They Won Millions for Life. Until They Didn't.

0:05Have you ever wanted to get a giant check delivered to your door? For decades, Americans across the country have wished for exactly that. And thousands have had it come true. The check would be delivered by a TV host wearing an orange tie. All right, we're headed up to the house. I don't see any cars in the driveway. Let's see if she's home. Hopefully she is. He'd approach the winner's front door carrying balloons, flowers, and followed by an entourage of TV cameras. When they answered the door, he'd give them the good news. How's your day going so far? It's about to get a whole lot better, I think.

0:41It is about to get a whole lot better, because guess what? You just won$10 ,000 from Publishers Fearing Us. No way! And then, the host would hand the winner their ginormous check. What do you think of that? Holy moly! Are you serious? I'm dead serious. The company behind these sweepstakes is Publishers Clearinghouse. Over the course of decades, they've given away hundreds of millions of dollars to thousands of Americans — giant checks and all — making their dream of winning big a reality. But earlier this year, Publishers Clearinghouse went under. Well, it's the end of the line for Publishers Clearinghouse.

1:20The decades-old sweepstakes company has filed for Chapter 11 bankruptcy protection. And for a handful of winners, that dream of making millions went up in smoke. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Tuesday, October 7th.

1:45Coming up on the show, the Publishers Clearinghouse winners losing out after its bankruptcy.

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2:30Before it became known for its sweepstakes, Publishers Clearinghouse, or PCH, got its start selling magazine subscriptions. The company was founded on Long Island in the 50s. And it's meant to be for the carpooling of magazine publishers. That's our colleague Akiko Matsuda. She covers bankruptcy. They sell magazine subscriptions on behalf of publishers. That's why it's called Publishers Clearing House. In those early days, PCH would send out lists of magazines through the mail to homes across the country, with the hope that recipients would subscribe and earn PCH a commission. Those mailers were a core part of PCH's business.

3:18They came in thick yellow envelopes. And by the 80s, the company was selling more than just magazine subscriptions. Things like jewelry, collectible coins, ceramic figurines, you name it. All through the mail. But there was a problem with those mailers. PCH sent out a lot of them. And for a lot of Americans, it was just junk mail. PCH became the butt of jokes on shows like Seinfeld. Because the mail never stops. It just keeps coming and coming and coming. There's never a let-up. It's relentless. Every day it piles up more and more and more. And you've got to get it out. But the more you get out, the more it keeps coming in.

3:54And then the barcode reader breaks. And it publishes Clearinghouse. All right, all right, all right. So how do you entice people to open their junk mail? The answer was sweepstakes. They included as a marketing tool to get people excited about going through those lists. Because they have the sweepstake application too. And some people may try to buy magazine, but at the same time, many people try to just apply for the sweepstakes. What's the new publishers clearinghouse sweepstakes doing over there? Fluttering my desk. Don't you know you could win$2 million? So stop making excuses. Enter the one and only Publishers Clearinghouse Sweepstakes.

4:38There's no place like our house. Come on, send it in. The strategy worked. With prize money in play, more recipients responded to the mailers. And as more people responded, PCH would sell more magazines and merchandise. Eventually, PCH started featuring winners in its TV ads through what the company called the Prize Patrol. Those are the commercials where hosts travel the country giving out oversized checks to winners. The Publishers Clearinghouse Prize Patrol kicks off the 21st century with$21 million. Do you not believe in this? It'll all happen live on TV. Many people who I talked to said that, you know, haven't you seen those commercials popping in during the football, Super Bowl?

5:22And kind of, wah! 10 ,000! 1 million! Right, right. That's the stuff that, like, I remember about sweepstakes. It's like, oh, my gosh, there's confetti. Yeah. And then the giant, like, yeah, the giant check. Yeah. And you don't know what's going on, but it's a happy moment. What were some of the prizes? What was the range of what they would give away? $5 ,000,$10 ,000, and can be$200 ,000. And the biggest one is$5 ,000 a week forever, quote, unquote. quote, meaning that the winner is going to get the prize for life. And after the winner passes away, it's going to be passed along to somebody, designated person, until the person dies.

