Media Extortion From Charities, Insurance & other scams?

Do you think media oligarchs should get a cut every time you donate to charity, buy insurance or make many other purchases? With our current economic system you may not always have a choice, especially if you don't pay attention to how many organizations spend the money they collect from you. Even if you do pay attention, you may not have access to reliable information to make your decisions, although there are some cases where you can minimize the amount they virtually extort from the public, thanks to the fact that a fraction of 1% controls over 95% of the media and they treat speech like a commodity, that is far from free.

Treating speech as a commodity brazenly contradicts the fundamentals of our economic system; or at least it wiould if critics of the system had a fair chance to get their views across, which they don't since speech isn't free. The basic principles of our competitive economic system, which almost go without saying now, are that business compete by providing a better quality product, better service or a lower price, which sounds good, and would be good if it's still true. However many industries, including insurance, charity, weight loss programs etc. compete primarily by selling the most effective propaganda ads, which drive their bureaucratic expenses up, without improving the quality of their service or product, or worse they make it even less effective, which is the case with insurance and charities, among other things.

To put it simply, the more they spend on deceptive advertising, the less they have available for insurance claims, care for a charitable cause, or any other product being advertised; and the ads have an incentive to distort the truth whenever they can to increase profits or donations. When corporations or charities have enormous advertising budgets, often with strong appeals to emotions and little or no fact checking, a large part of what they're selling is propaganda, with the media taking a large cut, not the product, service, or charity they claim to be selling.

Fortunately there are some charity accountability groups that help expose the biggest frauds; unfortunately, some of these organizations, including "Charity Navigator," have given surprisingly high ratings for some major charities which have been caught in repeated scams. Fortunately they do expose some of the biggest scams including 10 Charities Overpaying their For-Profit Fundraisers; these 10 charities spend more than 50% of its budget paying for-profit fundraising professionals to solicit your hard-earned money, and only between 5% and 27% is directed towards its programs and services. There are other smaller charities that are even worse, often raising money through telemarketing or other means, and either spending almost all of it on fundraising and pocketing the rest or only spending one or two percent on charities. These aren't on TV, which would draw more scrutiny, and when they get caught they often shut down and start right back up again under a new name.

One of the biggest charities advertising on TV, the ASPCA, which didn't spend nearly as much money on advertising twenty to thirty years ago, isn't nearly as inefficient as these charities, but it's far from the most efficient charity either, and some critics raise doubts about the leading fact checkers. Activist Facts have raised even more doubts about the ASPCA, including the fact that they don't necessarily give much, if anything to local SPCAs, which many people are unaware of and they reviewed scandals both recent and years or decades old. Furthermore, if you accept the ratings from Charity Navigator, both Pet Smart and PAWS Chicago spend less than a quarter of the percentage on fund raising; they report that ASPCA spend just over 20% on fund raising while Pet Smart spends less than 2% and PAWS Chicago less than 5%, although further fact checking them before donating is advisable. Those wanting to donate to protect animals might be far better off donating to local shelters, which might include local SPCAs that may not get a cut of the donations collected through these commercials, while the media does get a cut.

However some charities advertising on television have a much worse track record including Wounded Warrior Project which I went into more in Wounded Warrior Project finances War Propaganda with donations five years ago. According to Charity Navigator they spend about 24% of their revenue on fund raising; however Paddock Post indicates the waste is higher, Where Does $100 to Wounded Warriors Go (2019)? 07/16/2020 and they also report on Executive Compensation at the Wounded Warriors 02/09/2018 they have fifteen executives making more than $100,000, thirteen of those make over $200,000 and the highest paid person, while they were being caught in numerous scandals, was making over $600,000, yet they have relatively high rankings on several Charity review organizations, including Charity Navigator.

Shortly after that I reviewed "Mind of the Market" by Michael Shermer and I immediately recognized that World Vision, which he provided positive propaganda for, without questioning how much they spent on fundraising, which had to be a lot judging by his review; and in addition to that I Googled them and found out they were involved in several scandals, some going back decades. When I checked back again a couple years ago in We Must Become The Media And The Scientists! I found that there were even more scandals; and while preparing this article I checked again and found even more which are listed below. Despite all these scandals they're ranked fairly well by several charity watch groups including Charity Navigator, although they don't make their best rankings.

