Shining a bright light into the dark corners of the shadow-world of literary scams, schemes, and pitfalls. Also providing advice for writers, industry news, and commentary. Writer Beware is sponsored by the Science Fiction and Fantasy Writers of America, Inc.

May 4, 2017

The Law Finally Catches Up With Tate Publishing & Enterprises

Posted by Victoria Strauss for Writer Beware



Today, Oklahoma Attorney General Mike Hunter filed eight felony charges and one misdemeanor charge against Ryan and Richard Tate, respectively CEO and founder of vanity publisher Tate Publishing & Enterprises, for alleged fraudulent business practices.

According to local news station KFOR,
The charges include four felony counts of embezzlement, one felony count of attempted extortion by threat, two felony counts of extortion by threat, one felony count of racketeering and one misdemeanor count of embezzlement.

Since the businesses ceased operations in January, the Attorney General’s Consumer Protection Unit has received 718 complaints from authors or musicians who contracted with the companies.

Complaints from customers range from failure to deliver products and services that had been previously paid for; failure to pay royalty earnings, per contractual agreement; and refusal to return files unless the customer agreed to pay a $50 processing fee.

“The means by which Ryan and Richard Tate conducted business to defraud individuals from across the country is unconscionable and a blatant disregard for those who entrusted them to produce their work,” Attorney General Mike Hunter said. “I appreciate the dedication and hard work by the agents and the attorneys in the Consumer Protection Unit, who put this case together.”
Among other findings, investigators discovered that money received from authors was routed, via Tate's business accounts, directly to the personal accounts of Ryan and Richard Tate.

The Tates have been apprehended, with bond set at $100,000 each, and ordered to surrender their passports.

There's more coverage at the Journal Record.

This is good news. Tate is one of the most unscrupulous vanity publishers Writer Beware has ever tracked, and its callous disregard for authors, staff, and creditors was on full display long before it closed its doors last January, amid mountains of debt, hundreds of author complaints, and multiple seven-figure lawsuits. Just days before the Tates' apprehension, Tate Publishing had unexpectedly risen from the dead, claiming to be ready to "once again lead the publishing industry."

For a detailed account of Tate's deceptions, failures, sudden demise, and unexpected resurrection, see my previous blog post.

In a press conference on May 4, Attorney General Hunter promised that his office would seek reparations for Tate authors (though with the multi-million dollar judgments against Tate probably taking priority, I think it's unlikely that much, if anything, will turn out to be available). He also said that Tate Publishing's apparent re-boot, as well as the possibility that the Tates were working on starting up a new venture (possibly another publisher called Lux Creative, about which there have been rumors for some time) were factors in the timing of the arrests. Overall, it's clear that the AG is taking this very seriously.

Ryan Tate, buttonholed by reporters on his way to his arraignment, unsurprisingly declared his innocence.
“We’re looking for our day in court and fighting them and we’ll make sure the truth wins out,” he said.

When asked about the countless victims, he said, “That’s not true, we went out of business for about three months but we have about a thousand authors total so most of them are very, very happy."
Worth noting: in a January interview, Richard Tate was claiming 39,000 authors. I'm guessing that was a teeny bit inflated, but I'd also bet dollars to donuts that Ryan is lowballing. Even if he isn't...we know that 718 Tate authors have complained to the Attorney General since the beginning of this year. So if Tate does have only 1,000 authors, clearly most of them are nowhere close to happy.

The Tates are out on bail at present, and a preliminary hearing is set for September 6. They apparently now have an attorney (two previous attorneys quit for lack of payment).

What can Tate authors do now? You've already done a lot; your complaints to the Attorney General were instrumental in leading to Ryan's and Richard's arrests. The AG has heard from authors not just in the USA, but from all over the world.

But there's still more to be done. The AG is still looking for Tate victims. If you haven't yet filed a complaint, consider doing so now--more complainants will give the AG's office more to work with in building its case against the Tates, and you'll also get your name on the list for restitution, if there is any.

Here's the form to fill out to file your complaint with the AG's Consumer Protection Division. You can also visit the Attorney General's website at https://ok.gov/oag/.

And if you hear any news, please email me or post it here.

February 16, 2017

Red Flag Alert: Loiacono Literary Agency, Swetky Literary Agency, Warner Literary Group

Posted by Victoria Strauss for Writer Beware


In the late 1990s, when Writer Beware first started up, the digital revolution was just peeking over the horizon. Traditional publishing was still the only path to publication, and literary agents were the principal gatekeepers.