6:09Wow. Two lifetimes. Two lifetimes. PCH's Forever Prize was the biggest the company gave out, promising contestants a constant stream of checks for life. It's February 28th and the Prize Patrol is in Cottage Grove, Oregon, and we're about to surprise. Tamar Veach with$5 ,000 a week forever. Let's go do it, Howie. Let's go. Woo! We all, pretty much all had just gotten up from bed. And so when the phone, or when the doorbell started ringing, like, it was like, you know, not just a one ding. And so we're all like, what on earth? That's Tamar Veach. She won PCH's Forever Prize in early 2021. She lives in Oregon with her husband Matthew and their three kids.

6:51And so Matt goes to the door and he looks out because we have a window to the left of our door. And he's like, honey, there's people with balloons and cameras. No, I said, honey, it's for you. Oh, well, that's what it was. I thought I had thought you said that. And so I was just like, wait, what? And you could see them. And they were standing out there with balloons and cameras and lights. First thing I said was, I look terrible. I just got up. Oh, my gosh. Why do they have to come now? So I just went out there and I brought my daughter with us. I was just, oh my goodness. Hi. I'm looking for Tamar.

7:28Yes. Come on out. Tamar, do you know what's going on right now? Yeah, I do. I didn't think it would ever happen though. Oh, today's the day. Today's a good one. You just won the Publishers Clearinghouse Sweepstakes. $5 ,000 a week forever. I didn't think this would ever happen. Could you guys use the money? We do okay, but still, oh my goodness. This is truly real. Don't give up. How did you feel when you found out, like when you looked out the window or maybe when you opened the door? Like how did it feel to know for sure that, shoot, you finally won after all that time? You know, I'm not like one of those people that, you know, jumps around and screams.

8:09That's just not me. But when I went out there, I was just kind of, I was just standing there just kind of wide-eyed like, oh my goodness. You know, it happened. It was, for me, it was a huge relief. Tamar and Matthew met in the Army in 2001 while they were stationed in Germany. They married soon after. The Army doesn't care if you're dating or even if you're engaged. You have to be married. And so we both, on our own, we both kind of thought, oh, we have this sneaky idea. What if we got married? And he actually was not supposed to be in Germany at all. he was supposed to have gone to Italy. And we joke because we're like, OK, well, he was obviously sent there to meet me.

8:51That was it. That was the mission. Both Tamar and Matthew served in the Army during the Iraq War. And through their service, they developed disabilities that prevent them from working full-time jobs. Tamar has chronic pain problems, and Matthew has struggled with PTSD. Since leaving the Army, they've depended on disability payments from the Army to live. They say it's enough to get by, but money's still tight. I'm working on budgeting food to have good, healthy meals for our family. And we spend a chunk of change on, just on good food. We're not even eating extravagantly, but it's like every time it's shocking to me.

9:29Food and clothes and children keep growing. Immediately after winning that lifetime prize, Tamar got a check for$50 ,000. PCH told them the rest of her winnings would come later. so what did you do with the money with the first that first payment we paid off debt right that was like the first thing wow yeah it's a talk about a an immense relief to just zero every bit of debt you have we had we had a minivan that was falling apart and so we were able to get a new car that all of us could fit in and that's nice you know it's basically you know we took care of all of our needs, all the things that needed to happen.

10:11You know, fixing things around the house, you know, basically just everything that we needed. After that initial check, Tamar got her winnings in a lump sum every February. After taxes, the total came out to about$200 ,000 a year. Did you feel certain that the checks would keep coming? Yeah. We asked Publisher's Clearinghouse, the lady that we interfaced with, and she said, oh, oh yeah, we have all these millions and millions of dollars to pay all the prizes. But it was this real reassurance that, yeah, yeah, that we'll be able to pay this, and we plan on giving more of these away. But that forever prize didn't exactly last forever.

10:57That's next.

11:10Since winning PCH's Forever Prize, Tamar and Matthew have used their prize money in a number of ways. They bought a car, paid off their debt, and they've taken their children on vacations. Earlier this year, they were expecting their usual$200 ,000 deposit in February. And they'd started making plans for how they'd spend it. We had gotten four years of payments, which is a good chunk of money. and we spent a lot of it. We set some aside for it. We started to talk about saving for college fund for our kids. We did have a rainy day fund, but we had planned on kind of like, okay, we'd done some big trips.

11:45We're going to get paid this year. This is our plan for the money. We've got a couple of big repairs we need to do on our house, but we're going to really start saving a lot of this money. Right. But the payment didn't come. Something was up. Three weeks in, we started, We emailed basically everyone at Publishers Clearinghouse we could and finally got a response from one of their lawyers. And he was like, oh, we've changed the system. We're not going to pay you yearly. We're going to pay you quarterly in July now. Okay. And we're like, okay, well, and I sent emails back and forth of like, you're putting us at real hardship here.

