DEAR FRIEND: The Rascals, Rogues And Roues Who Made American Junk Mail, Chapter 33: Junk Mail Babylon

By Ray Schultz

Despite the sleaze that surrounded it , junk mail started to attract notice on Madison Avenue. By client demand, the J. Walter Thompson ad agency hired its first full-time direct mail copywriter: Ed McLean, a literary type from Chicago who had knocked around in New Orleans and thought he was applying for an editorial job when Red Dembner hired him as a direct mail writer at Newsweek. He was treated with the utmost disrespect at JWT.

“Direct mail was shit in the ad world,” McLean said later. “It was not commissionable. When creating TV or radio spots, you could make money even for production costs. But in mail, the costs were very low, so you couldn’t make any money on that.”

At JWT, the main direct mail copywriter was “an old hack living in Montclair,” McLean recalled. “She would put out old copy when she came with an assignment. They’d scratch out the old date and recycle it.”

Worse yet, the designers “didn’t like to design for mail,” he continued. “A designer would hold it up like this”—McLean then held his nose—“and let it drop to the floor.”

Finally, he had to go to the “animal trainer in charge of the copywriters” to get a seating assignment every day. “I wandered around for six months,” he said. “I never had an office. I had a manual typewriter on a dolly.”

McLean went on to write thousands of letters as a freelancer, like the award-winning one he crafted on diesel cars for Mercedes-Benz (‘Forget it, Heinz,’ the experts told me. ‘It just won’t sell here.’

**

Among the “legitimate” users of  this sanitized medium were a plethora of credit cards companies. This started in 1950 when the new Diners’ Club card was mailed unsolicited to several thousand businessman. The card was cardboard, and had the names of its few participating restaurants on the back, wrote Matty Simmons, the press agent for Diners ‘Club, and later publisher of the National Lampoon.

In one typical promotion, mailed to everyone, Diners‘ Club  wrote, This invitation is extended to (Blank for name)

by Mr. Allred Bloomingdale, President THE DINERS’ CLUB INC.

This meant it would extend credit to anyone who happened to open the envelope. 

The letter went to say, Your credit standing and financial rating have placed you on the select list of individuals to whom we are limiting the mailing of this invitation for Diners’ Club membership. 

But then it added, The enclosed application is transferable to members of your immediate family or associates sharing your business responsibilities, if you now have a Diners’ Club Credit Card.

Within a few years, American Express entered the credit card field, with Lester Wunderman’s help, after a failed attempt to buy Diners’ Club. Oh, it was a nasty business: Diners’ Club retaliated in kind when its take-one displays in stores were mysteriously replaced with American Express take-ones, Simmons wrote. These cards were followed by Visa and MasterCard. Banks saturated the market, mailing 100 million cards to anyone whose name they could get their hands on, including dogs and dead people, some joked. 

“In your mail box or even under your door, often unwanted and unwelcomed, they keep coming—a maze of bright new, plastic credit cards to be heaped on top of all the others you already have,” the New York Times wrote on July 8, 1969. 

This practice ended in 1970 when Congress prohibited the mailing of unsolicited credit cards. Banks and other credit issuers tightened up their credit-checking, and a global business was built.

But another group of junk mailers rejected the conventional marketing wisdom that the best customers for any offer were people with money and credit. They chose to target the financially strapped and bankrupt—the credit poor. 

There were several variations on the basic scheme to bilk the poor of the little money they had.. One was the secured credit card offer, as perpetrated by firms like Metro West Financial Group. This company notified hundreds of thousands of people by postcard that they were preapproved for credit, including “bank loans, department store credit cards, and a MasterCard or Visa bank credit card.”

That would be quite an attractive offer if true, but people who responded received none of that. What they got, after shelling out $48 for a 900 number telephone call and another $50 later, was a list of banks offering secured credit cards—a list that could have been obtained for $1.50. And it omitted the fact that a person needs to post a deposit for a secured credit card—whatever its value is. 

But the promotion was successful by any standard. Roughly 15,000 suckers coughed up $1.4 million over four months, half of it via a 900 telephone number. 

