FOR FURTHER INFORMATION CONTACT:

Genene W. Morris, Jennifer Salvato (973) 504-6327

NEWARK -Time Inc., publisher of such national magazines as People and Sports Illustrated, has agreed with New Jersey, 47 other states and the District of Columbia to make significant changes in its sweepstakes promotions to settle concerns that the company's advertisements for its contests were deceptive and misleading to consumers, Attorney General John J. Farmer, Jr., and New Jersey Division of Consumer Affairs Director Mark S. Herr announced today.

As part of the agreement, Time will also pay the states $8.1 million for consumer restitution and to cover the states' investigative and legal costs. New Jersey's share of the settlement is $225,000.

Time distributes millions of sweepstakes mailings under the title "Guaranteed & Bonded" annually offering consumers the opportunity to enter the contests and to subscribe to one of the many magazines it publishes or to buy one of the Time-Life books, or its audio or video collections. Following an extensive inquiry into Time's sweepstakes practices, the States contended that those mailings contained deceptive advertisements that misled consumers into believing that either they had a good chance of winning or that a purchase of one of the company's products would improve their chances of winning.

"Through this agreement, we are protecting consumers from being misled by deceptive sweepstakes advertisements," Attorney General Farmer said. "Consumers who enter sweepstakes competitions should not feel obligated to buy something from the sweepstakes promoter to better their chances of winning the prize."

"Today's agreement requires Time to disclose to consumers their odds of winning a prize. It also requires Time to advise consumers that buying one of its products or subscribing to one of its magazines will not help them win the sweepstakes prizes," Herr said. "This agreement ensures that consumers are fully informed before deciding whether or not to enter any of the company's sweepstakes."

The agreement requires Time to provide a clear and conspicuous "Sweepstakes Facts" disclosure to consumers who receive the company's sweepstakes mailings informing them that they do not have to buy anything to enter the sweepstakes. Without admitting any wrongdoing, the company must also refrain from misleading consumers into believing that they have a better chance of winning a sweepstakes than they actually do or represent that the sweepstakes offer has been sent by special courier or a special class of mail, if it has not been.

Also, under the terms of the agreement, Time will:

• establish a fund of $4.9 million to be used by the states for payment to consumers who were frequent sweepstakes customers who spent more than $500 on Time products in any one of calendar years 1997, 1998 or 1999.
• refrain from using the terms "congratulations" or other similar terms, such as "good news" in its sweepstakes promotions;
• establish a "Sweepstakes Do Not Promote List" which requires Time to stop sending new sweepstakes solicitations to so-called "high activity" customers who, among other things, have spent more than $500 in any given year on Time products in response to the company's sweepstakes promotions.

Connecticut and Iowa are not participating in the multi-state agreement.

In the past, New Jersey has either filed suit against or entered into agreements with other sweepstakes operators including American Family Publishers in March 1998, Publishers Clearing House in January 2000 and United States Purchasing Exchange in April 2000.

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