Always take the lump sum.

Publishers Clearing House, the sweepstakes company famous for its “$5,000 a week for life” prizes, filed for Chapter 11 bankruptcy in April. That may cause past winners to go bankrupt, too.

In PCH’s filing, the company said it has liabilities between $50 million and $100 million, which includes the lifetime payments promised to past winners.

Following the bankruptcy, PCH was acquired by mobile gaming company ARB Interactive. Under the terms of the sale, ARB Interactive did not agree to continue payments to these “forever” prize winners. 

Many of the winners, who relied on the checks for their living expenses, were never notified of the company’s financial issues.

“I thought this was going to go on for the rest of my life, so I didn’t really have to worry about money,” a past winner, John Wylie, who won $260,000 a year for life in 2012, told news station KGW-8 in Oregon. “It’s not a good way to treat anyone. Pretty sure I’m going to lose my home.”

“Why didn’t somebody give me a heads up? ‘Hey, we’re going out of business,'” he added.

KGW-8 also spoke to Matthew and Tamar Veatch, a couple who won the lifetime payout in 2021. The pair, both Army veterans with disabilities, said the money suddenly stopped arriving. “It’s unfortunate there was no warning,” Matthew Veatch told the outlet. “The big letdown for me is that we trusted them.”

Despite the situation for past winners, the company’s new CEO, Owen O’Donoghue, has launched a new “Prize Protection Program.” This structure aims to secure all future prize payouts using funds held in FDIC-insured escrow accounts.

“I am thrilled to join Publishers Clearing House at this pivotal moment,” Mr. O’Donoghue said. “With the Prize Protection Program, we are combining PCH’s iconic sweepstakes heritage with modern, secure digital experiences, ensuring every winner is protected while introducing mobile-first gaming that excites and engages users nationwide. We believe programs like this represent an industry best practice, and such safeguards should be standard to protect all sweepstakes participants.”

But the company added that it is not responsible for the payment of prize money won before it acquired Publishers Clearing House on July 15. “We recognize the impact this has had on past winners and the disappointment caused by the bankruptcy process,” an ARB Interactive spokesman told KGW-8.

PCH dates back to 1953, when a couple and their daughter formed a business run out of their Long Island, New York, home that sent direct-to-consumer mailings soliciting people to subscribe to magazines. The company launched direct mail sweepstakes in 1967 and created its in-person “Prize Patrol” team in 1989, surprising winners at their front doors with oversized checks.

But everything changed with the internet. “While PCH’s direct mail and e-commerce programs were profitable for decades, changing patterns of consumer behavior, costs and competition, along with a declining pool of new prospecting names, negatively impacted the business, resulted in losses beginning in 2022,” the co-chief restructuring officer for PCH, William Henrich, wrote in a court declaration in April.

PCH also drew scrutiny from regulators with concerns about consumers mistakenly believing that buying magazine subscriptions would improve their chances of winning its sweepstakes. The company was hit with several expensive legal settlements over the years, paying $18.5 million to resolve allegations from the Federal Trade Commission in 2018.