For the rest of the year, we’re revisiting columns from our long-running series “I’ve Always Wondered.” Each week, Marketplace’s Janet Nguyen tackles one of your questions about money, business or the economy — no matter how big or small. 

Denise Haynes from Cambridge, Massachusetts, asks: 

Is the Publishers Clearing House Sweepstakes real? Are the people shown in the commercials paid actors?

Publishers Clearing House has been visiting houses across America for decades, surprising sweepstakes winners with giant checks ranging from thousands of dollars to millions. 

Ken Breckenridge, a PCH contestant who won $50,000 in 2022, said he was able to use that prize money to help out family members. 

“It was a blessing, so I paid it forward. I didn't keep that much of it. I gave a lot of it away,” said Breckenridge, who’s from Hot Springs, Arizona. 

While there are scams that use the PCH name, it is a legitimate contest. All of the winners featured in its commercials are real people, said Darrell Lester, a former PCH executive and the author of “Downfall of an Icon: The True Inside Story of Publishers Clearing House.” Lester worked at the company from 1973 until 2002.

But although the money is real, PCH has been mired in controversies, including claims that it has engaged in deceptive marketing. The company, which once made money through magazine subscriptions and merchandise, filed for Chapter 11 bankruptcy earlier this year due to high operational costs and the rise of online shopping. It was then acquired by the mobile gaming company ARB Interactive.

PCH contestants who had won the company’s $5,000 a week “forever” prize will no longer receive it. 

“This feels like a nightmare. I thought this was going to go on for the rest of my life, so I didn’t really have to worry about money,” John Wyllie, one “forever” prize winner, told NBC affiliate KGW.

An ARB Interactive representative told Marketplace that as part of its acquisition, it only assumed responsibility for prize obligations awarded after July 15, 2025. 

“While ARB is not responsible for prize obligations incurred before our acquisition … we recognize the impact this has had on past winners and the disappointment caused by the bankruptcy process,” the representative said.

The representative said the company is aiming to protect future prize winners. 

“Looking ahead, we are planning to implement a robust, paying structure that stands separate from ARB to ensure that all future PCH prizes are honored, regardless of ARB’s financial status,” the representative said. 

How the economics of the PCH Sweepstakes worked

PCH’s revenue stream now comes through digital advertising on its online games that give consumers the chance to win cash prizes. But PCH started by selling magazine subscriptions, and would later offer merchandise.

The company then used that money to fund prize winnings, but consumers could enter its sweepstakes contests without paying for any of its products. 

“Back in the early days, we would sell a magazine subscription for, say, $10. We would only give $1 of that to the magazine publisher. We’d keep $9 of it, so we have $9 in revenue, and that's plenty of money to pay for a contest,” Lester said. 

Basically, the consumers funded the prize money, Lester said.

In some cases, PCH didn’t have to remit any money to the publisher since they still benefited in other ways, Lester said. 

“They're in it to increase their circulation. The magazine publisher makes their money with advertising,” Lester said. 

The company, which started in 1953, hit its peak in 1992 with over $1 billion in annual sales, Lester said. 

The company turned “dozens upon dozens” of Americans into millionaires, Lester said. 

In PCH’s peak days, the company would dole out prizes as high as $10 million, but it wasn’t paid out all at once, Lester explained.

Those $10 million winners would be paid gradually over the span of 30 years through an annuity purchased in the consumer’s name, Lester said. Annuities are financial contracts in which you pay a lump sum or make a series of payments to an insurance company. The company will then invest that money, guaranteeing you a future stream of income.  

That $10 million annuity would cost the company $3 million, Lester said. 

$70 million settlements, declining revenue and bankruptcy 

Between 2000 and 2001, PCH settled with all 50 states for a total of $52 million over allegations that the company engaged in deceptive marketing. 

State attorneys general had sued PCH, saying that it misled consumers into thinking they would win prizes or had already won prizes if they purchased magazines from the company. Going forward, the company had to include a fact sheet that told consumers  that they did not need to purchase products to win a prize. 

Sales ended up declining amid negative press for the company, Lester said. 

However, Lester said PCH implemented what was called “the high-activity suppression program,” which identified any consumers who were ordering too many products from PCH. The company would then stop mailing them. “It cost us a lot of money and profits, but it was the right thing to do,” he said. 

Over the past couple of decades, PCH had to navigate additional challenges, including the decline of the magazine industry and the rise of competitors like Amazon, which threatened its merchandising business, Lester said. Annual revenue dropped from $854 million in 2017 to $182 million in 2023. 

In 2023, PCH also had to settle another lawsuit, this time with the Federal Trade Commission, over deceptive practices. As part of the settlement, PCH agreed to pay customers $18.5 million. The FTC alleges that PCH used “manipulative phrasing and website design,” known as dark patterns, in order “convince consumers that they needed to buy a product of some kind to enter the company’s sweepstakes or increase their chances of winning.” 

Eventually, the company filed for bankruptcy in April of this year, leaving “forever” prize winners without a guaranteed stream of income. Lester said that at some point after he left the company, PCH stopped funding prize money using annuities and instead began using current profits. 

He calls this move “a cardinal sin.” 

“That's the worst thing in the world a sweepstakes company could do. That's like going to a bank that is FDIC-insured and finding out the FDIC insurance was fake and the money you put in is gone,” said Lester, referencing the fact that the Federal Deposit Insurance Corporation protects deposits of up to $250,000 at banks that are insured by the agency. 

But going forward, ARB Interactive says it will fund prize winnings using “investment-grade assets” in FDIC-insured accounts, according to a September press release. 

Even with this recent misstep, Lester said he wants the company’s reputation to be restored. 

“I hope the company survives,” Lester said.