Sunday, August 30, 2009

World Reserve Monetary Exchange Exploits Ted Kennedy

Well, if it's not another expensive, opportunistically timed coin collection from the World Reserve Monetary Exchange.

It's the day after Ted Kennedy's funeral, and we've got a full-page, color ad in the Star Tribune promoting "free" Kennedy half dollars.

Full page ad with headline Public to receive U.S. government minted Kennedy half dollars free
(Click on the ad to see it larger.)

How does it work, and what's the free part?

World Reserve offers a "vault tube" of 20 never-circulated, half-dollar coins (face value $10) plus a special Ted Kennedy portrait coin for free, for a total of $10.50 in face value. These two items (the vault tube and the free coin) cost $28 plus shipping. So that's $17.50 over the face value (167%).

A second offer in the ad -- and one that is vastly more emphasized in the ad's visuals -- is a "treasure chest" containing three vault tubes (60 coins) and three "free" portrait coins, one each of Ted, Bobby and John.

Close up of the brown treasure chest box with three tubes of coins and three coins with color pictures of the Kennedy brothers
The coins in these vault tubes have been plated in silver, gold and platinum. This set can be had for "3 payments of $96 and shipping." (Not clear from that language whether the set costs $96 total or $96 times 3 payments, or $288.)

So that means the 63 coins, with a face value of $31.50, will cost you either $96 or $288, depending on what the vague pricing language means. That's either 205% or 814% over the face value.

What is the full price?

I just had to know for sure, so I called to find out what the price really is. The guy I talked to was clearly working from a script, because he used words like "awarded" (congratulating me that I had called in time to be "awarded" the coins) and misspoke when he referred to Ted Kennedy as the "Lion of the State" instead of the Lion of the Senate. I did find out that the coins were minted in 2009.

And what is the price for the treasure chest? You guessed it. It's three payments of $96, or $288 -- a whopping 814% over the face value of the coins ($4.57 per coin). My customer service rep did let me know that the shipping on that offer is free, though. Hey, thanks!

When I demurred and said I couldn't decide right away because I had to talk to someone else about it, and that I would call back, he read me the part of the script designed to pressure me into making a decision on the spot. "I would hate to see you miss out," he said. The coins are available "first come, first served." He offered to put me on hold while I discussed it with whoever I needed to. But I said no, thanks, I would have to call back, and hung up.

What are the coins worth?

Maybe these plated coins are actually worth more than their face value, which would account for their price. It seemed possible to me, a layperson when it comes to coin collecting.

However, it appears this is not the case. WikiAnswers says there is "some small after-market for them but they have no additional numismatic value because they are technically classed as altered coins." This is confirmed on the Heritage Auctions site, which says, "Gold plated coins are not mint made. Most of the gold plated coins are common date coins. Unfortunately gold plated coins have no numismatic value."

Even if the plated coins had at least their face value to start, and increased in value by 500% (the amount of increase seen for uncirculated Eisenhower dollars, a statistic dangled by the writers of the ad to make readers think their coins will appreciate in a similar way), anyone who purchased the plated coins would still be 314% short of what they paid to the World Reserve.

Update: In a cease and desist letter I received from an attorney on behalf of the World Reserve, I was told: "Each 2009 issued Kennedy half-dollar in uncirculated condition has a current collector value of $2.00" (according to the Guide Book of United States Coins), and is being sold by the United States Mint on its website in a plain paper wrapper of 20 coins for approximately 83 cents per coin plus shipping (two rolls of 20 coins, selling for $32.95 + $4.95 shipping).

So the coins appear to have a current value of either $2.00 apiece or 83 cents apiece, depending on which of these pricing sources you rely on. This assumes that the coins' alteration by plating has not affected their value negatively.

Also note that the 20 plain, unaltered 2009 Kennedy half dollars in a vault tube offered by World Reserve for $28.00 plus shipping can be purchased directly from the U.S. Mint in a paper wrapper for $16.25 plus shipping. The only difference is the plastic tube vs. the paper wrapper.

