NEW YORK (AP) — For decades, Publishers Clearing House doled out hefty checks on the doorsteps of hopeful consumers across the U.S., including prizes that boasted lifetime payouts. But some of those winners are now facing an end to the “forever” money they were once promised.
The turmoil arrives amid PCH's ongoing bankruptcy process. The sweepstakes and marketing company filed for Chapter 11 in April, citing growing financial strain that spanned from rising operational costs and changes in consumer
behavior.
In July, gaming platform ARB Interactive purchased certain assets from PCH for $7.1 million and established “PCH Digital,” a new platform that hosts sweepstakes opportunities. But under the terms of that deal, ARB says it's not responsible to pay out prizes issued by PCH prior to July 15 — meaning that the company will not pay people who won sweepstakes before that date, with an exception of two unawarded “SuperPrizes” still being promoted.
In a statement sent to The Associated Press, ARB recognized the disappointment for past winners that it said was caused by the bankruptcy process — and noted that it was “committed to restoring and preserving the trust” of the PCH brand going forward.
ARB added that it was “taking decisive steps to ensure that every future prize winner can participate with absolute confidence." The company pointed to plans for a paying structure "that stands separate from ARB to ensure that all future PCH prizes are honored, regardless of ARB’s financial status.”
PCH did not immediately respond to requests for comment on Tuesday.
It wasn't immediately clear how many past winners of PCH sweepstakes were no longer seeing “forever” checks. At the time of April's Chapter 11 filing, PCH listed 10 unidentified prize winners among its creditors with the largest unsecured claims — totaling millions of dollars, court documents show.
And for some, trouble bubbled up before the Chapter 11 filing. One man, who won a $5,000 a week “forever” award from PCH in 2012, told The New York Times and KGW that he didn't receive his annual check from the company back in January — which has since caused him to scramble to pay his bills without the money he's learned to rely on.
PCH’s roots date back to 1953 — when Harold and LuEsther Mertz and their daughter, Joyce Mertz-Gilmore, formed a business out of their Long Island, New York home to send direct-to-consumer mailings that solicited subscribers for a number of magazines through one single offering.
The company later grew with chances for consumers to win money — first launching a direct mail sweepstakes in 1967 — and expanded its offerings to a wide variety of merchandise, from collectible figurines to houseware and “As Seen on TV” accessories, in the years that followed. Its in-person “Prize Patrol” team was formed in 1989.
PCH became known for surprising prize winners with oversized checks, which was often filmed and featured in TV commercials.
But its operations didn't come without financial strain, particularly in recent years. When filing for Chapter 11 in April, PCH said it was working to “finalize a shift away” from its legacy direct-mail business and instead transition to a “pure digital advertising” model — citing rising competition, expensive operating costs and changes in consumer behavior.
Over the years, PCH also faced some scrutiny from regulators who previously raised concerns about consumers mistakenly believing that making purchases from the company would improve their chances at winning its sweepstakes. As a result, PCH has racked up several costly legal settlements.