Now that over 95% of national media is controlled by a fraction of 1% and that tehy get their funds and profits from selling these deceptive ads they have an incentive to minimize coverage of these scandals, if they cover it all. Some of the best reporting on these scandals either come from smaller organizations that few are familiar with or it took place before the consolidations of the media was complete, including the following article, which raises many questions that are still relevant today:

TV CHARITIES: LET THE GIVER BEWARE 01/20/1985

CHARITY BY TELEVISION: The tube sells everything from new cars to light beer to starving children in Ethiopia. You know what you’ve got on the former--but how can you tell that the starving children are getting fed with your dollars? A report on TV fund raising by David Johnston and Jennifer Leonard, Page 3. They all get sold on TV--new cars, light beer and starving children from the Third World.

People who are moved to spend their money on the first two pretty much know what they’re getting. But what about the money that people spend as donations to feed children in faraway lands?

How do people know whether TV charities that ask--nay, plead and beg--for contributions will spend the money wisely, or even spend it as they promise?

For the most part, donors don’t know.

TV and charity have formed a grandly profitable partnership that is one of the last great unregulated financial frontiers in America.

TV fund raising is a booming, fiercely competitive business that leaders in the field say brings in well in excess of 1 billion tax-deductible dollars annually. TV’s growing sophistication at mastering the emotional skills to separate people from their money is being adopted by TV charities.

The biggest TV charity, World Vision Inc., based in Monrovia, broadcasts videotaped shows from a stage featuring giant clockworks and the theme that “time is running out” for a starving child somewhere.

A carefully worded appeal for money is made every three minutes on World Vision’s programs because research shows that is the most effective approach, according to Russ Reid, the Pasadena advertising executive who produces these and many other fund-raising shows. Such appeals helped generate $128 million in donations to World Vision last year--or one-third of a million dollars every day.

The problem of not knowing whether a TV charity does what it claims was illustrated Jan. 11 when the news broke that the Ventura County district attorney is investigating International Christian Aid (ICA) based in Camarillo. ICA, a major TV charity, raised $33 million worldwide in 1983.

ICA purchased 49 spots on Cable News Network, at a cost of $500 to $4,500 a spot, asking for money to aid starving Ethiopians. It also aired appeals on other stations including KHJ-TV, Channel 9, in Los Angeles.

But no evidence exists that ICA has done any relief work in Ethiopia.

ICA founder L. Joe Bass denies any wrongdoing. He told a press conference last week that the charity has bought $35,000 worth of food and medical supplies to send to other relief groups in Ethiopia. Bass said he assumes these supplies are sitting on a dock “somewhere” awaiting shipment to Addis Ababa. Complete article

This was published thirty-five years ago, yet little or nothing has been done to increase accountability; if anything, it may be much worse, since the consolidation of the media escalated in the nineties, and we now have only five or six corporations controlling over 95% of national media and some of the largest remaining media outlets, including the Los Angeles Times, which published that article, are owned by billionaires.

World Vision doesn't advertise nearly as much as they used to, possibly because they've been caught in way to many scams, but there are many more fraudulent charities, or at least ones that spend too much on ads, to take their place. Even though World Vision doesn't advertise nearly as much as they used to they still keep coming back, otherwise they couldn't get caught in new scams. If you Google their ads, you'll find them, and it's clear they're still running them on some TV stations even though I haven't seen many if any in years. Wounded Warriors was one of the rare charity scams to actually be exposed on national TV about six years ago, and there ads stopped for several years before gradually coming back, after people had time to forget the scams, which were never addressed.