Then there was the gold card offer from Federal Bankcard of Santa Barbara, California. “Final attempt,” its postcards state. “We are trying to reach you. Your $5,000 credit limit has been approved. Call NOW.”

With this offer, it was possible for people, those who could ill afford it, to spend over $100 on various 900 number calls and other charges before finding out that the “gold card” entitled them only to shopping privileges in a catalog with limited merchandise. One childlike victim ended up with a $900 phone bill. The potential profit could be seen  by the fact that this offer went to 15 million people. 

The basic scams were bad enough. Even worse was the inclusion of potential victims’ names on mailing lists known in the business as “Credit Derog” lists. One was the Credit Alert Database—10 million to 15 million people “more than 60 days past due on one or more credit cards,” a promotion said. Another was the Credit Reject Database—consumers who had been refused credit. 

It was never determined whether credit bureaus and banks themselves had released Credit Derog lists, or if they had slipped out the back doors of a computer service bureaus.  Either way, there was no dearth of new exciting offerings, like the Transactional Financial Services Derogatory Credit list of 11 million people with one or more derogatory credit lines.” Then there was the ultimate resource: the Unskilled Urban Fringe—people with “low or no income, only occasional low-wage employment, little education, many with no mobility; old housing, multiple families living together.”

In 1967, Lester Wunderman conferred a certain legitimacy on junk mail by lumping it together with other media under the name direct marketing. And, as much as anywone, he turned a business backwater into a global phenomenon.

But some people already knew there was more to the business than direct mail–like the trio of Monroe Caine, David L. Ratke and Herman Liebenso. They used print ads to offer a chemically impregnated car-cleaning mitt called the ROLL-A-SHNE, claiming it was developed by the General Electric Company, tested by the U.S. Army and Navy and endorsed by Reader’s Digest.

It was a pack of lies. The Federal Trade Commission forced all three men to sign a consent order agreeing to cease advertising falsely “the quality, composition, characteristics, performance, endorsement, and guarantee” of the mitt.

The copywriting genius Caine wasn’t through: A decade later, he was convicted of 72 counts of mail and wire fraud for his role in peddling the “Sperry Unitron,” a device that supposedly increased gasoline mileage. Caine wrote that the Unitron was a new invention by one of America’s leading scientists (co-developer of synthetic tires and power brakes).

Also not true: The unknown inventor worked out of his garage, an appellate court noted when refusing to overturn their convictions.

Worse, there was “no mention that the Unitron was actually a can of engine detergent which needed to be replaced with every tankful of gas rather than a solid device which would not need replenishment,” the court went on. Not that it mattered: “Customers failed to receive their Unitron, even after their checks were deposited in Sperry’s account,” the court concluded.

Caine and his colleagues drew four years in the slammer for that scheme to defraud. They appealed to the U.S. Supreme Court, not even bothering to deny that their advertising was false—what they objected to was the fact that one alleged fraudulent claim, that refunds would be issued to buyers who weren’t satisfied, was not specified in the grand jury indictment along with 12 other charges. Caine and company lost in the appellate court, then appealed to the U.S. Supreme Court. “The Court of Appeals would have us accept, as a finding of fact, that the Grand Jury made twelve specific charges as set forth in paragraph 4 of the indictment, and did not include a charge with respect to refunds because they considered that it would be redundant, to include it ‘among others.’”

Later, Caine worked with a career con man named Norman Chanes, whose mail order firms Encore House was raided by postal inspectors after several thousand consumers complained about binoculars and other products sold by the company. Chanes and Caine signed a consent decree with the FTC, agreeing to pay $250,000 in consumer redress and $100,000 in civil penalties. As legend had it, Caine had to agree not to write direct marketing copy for five years as part of one of his plea deals.

But there were worse offenders than Monroe Caine out there. 

In 1983, an entity called Farragut Research offered an extensive collection of pornography to anyone who signed up for a “scientific research survey”—for a fee, of course. You have been chosen for this survey because you are known to be of better-than-average intelligence and to have exceptional sexual prowess, the direct mail letter said.