As a result, there existed a huge and lucrative subculture of dodgy literary agents, who fed on writers' hunger for publication and turned the (false) promise of access into money. Upfront fees, editing referral schemes, vanity publishing scams: the list was endless.

No more. With the enormous growth of small presses and the expanding number of self-publishing options, agents are no longer the be-all and end-all of a writing career, and fewer writers decide to seek them. Writers are also more savvy these days about proper business practice. This has been bad news for the predatory agent subculture, which has shrunk to a sickly shadow of its former self. Fee-charging agents, once the most common of all literary pitfalls, are now relatively rare.

That's not to say they don't still exist.

LOIACONO LITERARY AGENCY

There's an impressively large list of book placements on the website of Loiacono Literary Agency (motto: "Where 'can't' is not in our vocabulary!"). In this case, though, size isn't everything, because apart from a handful of sales to larger publishing houses, most of the books have been placed with small presses that don't require authors to be agented. For most of the publishers Loiacono has worked with, the authors likely could have placed the books on their own and saved themselves a commission.

This isn't why you hire an agent. Another thing you don't hire an agent for: hooking you up with vanity publishers. A very large number of books on Loiacono's list have been placed with Argus Publishing. Argus, which has also done business as A Better Be Write, A Book 4 You, and A-Argus Book Better Book Publishers, has offered "investment" contracts requiring up to four-figure fees (Writer Beware has received a number of documented complaints). Its owner is a former tax preparer who in 2005 was permanently enjoined from tax preparing by the US Department of Justice, which found that he had filed fraudulent returns.

Despite all of the above, I probably would not have bothered to post a warning about Loiacono, had it not been for a recent change in its author-agent agreement. From the email Loiacono sent to authors at the end of December:
In the current contract, the only charges are for any expenses that may incur (postage, foreign exchange, etc.), $250.00 per year, which has not been used for any author so far, and a $500.00 cancellation fee should the author wish to terminate contract before it expires or the publisher cancels, which breaches the LLA contract.

In the new contract, for any new Work(s) there will be an administrative fee of five hundred dollars ($500.00), made payable to the Agency upon signing. This is a one-time fee, unless the Work(s) do not contract with a publisher and require renewing after one year. Renewals are two hundred fifty dollars ($250.00) per year. Upon publication of the Work(s), only the LLA 15% shall apply.
Charging administrative fees is old-school predatory agenting. But the "cancellation fee" is a new wrinkle. I've gotten a lot of complaints about publishers that force authors to pay to terminate their contracts early (this is a potentially abusive practice)--but this is the first time I've encountered an agency that penalizes its clients for such termination--and does so even where the termination is not the author's fault. Wow.

Upfront fees, contract termination penalties, multiple placements with a vanity publisher: the Loiacono Agency is a trifecta of "writer bewares".

(Literary agent Janet Reid has also weighed in on Loiacono Literary.)

SWETKY LITERARY AGENCY

The 25 or so book placements claimed by The Swetky Literary Agency (don't you love that dawn-of-the-web vibe) is much, much smaller than the list claimed by Loiacono.

In other ways, though, it's similar. There's a handful of placements with reputable independent and specialty presses; the rest are "sales" to vanity publishers (Koehler Books) and small presses that authors can work with on their own. Also, even if every one of Swetky's book placements were impeccably reputable, 25 sales over the nearly 15 years the agency has been in business is a pretty sad track record (this blog post from a publisher to whom Swetky offered a completely inappropriate book offers some possible insight as to why).

The agency's apparent lack of commercial success is certainly reason for caution. But it's not why I'm posting a warning.

I've heard from multiple writers to whom Faye Swetky offered representation or the possibility of representation, and then told them that their manuscripts needed editing. Fortunately, she knew a terrific editor who might be willing to work with them: David J. Herda, a much-published author of nonfiction.

It's no secret that Swetky is Herda's agent; that info is right there on the agency's website. What is a secret--at least from the writers who contacted me with their stories--is that Swetky and Herda are either married or romantic partners. Among other things, they share an address (the image below is public record; note that it matches the address on the Swetky Agency logo, above):


This connection was not acknowledged to any of the writers who contacted me. To make matters worse, Herda charges enormous fees (I've gotten reports of low five-figures) and some of the writers I've heard from have not been satisfied with his services.

This is a textbook editing referral scheme--common in the old days, but something you almost never see anymore.

WARNER LITERARY GROUP

Sarah Warner, principal of the Warner Literary Group, has an impressive background as an acquisitions editor. It would seem to be the perfect set of qualifications for a successful literary agent.

