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Jul 26 2013

How the Right Scams Its Followers

Salon.com has a long article looking at an issue I’ve been writing about lately, how right wing talk radio, magazines and websites are pushing a whole range of get-rich-quick scams and quack medicine nonsense to their credulous followers, selling their mailing list for massive profits to companies advertising those cons.

Last week, preeminent conservative blogger and Fox News contributor Erick Erickson was busted hawking a pricey but dubiously valuable financial advice newsletter to his readers in an ad that turned out to be lifted from a previous ad for the same newsletter sent in the name of Ann Coulter a few years earlier. “I’m happy to support a good friend. Didn’t earn a penny,” he tweeted. Whether you believe that or not may depend on whether you know that his publisher once offered to sell his endorsement, or if you believe, as Alex Pareene has often written, that the conservative movement is, among other things, an elaborate moneymaking venture by which the wealth of the rabid and gullible conservative rank and file is redistributed to already rich celebrities.

The truth is, peddling shady products to your most loyal listeners and readers is the rule, not the exception, and Erickson was just unfortunate enough to have someone notice him, and not the dozen other talkers or news outlets it could have easily been. From miracle health cures, to get-rich-quick schemes, to overpriced precious metals and seed banks, talk radio hosts and conservative news outlets are making a killing by trading their platform and credibility for the hard-earned cash of their unsuspecting listeners.

One of the most common is gold scams:

The most obvious example is gold, the precious metal conservative talkers encouraged their listeners to go all in on during the Great Recession (via the companies that pay them to say that and give them a cut of sales, naturally), but gold has since fallen more than 30 percent from its peak. If you bought when gold was near its high, you could have lost half your nest egg, and analysts say prices could fall another 50 percent. But poor financial advice aside, the real problem came in the particular companies the conservative luminaries ensured their listeners they could trust.

Glenn Beck is the most egregious, with his partnership with Goldline International, which also enjoys endorsements from Mark Levin and, until recently, Sean Hannity and others. Beck cut tearful promotional videos for the company, hawks them passionately on his radio and TV programs, and even designed a coin for the company this year (it reads “mind your business” on the front).

As it turns out, the company’s business model is built on systematically swindling its mostly elderly clientele by talking or tricking them into buying overpriced coins or just sending them different products than they bought, prosecutors in California alleged, leading the company to settle for $4.5 million in refunds to its customers. A judge instructed the company to foot the bill for a court-appointed monitor, who was supposed to ensure the company stopped its alleged “bait and switch” scam.

Not long after that, the company’s former chief compliance officer came forward to say the company was back to its old tricks. “Goldline specifically targets vulnerable consumers with sales tactics designed to pressure those consumers into buying products that would often result in the consumer losing over one-third of his or her investment the instant the purchase is made,” she said in a legal complaint filed late last year.

And yet, Beck’s support is undiminished. The company’s banner ad still graces the top of TheBlaze.com and Beck still touts them on air. “Before I started turning you on to Goldline, I wanted to look them in the eye. This is a top notch organization that’s been in business since 1960,” Beck says in an endorsement on the company’s website.

Midas Resources, Alex Jones’ favorite gold company, sponsors his show and happens to own the Genesis Communications Network, which distributes Jones’ broadcasts. And if you buy coins from Midas Resources, you get a free promotional subscription to The International Forecaster, a financial newsletter published by the late Bob Chapman, who happened to be a frequent guest on Jones’ show (until he died last year), where he warned listeners about the inherent valuelessness of paper money and how they should purchase gold and silver — from Midas Resources, naturally.

The way they sell these and a hundred other scams, especially the medical quackery and survival supplies, never seems to vary. Look at the Worldnutdaily website and you see ad after ad with the same theme: This is what THEY don’t want you to know about, they being the government of course. So click here now and get it before Obama’s stormtroopers arrive to shut us down! That any modestly intelligent person would fall for this is kind of baffling, but it works. Oh boy, does it work:

Renting out the list of people who sign up to subscribe to your blog or radio show is a tried and true money maker. As David Bernstein explained in the Boston Phoenix, “Such lists of proven conservative contributors — who skew heavily toward white, suburban retirees with disposable income — are attractive not only to other conservative groups, but to companies selling financial services, health products, and other wares.” Bernstein found data (from 2009) on the value to advertisers of individual conservative figures, which range from $85 per 1,000 recipients for an email sent under the name of Mike Huckabee or Pat Buchanan, all the way up to $125 for Newt Gingrich — whose distributor, Townhall.com, is owned by the same parent company as Erickson’s — and $135 for Rush Limbaugh.

There’s a great deal of money to be made fleecing the credulous. PT Barnum was wrong only in underestimating the frequency of suckers born.

9 comments

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  1. 1
    slc1

    Old saw, a fool and his money are soon parted.

  2. 2
    daved

    “There’s a sucker born every minute” might have been accurate at the time it was first uttered, but there are only about 500,000 minutes in a year, and there were around 4 million babies born in the US last year. You have to assume that more than 1 out of 8 people is a sucker (almost anyone can be fooled about something, after all).

  3. 3
    Trebuchet

    Meanwhile, here at FTB, I get ads for a “free energy” scam on virtually every page. The latest variation is to color their fake box red, white, and blue and call it “Power4Patriots”.

  4. 4
    left0ver1under

    This is the same fraud and the same people as the “prosperity gospel”.

    The ignorant are always looking for the easy answer, and are always willing to believe when someone offers it.

  5. 5
    Bronze Dog

    This is what is meant by “affinity scam,” isn’t it?

    When I was scrolling, I misread the title as “scares its followers.” Given the rhetoric involved in a lot of these scams, that would also be applicable.

  6. 6
    raven

    The “gays will destroy America” scam seems to be winding down.

    So the fundies are going back to their basics. Demon fighting scams i.e. exorcisms, end of the world scams, medical quackery, and faith healing.

    But they never completely forget any of them. They still babble on about uppity women, nonwhhites, Jews, nonxians, atheists, scientists, elites, college students, and on and on.

    And yeah, most of that money they send in gets spent on luxury goods. But so what. Private jet makers and sports car manufacturers need to eat too.

  7. 7
    fifthdentist

    Here’s one I got this week from Herman Cain on. I like how they blame the small increase on Obama as well as how it slips their minds to mention exactly who wants to cut Social Security, identifying them as “certain politicians”:

    Dear Reader,

    Retirees have received an insulting 1.32% annual increase to their Social Security checks under the Obama administration.

    And the rumors around D.C. suggest certain politicians want to drastically decrease your payments, and soon!

    So when we stumbled upon this weird trick that can add $1,000 to monthly Social Security checks, we knew we had to share it with you.

    Click Here for Details

    Your friends at Newsmax

  8. 8
    Ace of Sevens

    I keep seeing an ad that says “Dallas Pastor Reveals 7 Shocking Biblical Truths on Investing; See How He Turned $40K into $396K.” and an alternate version that says he flipped an Obama blunder to turn his father’s $0K life savings into $396K.

  9. 9
    Ace of Sevens

    Also “How Seniors Can Scoop Up Free $20,500 Checks (See If You Qualify)”

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