12:20We planned for this. It turns out that for years, PCH's business had been struggling. The company had been trying to transition its business online, away from the mailers it had become known for. But PCH faced a lot more competition in the world of e-commerce. Here's our colleague Akiko Matsuda again. So they kind of thought that those online businesses, you know, became very prevalent. If you go to Amazon, you can buy anything, everything. At the same time, PCH's costs were going up. Everything from the price of TV ads to its mailers. The cost of those, you know, shipping, postages for sending direct mailing to customers also went up.

13:04So it's a combination of the things that they are trying to change into digital company, magazines, subscriptions are not selling anymore. Merchandise, they have to kind of stop selling those things because it's not selling, it's not making any money for the company. So many things didn't work out. But the biggest hit to PCH's business came in 2023. The Federal Trade Commission had accused PCH of misleading customers into thinking that buying merchandise from the company would better their chances of winning the sweepstakes. They somehow gave the impression that if you buy it, subscribe to magazine, or if you buy these products, you're going to win prizes.

13:48What did PCH have to say about that? Were they telling customers that if they bought stuff, they would have a better chance? They denied any accusation, but they decided to settle for$18 million. And they said that that was a very difficult amount of money for them to pay. That$18 million settlement was a huge blow to PCH's finances. And in April of this year, the company filed for bankruptcy. The day after the filing, winners like Tamar got an email from PCH. It said that the company intended to keep sending the checks. Tamar and Matthew decided to wait for the promised July payment. But July came and went, and no payments showed up in Tamar's account.

14:33When they asked the company, PCH referred them to the bankruptcy case. Tamar and Matthew would have to claim their winnings there. But Akiko says it's unlikely Tamar and Matthew will be paid from the bankruptcy, because in the bankruptcy case, prize winners are not secured creditors. What is a secured creditor? So secured, everybody knows or maybe many people knows about how mortgages work. When you buy a house, you take out the mortgage. That's secured loan. That's because if you cannot make payments for mortgage loans, the bank will eventually come to your house and foreclose your property and they take it.

15:18In other words, the mortgage is backed up by an underlying asset, the house. In bankruptcy, the same principle applies. Secured creditors have assets they can claim back from the bankruptcy estate. But in the PCH bankruptcy, prize winners like Tamar don't have an asset to back up their claims to their winnings. They just have a contract. But so what happens in that case? The bankruptcy empowers those filers to reject contracts. So this is very unfortunate, but that's why if you are not secured creditors, secured meaning that they have some asset to back up those contracts or loans, this is just, you know, agreement between the two parties.

16:04So that can be rejected. That's the whole point of bankruptcy, to give the filers a second chance so that they can get out of bankruptcy and thrive as a new, revived business. This summer, PCH was bought out of bankruptcy by an online casino company called ARB Interactive for over$7 million. ARB says it plans to keep doing PCH sweepstakes, but it isn't responsible for paying past winners. ARB says that it understands the concerns surrounding unpaid prizes owed to past winners. It added that it's taking steps to ensure that all future prizes are protected, regardless of the company's financial status.

16:49What are your options as of now? So right now for us, we're in the pool of unsecured debt in the bankruptcy and probably we'll get pennies on the dollar. I've joked with friends that we're going to get a check for a couple hundred dollars and a handwritten note, and that'll be it. Tamar and Matthew say that they'll be okay financially. They still get disability payments from the Army to cover their expenses. Still, the loss of their prize is a huge blow to their family. They'd planned to use the prize money to pay for their kids' college expenses. But Tamar and Matthew say that what upsets them the most was the way PCH treated them.

17:29It was the deception that made it the worst because it's like you guys kept telling us that, yes, you know, we're your priority. Yes, we have the money to last for such and such. And so it was just kind of like, why would you lie? You could have just told us to begin with and now you've made it worse. And not just for us, for all the other lifetime winners. You know, I played this game by their rules. And then it was like I won because I did this. I won because what you set out, I did, and it came back, you know. And so it was just kind of like, it's the trust, yeah, and the deception is the hardest because it's like it didn't really need to happen that way.

18:21That's all for today, Tuesday, October 7th. The Journal is a co-production of Spotify and the Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening. See you tomorrow.

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