Nevada, 47 other states to settle suit over sweepstakes mailings

Attorney General Frankie Sue Del Papa has announced that her office and attorneys general from 47 other states and the District of Columbia Thursday entered into a settlement with Time Inc. that will require the company to make dramatic changes in what it tells consumer in its sweepstakes mailings.

The agreement with Time requires that all sweepstakes mailings provide a clear and conspicuous "Sweepstakes Facts" disclosure sheet. Those facts will include: A statement that buying will not help the consumer win the sweepstakes; that the consumer has not yet won; that the consumer does not have to buy anything to enter the sweepstakes; and the odds of winning a prize.

The settlement establishes a fund of $4.9 million to be used by the attorneys general for payment to consumers nationwide who were high activity sweepstakes customers - those spending more than $500 - in any one calendar years 1997, 1998, or 1999.

A third party administrator will be hired by the states to send restitution checks to those individuals who fall into this category. Letters will be sent to those customers. No claim forms will need to be completed. The third party administrator will send those customers a check in about 90 days. In addition, Time will pay the settling states $3,240,000 for attorneys' fees and the costs of the investigation. Nevada's portion of the payment to cover attorneys' fees will be $75,000.