And yet, Warner's track record is tiny. Since the agency's founding in 2011, she appears to have made just 12 deals. Seven of these are with solid publishers--but the rest are books by agency clients that have been placed with the agency's own publishing division, Hedgehog & Fox. In fact, with the exception of one book authored by Ms. Warner herself, the whole of Hedgehog & Fox's miniscule list appears to be made up of agency clients.

Something else agency clients have in common: lawsuits. Warner Literary Group has been sued by three of its authors--a huge percentage for such a small agency.

In 2012, Derek B. Miller sued for, essentially, what he described as substandard representation (his very detailed complaint can be seen here); he later won a motion for declaratory judgment terminating Warner as his agent (she had refused to allow him to cancel the agreement). Firoozeh Dumas sued in 2016 for similar allegations (her complaint can be seen here); ultimately the arbitration clause in Warner's agency agreement prevailed, and the parties were directed to arbitration. A third lawsuit filed last October is from client Karla M. Jay, whose books Warner published with Hedgehog & Fox. Jay alleges that Warner withheld royalties "in order to pay other expenses of WLG", and, as with Miller, refused to allow her to terminate the agency agreement.

That agreement, by the way, has a problem. Here's the first sentence of the agency clause that's supposed to be inserted into any book contracts the agency negotiates (my bolding):
The Author irrevocably appoints Warner Literary Group, LLC, as the Author’s sole and exclusive agent (the “Agent”) with respect to the Work for the life of the copyright (and all renewals and extensions thereof)
This is known as an "interminable agency clause," and it entitles the agent to represent a book not just for as long as a contract is in force but for the whole duration of the book's copyright (in the USA and most of Europe, the author's lifetime plus 70 years). Major authors' groups warn about such clauses; I've written about that here. This is red-flag language; you do not want to find it in an author-agent agreement.

January 18, 2017

The Continuing Decline of "Assisted-Self-Publishing" Giant Author Solutions

Posted by Victoria Strauss for Writer Beware

A little less than two years ago, I wrote a blog post that focused, in part, on Author Solutions' declining share of the so-called assisted self-publishing market.

According to a report by Bowker on ISBN output in the self-publishing market between 2008 and 2013, the number of ISBNs issued by AS dropped 15% between 2011 and 2013, from an all-time high 52,648, to 44,574.

(ISBN output is not a meaningful method for assessing the self-publishing market as a whole, because so many self-publishers don't bother with ISBNs. But it is an effective way of tracking Author Solutions' activity, because all AS publishing packages, even the ebook-only ones, include ISBN assignment.)

At the time, I speculated:

We'll have to wait for 2014 stats to know whether this trend will continue, but my guess is that it will. In part, ASI is reaping the fruits of its poor reputation and the large amount of negative publicity and commentary it has received in the past few years (see, for instance, David Gaughran's The Case Against Author Solutions). Beyond that, though, I think that its business model--print-centric, high-priced, with outsourced operations (much of ASI is based in the Philippines) and an extreme emphasis on upselling--is simply becoming less and less relevant in this age of free-to-cheap digital self-publishing solutions.

Well, Bowker recently issued another report, Self-Publishing in the United States, 2010-2015*--and boy, was I right. Here's a screenshot of part of the special section devoted to Author Solutions (Archway Publishing, which AS runs for Simon & Schuster, is missing from the list, but is included in the bigger listing of self-pub platforms):


Total Author Solutions ISBN output for 2015, including 657 Archway ISBNs not shown in this section: 24,587.

2015 output did grow slightly at WestBow, by 275, and at Archway, by 37. And Wordclay, defunct for years, inexplicably popped up again in 2015 with 14. But for all other AS brands, including its very first "imprint," AuthorHouse, issued ISBNs fell by hundreds or thousands. Overall, AS's 2015 ISBN output was less than half its 2011 high point, and represents a 45% drop over 2013.

Even allowing for some inconsistencies in the data, that is a really precipitous decline. Pearson, which bought AS in 2012 for the surprisingly low price of  $116 million (surprising because then, as now, AS was the largest of the assisted self-pub providers, and by all appearances was still growing), unloaded it in December 2015 to a private equity firm. Looks like that was a good decision.

Meanwhile, DIY platform Createspace--where authors don't have to use ISBNs or can provide their own--continues to be king, with 423,728 ISBNs issued in 2015, an increase of 131,545 over the previous year.

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* Thanks to Jane Friedman for alerting me to this report, via her excellent article Looking Back at 2016: Important Publishing Developments Authors Should Know.
 
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