of the States of Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming and the Corporation Counsel of the District of Columbia.