But it warned: You must make every effort to keep these products out of the hands of children, even though children play a large role in the actual films and tapes.

When queried by a reporter, a postal inspector said, “I think we’ve gotten some complaints on that”—not for the child pornography, but over non-delivery of the products. It dawned on the reporter that this was a sting designed to entrap people into purchasing kiddie porn.

The reporter went for a get-aquatinted visit with postal inspector Sherry Treuax, who had a gun in a shoulder holster on her desk, at the Post Office building on Ninth Ave. in New York. Another inspector, Bob Mignonya, came in and expressed satisfaction about a criminal case they had just closed.

“As of now, they’re convicted felons,” he said of the perpetrators.

“Do you know about Ira Smolev?” Inspector Treux asked. 

She produced some clippings from the Newark Star Ledger about Ira Smolev, purveyor of the Panama Ceiling Fan, which “barely stirred the sir,” and the Tilt-Top Table and Bavarian Beer Stein, which were also not as advertised. In addition to bringing in cash orders, these offerings generated sucker lists that could be rented out. But these were the least of his offenses.

Smolev’s Perth Amboy, New Jersey warehouse had burned down in mysterious circumstances. And now he was being probed because cosmetics donated by Revlon to the Association for the Help of Retarded Children had ended up in his warehouse, and he was marketing them by mail.

In 1984, Smolev copped a plea to one count each of mail fraud, conspiracy and interstate transportation of property taken by fraud. And, in a separate case, the he pleaded guilty to one count of conspiracy to commit mail fraud, resulting from his promotions for Tilt Top Table and other inadequate products. Smolev, who was injured in a car crash around this time, never served a day in jail.

Of course, Smolev and Caine had serious rivals in trying to shake a few bucks loose from the unsuspecting—including some from far away. 

In 1990, fortunate individuals received a letter from Chief Tunde Dosumbu of Lagos, Nigeria, wrote asking for permission to “remit $24.5 million U.S. dollars into your company’ or private accounts.” 

The authors claimed to be involve with Nigerian National Petroleum Corp. “By virtue of our positions and in collaborations with our able computer analyst, we were able to process thee second-phase payment of $15.1 million,” they stated. 

The rub was that “we can not risk having such huge amount of money in our local accounts considering our salary base.”

To prove the legality of the transfer,” they asked for “four copies of the person’s letterhead, along with bank account numbers, invoice copies, and telephone and fax numbers. 

The letter concluded, “For the fact that we are working with our corporation an also to avoid scandal, we advise all issues regarding the transaction be kept in absolute secretary. Otherwise, we stand the chance of loosing our jobs, pensions and gratuities after years of meritous service to the government.” 

Another letter claiming to be from the same  company offered $6 million for allowing the sender to temporarily deposit $20 million in the recipient’s bank account. All they needed was the bank account number and some letterhead.

The “Nigerian Prince” scam was lampooned on late-night TV and became part of American folklore.  Thus, the junk mail business thus attained a new notoriety.

But the old-timers weren’t there to enjoy it–they had been shuffled off the stage and replaced by younger talent. Max Sackheim retired at age 70 the same year Homer Buckley died. Sackheim’s son Sherman bought the Sackheim agency with three other people, but left after a few years, wishing that his father had sold his share of the Book of the Month Club for what it was worth.

“Would I be sitting in my little ticky tacky house in Clearwater, Florida, waiting for my little Social Security check?” he asked in 1995. “It would be worth $100 million now between me and my brother, but I can’t eat more than three meals a day.”

John Stevenson retired, too, but It was easier for him because his wife was wealthy “You’ll have a nice life, but you’ll never make much money,” he said over coffee in their vast apartment on Fifth Ave. in 1997. “It’s a small business.”

Stevenson then revealed the enduring formula for junk mail copy from the days of J.M. Pattee to Ira Smolev: “It’s like the old story about the clergyman who had so many converts. He was asked his secret. He said, ‘I tell them what I’m gonna tell them, then I tell them, then I tell them what I told them.’”

The Manhattan Shuffle

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