Bill O'Reilly Duped by Faux News?

Last Updated Sep 15, 2010 12:18 PM EDT

The email promised "$1,196 per week, tax free!" by exploiting supposedlyforgotten "Constitutionally-guaranteed" government payouts.

But it was the next statement that intrigued me: "Watch Fox News' Bill O'Reilly and esteemed accountant Bill Spetrino reveal safe and ultra-profitable steps...."

I knew the "forgotten" investment was a scam or misrepresentation. (I authored a book called Investing 101 and assure you that I would not "forget" any investment that truly paid huge, safe returns...nor would you.) But why would conservative talk show host Bill O'Reilly promote investment flim-flam? O'Reilly hasn't yet responded to my email, but my guess is that he was an unwitting dupe in a clever product pitch designed to look like a news show.

The faux news show (linked here) starts with an anchorman sitting at a desk in front of a glowing "Economic Crisis Summit" video screen. The anchor welcomes O'Reilly and gets him talking about Obama and taxes -- O'Reilly's normal bailiwick. Then he asks: "How can you invest in this treacherous environment?" O'Reilly suggests buying depressed stocks that pay dividends, which plays right into the anchor's hand.

As soon as O'Reilly leaves, the next "guest" is a smarmy-looking "accountant" named Bill Spetrino, who purports to agree with O'Reilly and offers a newsletter called "The Dividend Machine." But he adds that he has "something even better." Spetrino maintains that he's written a report about a "forgotten, seven-state Constitutional Clause" that guarantees generous tax-free "IRS payouts" of $1,196 or more. And, he's agreed to provide this report "free" to viewers of the show produced by Newsmax.

What's the investment? The dowager of the investment world -- municipal bonds. Municipal bonds are issued by states, cities, counties and government agencies to finance everything from parks to water treatment facilities. These bonds do pay tax-free income, but at low rates of interest. To get the promised $1,196 weekly return, you'd have to invest about $2 million in munis at today's rates.

If you got the report, you'd likely toss it and figure that "free" advice is often worth exactly what you paid for it. What you didn't know is that you've actually gotten caught up in "a free trial offer" that's going to quickly cost you.

What the show is really peddling is Spetrino's $99 investment newsletter, which you will subscribe to automatically, if you're gullible enough to ask for his "free" reports. How? You must pay $1 on a major credit card to get the free reports. (Spetrino justifies the $1 fee in the video by saying that people don't pay attention to free advice, so he's charging a token just to get you to listen.)

But if you stop to read the lengthy "terms and conditions" of the offer, you'll find (and I quote):

"All subscription fees must be fully paid before you will granted access to the service.....If you cancel your subscription within the first 60 days of being granted access to the service, Newsmax will provide you a full refund...."
While Newsmax says it's offer is "no risk" because it promises a refund if you don't want their investment advice, plenty of consumers have complained about misrepresentations.

Michael Galvin, vice president of communications at the South Florida Better Business Bureau, reports that Newsmax has received 52 complaints in the past 36 months. Lately, they're all about unauthorized charges on credit cards.

"It appears that they've been doing business for a while and haven't had a lot of trouble until recently, when they appear to be trying to sell a newsletter," Galvin said.

All the recent complaints involve charges ranging from $49 to $99 on credit cards, often after the consumer has attempted to "cancel" their subscription, Galvin said.

The ComplaintsBoard, an online consumer complaint site, lists several identical gripes.

Newsmax spokesman Scott Rosenbloom says the company takes great pains to disclose their charges upfront and will refund charges when consumers are not satisfied. As for whether Bill O'Reilly knew that his comments would be used to tout Spetrino's newsletter, Rosenblum won't say: "I can't speak for him."

O'Reilly has yet to return my email from last week. I also put in a call to Fox News' p.r. department. When the O'Reilly camp comments, I'll update you. Stay tuned.

UPDATE: Shortly after this was posted, Newsmax pulled the video and took all references to O'Reilly out of the newsletter, linked above. Neither O'Reilly nor Fox News have responded to my requests for comment. I received the new "Dividend Machine" pitch -- nearly identical to the old, but sans O'Reilly references on 8/18/2010.
For the latest news see: Bill O'Reilly Update: This is Not a Scam
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