Many business ads are also incredibly obvious scams, often even worse than charities, including just about any financial ad selling pooled risk like insurance, which I've reviewed before, and aftermarket warranties, which operate on the same basic financial principles. Just like insurance, aftermarket warranties have to cover expenses, including advertising, which makes it less efficient, and make a profit before paying for repairs, which means they have to charge more than the warranty is worth or refuse to cover repairs, using one excuse or another to stay in business and make a profit. Once you understand fundamental principles of financial scams it's easy to recognize them and often find others exposing the scam including the Better Business Bureau which reports many complaints with CarShield They rarely ever provide reviews this bad. It should be obvious that Ice-T and many other celebrities are obvious scam artists.

This scam is so obvious that even one local news outlet from Atlanta exposed their scam a couple years ago, Investigation finds extended warranty company falls short on coverage 08/26/2019 Their consumer advisor Clark Howard said, “If you want an extended service contract or warranty on your vehicle, only buy the manufacturers own. If you have a Ford, buy a Ford. If you have GM, buy a GM, Toyota, etc. That's the only way you know the money you're spending will actually work for you.” I would go one step further and recommend that consumers settle for the standard warranty, and if they consider it inadequate they might want to take their business elsewhere. Good manufacturers want to preserve their reputation and they make their money selling the product not deceptive financial services.

The fact that this news station even reported it is extremely rare, and it's virtually guaranteed that they didn't get any business from CarShield, which is still buying an enormous amount of ads just about everywhere else. This is why commercial media is so reluctant to expose these scams, but occasionally they do try to get brownie points for drawing attention to scams and forcing them to pay one claim here or there, presenting the media as the hero.

Diet programs and exercise programs are among the biggest scams, constantly trying to convince people they have to spend more in order to lose weight or exercise. More often than not, if people buy expensive exercise equipment, it's a matter time before they start hanging their clothes on it without using it. The best deals on low fat food don't require buy a specific brand name and letting someone else dictate your diet, especially since few stick to those diets.

On the other hand, those that do the best job losing weight and staying fit, don't need to pay those selling scams in all these ads; they just eat less and exercise more without paying extra for it. Many people may have motivational and insecurity problems; however, giving money to someone pitching a scam isn't going to help solve that, and they often jump from one scam to another. One possible solution for some people might involve joining an exercise group that meets in public places. These can be organized for little or no money among friends. If there's a professional group leader meeting in public parks, they shouldn't have to charge much money, but non-professional groups would probably be better for those willing to organize them. In some cases, depression or other emotional issues might be a factor in their weight problem, but falling for scams certainly won't make those problems better, if anything they make them worse.

In at least one case Dr. Oz, was implicated in a diet product that proved to be a scam. Dr. Oz isn't the only high profile pundit or media expert that has been implicated in fraud; Drew Pinsky and Phillip McGraw have both been implicated in major scandals, including using pseudo-science to treat drug and alcohol problems while being more concerned with increasing ratings than with treating patients.

So called media experts that have financial conflicts of interests like Dr. Oz, Phil or Drew, aren't the exception, they're the rule. A lot of these professional scam artists have been introduced on Oprah Winfrey's show, including Dr. Phil, Dr. Oz and Suzy Orman, all who have been caught in major scams. They all took advantage of massive media coverage from mainstream media, but were usually only exposed in their scams at a much lower profile, so they can repeat them over and over again.

Officially the media is required to serve the public's interests, which to some degree they may have done decades ago; however after the consolidation of the media so that six corporations control over 95% of national media and massive amounts of deregulation for all corporations any accountability the media once might have had is now gone. They're now a for profit organization with little or no accountability that maximizes their profits by selling fraudulent ads.

Almost all the national media pundits that you see on TV and many local news people are all multimillionaires. They don't get that rich be exposing the scams they sell, they get rich by looking the other way giving tacit support for all these scams! In most cases, if you see something with a large advertising budget on TV you would be better off researching them before buying them, even if the scam isn't quite so obvious. If you rely on traditional media there's little or no chance that you'll find the best exposes of these scams, but in many cases, if you check alternative media or start Googling any given product, service or charity, you might find they're involved in scams.

One thing we should never forget is the old saying, which applies to most commercials, "If it sounds to good to be true, it probably is!"

The following are some additional sources or related articles:

These everyday ‘scams’ have become so normalized that we hardly even notice them anymore 12/09/2020

Subtle shakedowns that we just accept on a daily basis ....

