Transcription
If you watched a Trump rally on the right-wing outlet Newsmax recently, it might have looked a little bit like this. You can see here: you've got Trump on the left side doing his Trumpian thing, and the entire right side of the screen taken up by an ad for American Hartford gold coins. Trump's speech, special to add blairs for offer details, text Trump to this number now.
This ad was particularly intrusive and notable, but far from a one-off for Hartford or the entire sketchy world of gold IRAs. In this world, salesmen and hucksters try to shake down scared seniors and get them to shift their retirement funds from their traditional IRAs and 401Ks into gold coins that these companies sell at an exorbitant markup. According to analysis for the Washington Post, "Since October 2020, email newsletters distributed by Newsmax have included more than 1100 ads for gold IRA companies—nearly a quarter of all Newsmax email ads reviewed by the Post—at a thousand dollars to 5 thousand dollars each." According to Augusta Financial records from 2016, also reviewed by the Post, the ads likely generate more than a million dollars a year in revenue for that company.
Now, conservative influencers and politicians: they also regularly hawk these products. One email that went out from American Hartford, that same company, included an endorsement from Bill O'Reilly. Ted Cruz's podcast has featured ads from the company. Rudy Giuliani called Hartford "the experts I trust most." Companies like Hartford prey on real economic anxiety, triggered by both actual and hyperbolic claims, to offer a supposed solution that, in reality, is just robbing seniors blind.
The Post talked to one retiree named Ed DeSanto, who was lured in by the ads he heard on some of his favorite channels and shows. He was persuaded to invest a 100,000 dollar lump sum payment from his pension into a Hartford gold IRA. Little did he know, the gold and silver he was purchasing had been marked up 92 percent. That means that his 100K only netted him 53,000 dollars in actual value. In other words, they basically just stole about half of his money.
A recent SEC complaint against another similar company, Red Rock Secured, reveals even more details about exactly how these scams work. According to a company email that was obtained by the government, Red Rock Secured specifically targeted people who were "right-wing conservative, 59+ years of age, male and female, interest in retirement investments, owns a 401k or IRA, and anyone who works for the government and owns a Thrift Savings Plan." This type of fraud targeting is called an affinity scam: you portray yourself and your company as having some sort of shared interest or belonging to a common group; in this instance, it's conservatives opposed to Joe Biden and Democratic policies. Companies in the space use trusted right-wing figures and networks for their advertising—places like Fox News, Newsmax, conservative podcast hosts. Affinity scams really prey on the natural human inclination to trust people who are in your in-group and allow political influencers to monetize their audience trust, profiting off of scamming the very people who are most supportive of their careers.
Given that mainstream advertisers increasingly steer clear of hard-right content, the ad space is cheap, and the audience of disproportionately elderly people is ripe for scamming. In the specific case of Red Rock Secured, the government alleges that the company outright lied to their customers. In one instance, they told a customer they would be charging him a mere 1.83 fee and that the customer would also be receiving 15 in "bonus medal." In reality, Red Rock charged the customer a 130% markup, and there was no bonus medal, whatever that is. The government also claims that, in order to establish credibility, a top Red Rock executive claimed he had a PhD in economics and a PhD in international markets, and he compelled other employees to refer to him as Dr. Tony Spencer when transferring customer phone calls to his line. He also claimed that he had been working with clients for over 25 years. Of course, in reality, he had no such degrees and had been working the space for at most 11 years, and that work appears to have mostly entailed scamming people.
These gold bug scams go back a long time, though, and they significantly predate even the Biden era. Back in the heyday of Glenn Beck's Fox News show, following the financial collapse during the rise of the Tea Party, Beck leaned hard into gold as a safe haven for troubled times. In an article written at that time, Mother Jones documented how his program, increasingly facing mainstream advertiser boycotts, would not only host gold bug ads but would also feature entire segments dedicated to the importance of hoarding gold. As they wrote, "Tune in to Glenn Beck's Fox News show or syndicated radio program, you'll soon learn about the precarious state of the US dollar—currency on the verge of collapse due to runaway government spending, a ballooning national debt, an imminent Zimbabwe-style hyperinflation. To defend yourself against the coming financial Holocaust, Beck explained on his radio show last November, you need to 'think like a German Jew in 1934, maybe 1931, and that means thinking about buying some gold.'"
An intellectual framework for these scams, though, goes back even further—more than 100 years—to debates over the gold standard, association of gold with libertarian politics. The gold standard, in this ideological worldview, is meant to check the excesses of the progressive welfare state—gold being the pure store of value versus paper money, which can be corrupted by crooked politicians. So, couple this ideological inclination with genuine economic precarity, partisan fear-mongering, and sell it from the mouths of trusted figures, and you've got a personal financial disaster just waiting to happen.
No accident that these gold scams are back with a vengeance at a time of massive anxiety among our elderly about how they're going to afford to live out their retirement—something many say they actually fear more than they fear death. According to a recent study, 80 percent of American households with older adults are either currently financially struggling or are at risk. The rise of market-based retirement plans over defined benefit pensions means that seniors genuinely do find themselves more at risk to the whims of the market and vulnerable to potential disaster and crash than previous generations. Desperation and fear, of course, breeds vulnerability. These influencers taking advertiser cash to scam their own audience without any scruples: they should be ashamed of themselves. The government needs to do a lot more to crack down on these scams to protect consumers and, more importantly, to ease the precarity that has left so many such easy prey. For all of you out there, just don't be an easy mark. Just because someone you like is selling something doesn't mean they have your best interests at heart. And these things, Sagar, have so, so proliferated.
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