While not illegal, critics say the letter "preys" on older people's insecurities
The Advertising Standards Authority is launching an investigation into a mailshot being sent by the bookselling company, Reader's Digest.
The firm has sent a letter to customers saying they have a chance of winning thousands of pounds - but warns them to keep the information secret.
Trading Standards say the company is preying on the insecurities and vulnerabilities of older customers.
Reader's Digest told the BBC it is dealing with customers' concerns.
The letter, being sent to thousands of customers, appears to promise a big potential prize payout.
It continues: "Do not tell anyone you have received this letter from me, at least not yet...I'm breaking with standard procedure and bringing news that's in your favour."
The daughter of a Reader's Digest customer who received the letter said the company was taking advantage of the trusting nature of many older people.
Helen Mudge said her mother Kath Allen had spent £800 on Reader's Digest products over the 12 months.
She said: "You read these letters, and you know that they're just out to make money. I think that's appalling.
"My mother has dementia, you do hear about other old people who are receiving these letters and they're taken by it as well."
ASA spokesman Matt Wilson said an investigation would be launched into the Reader's Digest promotion.
He told the BBC: "The whole treatment of a prize promotion could be misleading, or it could be a specific claim within it that's misleading.
Kath Allen has spent £800 on Readers Digest products over the past year
"Where we look at those, and find they're problematic, we'll have them withdrawn."
Tony Northcott of the Trading Standards Institute said that while the Reader's Digest letter did not appear to be illegal, it could be seen as preying on the insecurities and fears of an older age group.
He added: "This does concern me because they may be misled and make some purchase which they don't really want to do."
In a statement, Reader's Digest said it had not been previously alerted to Helen Mudge's concerns about her mother, but was now taking "immediate steps" to deal with it.