Here are some of the most popular responses:

Cable TV

“The whole idea of paying was to create a revenue stream separate from that of marketing. There are a few out there (HBO, I think) but generally we pay to access the content and still have to spend 20% of the time sitting through commercials.”

Bottled water

“Like Dasani. Especially in places like an amusement park that marks up the price a shocking amount. Also the average markup of bottled water is 4000%, which is f***ing outrageous, bc water is literally free most places.”

Hospitals

“I recently got an ER bill with itemized prices for the tests I had (a couple hundred bucks total) and then $2600 for ’emergency room.’ Like, all the actual medical things I had done had already been listed. They just tacked this on. It’s like going to a restaurant and getting a bill that says hamburger $8, coffee $2, salad $4, diner $65.“

Ticketmaster

“Basically scammers adding huge mark ups but making it impossible to use anyone else.”

College tuition

“Why aren’t they held to a competitive pricing model as opposed to having to take out a mortgage to go to school? Everyone wants to talk about government paying for college education, but there is no conversation on why is it that expensive anyway? Especially when some unis have endowments in the billions that just the interest on those funds could literally pay the tuition for everyone that goes through the door.“

Funerals

“The funeral industry has insane pricing. Some of the funeral homes and vendors are even predatory, getting grieving families to pay upwards of tens of thousands of dollars, because ‘that’s what the deceased would have wanted.'”

Ink cartridges

“Printer companies make barely any profit off of actual printers, they’re just vessels to make you buy unreasonably priced cartridges.”

Diamond rings

“Basically the entire wedding industry. Starting a new life together? Why not plunge yourselves into thousands of dollars of debt?” Complete article

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Quora: Why are charities allowed to waste people’s donations on TV advertising?

Charity Navigator: American Society for the Prevention of Cruelty to Animals Fundraising Expenses: 20.4%

Charity Navigator: Shriners Hospitals for Children Fundraising Expenses: 6.4%

Charity Navigator: Wounded Warrior Project Fundraising Expenses: 22.9%

Charity Navigator: Covenant House Fundraising Expenses: 14.9%

Charity Navigator: World Wildlife Fund Fundraising Expenses: 20.3%

Charity Navigator: ALSAC - St. Jude Children's Research Hospital Fundraising Expenses: 16.1

Charity Navigator: PETA Fundraising Expenses: 16.1%

Charity Navigator: PetSmart Charities Fundraising Expenses: 1.8%

Charity Navigator: PAWS Chicago Fundraising Expenses: 4.7%

Charity Navigator: American Red Cross Fundraising Expenses: 6.3%

Charity Navigator: World Vision Fundraising Expenses: 8.4%

Charity Navigator: 10 Charities Overpaying their For-Profit Fundraisers These 10 charities spend more than 50% of its budget paying for-profit fundraising professionals to solicit your hard-earned money. They are ranked by the percentage of their total functional expenses spent on professional fundraising fees. As a result, very little of the charity's spending is directed towards its programs and services.

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Where does $1 to the ASPCA go? 02/17/2016 $63 million (33% of revenue): Salaries, Pension, Benefits, and Payroll Taxes; $ 6 million (3% of revenue): Compensation to 23 key employees (avg. $260,869); $27 million (14% of revenue): Advertising and Promotion; Three professional fundraisers were paid $2 million to raise $12 million through direct marketing, fundraising services, and membership appeals. In other words, for every dollar raised, 17 cents was paid to the fundraiser while 83 cents was given to the ASPCA.

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TV CHARITIES: LET THE GIVER BEWARE 01/20/1985

A World Vision Donor Sponsored a Boy. The Outcome Was a Mystery to Both. 08/02/2016 It was their Othman, who turned 18 on Monday but at the time was 5. None of his relatives recalled signing him up for the World Vision program — nor receiving any money. “We want to know: Who took the photo? What was their aim?” asked Othman’s uncle Abdul-Hamid Sabateen, a chicken farmer in Husan, a Palestinian village on the outskirts of Bethlehem.

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