Puffery and blather in the ad copy

As always, the ad is presented as if it were a regular page in the newspaper, including a dateline at the beginning, noted as (UMS). UMS stands for the Universal Media Syndicate, the ad agency that shares a parent company with the World Reserve.

The ad's copy is full of puffery terms. The Kennedy half dollars "have been lavishly covered" in gold, silver and platinum. In reality, it's likely to be a microthin amount of the material, since that's what plating is.

The coins come packaged in "specially sealed crystal clear vault tubes"...better known as plastic, which I think we all know is generally transparent. The word "crystal," however, is being used to associate common plastic with a much more valuable and desirable material.

One paragraph quotes someone named Robert Anthony, director of the World Reserve: "The never-circulated U.S. Gov't minted Kennedy half dollars are one of the highest denomination coins ever produced by the U.S. Mint." Which means exactly nothing. The U.S. Mint makes coins in different amounts, including dollar coins. They make half dollar coins, too. So what?

Another paragraph has Anthony raving about the treasure chest with its coins "lavishly gilded in gold, silver and platinum." He goes on to say "You just won't believe the expression on people's faces when you hand them these. It's like you just gave them a Million Dollars." Odd use of capitalization there -- its clearly intended to make the words "million dollars" jump out of the copy.

Plus $3 to the Granted Wish Foundation!

At the end of the ad copy, Robert Anthony is once again quoted:

And, in the tradition of John, Bobby and Ted's dedication to helping others, The World Reserve is contributing three dollars to the Granted Wish Foundation for each caller who calls and beats the order deadline.
In a previous post, I found that the Granted Wish Foundation is part of the same network of companies as the World Reserve, all associated with Arthur Middle Capitol Holdings, a marketing conglomerate started by one Rodney Napier. The Foundation's mission is to "provide wish fulfillment to disabled, disadvantaged and deserving individuals and families."

Since I'm not located in Ohio, I can't fully comment on the Granted Wish Foundation's effect in their local community. However, I can say it instantly creates several blips on my fraud radar.

First, there is a serious vacuum of discussion about the work of this foundation. Googling the organization's name returns links to pages from the Foundation's own website, podcasts or YouTube channel, a bunch of mentions of Cleveland Browns quarterback Brady Quinn making an appearance on behalf of the Foundation, and a few media articles about its executive director.

What's lacking is discussion about any work they've done (except on the testimonials page of their own site). Wouldn't you think their name would turn up repeatedly somewhere on the Web if they were doing good work for people? Update: There is one story from the Roanoke (Virginia) Times about the Foundation purchasing a $600 tricycle for a young man with cerebral palsy.

Second, they don't publish an annual report on their website, nor do they provide a breakdown of their expenses to show what percent is spent on administration and fundraising vs. program.

Third, Rodney Napier, head of Arthur Middleton Capital Holdings, is listed as one of two board members for the foundation on the About magazine site; I'm not sure if this is the full extent of their board or not, since there is no board list on the Foundation's own site. I'd love to see a copy of their IRS 990 form (also not available on their website), which is another place where financials are disclosed and conflicts of interest are monitored.

Looking at board lists, 990s and financial statements is key to assessing a nonprofit's worthiness, according to the Charities Review Council. This information "should be found on the nonprofit's web site, preferably in one place so that the same content can be reliably printed and mailed upon request." (See the CRC's accountability standards here.)

In honor of Ted Kennedy?

In my opinion, it's an odd way to honor the memory of Ted Kennedy: by making a $3 donation to a foundation with no clear track record from payments made for products that aren't worth nearly as much as the asking price.

But the World Reserve doesn't really honor Kennedy's memory, of course; they just see his death as a marketing opportunity.


Other resources on the World Reserve Monetary Exchange:

1 comment:

Ms Sparrow said...

I was amused that you labeled the post as "Sucker born every minute". But then, I realized that the "suckers" are decent (although naive) people who think they are doing a good thing and honoring a good man. The most appalling thing about these scams is the contempt the scammers have for their "suckers". May they all die in poverty!