Home » Big Publishing, Royalties » A noticed new scam

A noticed new scam

30 September 2015

From Dean Wesley Smith:

But one thing, traditionally published writers need to pay attention to. It is something I noticed on a recent royalty report. There is an interesting new scam publishers are pulling.

On a previous royalty report, the total numbers of books sold were there, including a few thousand copies held as a reserve against returns. (Book had been in print for a decade, but returns were still being held. And the return amount had remained consistent for years.)

On the next royalty statement for the same book, the ISBN had changed, all previous sales had vanished, and all reserves held had vanished as well. A book that had sold over two hundred thousand copies in its life now showed only a few thousand sold.

A couple thousand books held out of my royalty report had just gone “poof.” If I didn’t watch royalty reports, I would have never noticed.

I just laughed and shook my head. I didn’t care since the book I noticed it on was a long distance from earning out because my advance had been so high, but it dawned on me that with all the redoing covers, electronic book editions and such, and all changing ISBNs, the sudden vanishment of reserves against returns that were being held against a certain ISBN would be a very nice way to make money for a traditional publisher.

And 99.9% of all writers and their idiot agents would never notice.

The scams to screw writers that traditional publishers keep coming up with amaze me.

Link to the rest at Dean Wesley Smith

PG says most traditionally-published authors never imagine that their publishers may be playing games with their royalties.

Big Publishing, Royalties

42 Comments to “A noticed new scam”

  1. “PG says most traditionally-published authors never imagine that their publishers may be paying games with their royalties.”

    Was the paying rather than playing a pun? 😉

    Would love to see a court order one of the pig5 to open ‘all’ their books for discovery — just to see all the other ways they love to shaft the writers.

  2. I really wish I could say I was surprised by Dean’s experience. *facepalm*

  3. I don’t remember if I’ve seen reserves listed on my royalty statements, but I did just check the ISBNs on the three versions of one book: two versions of the book (one of which has two ISBNs, whatever that means) have differing ISBNs and and the other version doesn’t have an ISBN. It has an ASIN.

  4. I don’t understand. The publisher changes the ISBN of the book, and then sends a royalty report only for the new ISBN, ignoring sales from the previous ISBN?

    • I’m trying to understand, too. Are the royalties tied to an ISBN? Do authors need contracts that specifically state they’ll be paid for all eventual ISBNs used by the publisher?

      • Presumably the returns are tied to an ISBN?

        1. Publisher sells 10,000 copies of ISBN1, keeps $1,000 for returns.
        2. Publisher releases ISBN2, sells 1,000 copies, keeps $100 for returns.
        3. ISBN1 disappears from your royalties report, and the $1,000 disappears with it.

      • Sounds like the returns is a liability account. To erase them, they would have to offset it against another account, and a payment would have to be made to the author.

        But one can leave the accounts as they are for ISBN-1, and just stop reporting it. ISBN-2 then shows a very low returns liability.

        • Exactly what seems to have happened, Edward. And Terrence, spot on about the liability account. But those returns are often already sold books, so the fact that correct accounting most likely is happening behind the scenes, but just not shown on the author reports.

          Or put against the author advances. That is a different accounting ledger and would not be on the main ledger at all. Authors would have to notice, ask, and then push hard to get it brought to the right ledge and the book sales credited.

          And I have one old publisher who group accounts all ISBNs on a book. But most do not. And I have one book still reporting over twenty different ISBNs, which means in their accounting over the years, they had reason to do twenty different versions. New covers trigger new ISBNs, new forms, electronic, and so on.

          No clue how many reserves were held and dropped without author accounting on those. I would have to go back and compare from report to report and honestly, I have books to write.

          Just wanted to report this fun new little wrinkle for all you remaining traditionally published authors to watch out for.

          • That’s why Lee Child has two auditors working for him, checking his publishers’ numbers. And I’m sure those publishers keep the books squeaky OCD clean, where Lee is concerned.

            Side note to 99.999% of traditionally-published authors:

            You aren’t Lee Child. 🙂

    • That’s what its sounding like to me, too. It’s sounding as if:

      A) Author writes a romantic suspense book. It’s goes to print in January and the royalties list Book X as romantic suspense.

      B) Publisher decides in August to switch the genre for Book X, now calling it a “mystery.” However, copies of Book X printed from January to July are still out in the wild selling as romantic suspense, and are generating royalties, but …

      C) Publisher issues royalty reports for Book X that only start from August, and never reports the ongoing sales of Book X that were printed from January to July in the romantic suspense category.

      Substitute “romantic suspense / mystery” for “ISBNs” and I think that’s what publishers are up to. Which seems like a really good reason to call a lawyer or auditor. Hopefully Dean drops by to clarify.

      • Safe bet that lengthy meetings were held by BPH lawyers and accountants on how they can pull this switcheroo and keep themselves covered through the myriad of interconnected clauses in their 50 page, legal length, Bible print contracts. They change ISBN’s and VOILA…it’s a “re-print” of some kind and different reporting and accounting terms now apply.

        A shell game within a shell game. In all, reason #114 to skip Trad-Pub and just go indie.

  5. Redoing covers is another way to ding the reader as well allowing the same book to be accidentally purchased twice. At least Amazon lets you know when you’ve already purchased it.

    • Not only that, but it’s also a good way to screw over the reader by upping the cover price. What used to be 9.99 is now 12.99.

    • “when you’ve already purchased it”

      Only (I believe) if the isbn/asin is still the same if those numbers are changed it won’t show. Quite a few times my favorite book blog will post a book I want but think it sounds familiar. The order page shows no already purchased boy but I search my content and it’s there. Many of them, but certainly not all have been freebies and maybe some promotional sales with bonus content like some of Kim Harrisons. They altered the book giving it Bonus content of some kind and offered it with a different asin number. A Jussi Adler-Olsen book (maybe it had other changes but nothing like bonus content) I had purchased on a Daily Deal or monthly Kindle sale turned up a year or 2 later in another sale or deal and showed no sign I had purchased it. I don’t even know why I checked it because it had gotten lost in my TBRs and it didn’t sound familiar but there it was. I love Amazon but I don’t trust the product pages like I used to!

      • You are right. I was reviewing some books on reader’s and checked an author I read and was surprised some were showing as not purchased. I checked my library and they were there so I will need to be more careful in the future.

    • I just lost a probably too long reply to Sharon but if you have a large library or bad memory don’t trust the product pages completely. If they make changes that need a new asin number or decide to yank it and resubmit with a new one your already purchased note won’t show up on the new product page. Generally you will have to search your content.

  6. What’s an ISBN?

  7. I’m watching Penguin NZ do this sleight of hand to the last print run of my novels. They are withholding $$$ against returns. They have failed to account for what happened to all of the 9000 books they allegedly printed. I’ve been paid for a fraction of them and I’m sure none remain in stores now. I’ve called them and asked for a proper accounting of what happened to each book. They won’t do it.
    BPH Fraud technique #27 admit you sold some, disappear many, withhold earned royalties forever against novels you pulped years ago. Deny you did anything wrong. If this was automobiles instead of books a lot of people would be going to prison.

  8. Sadly, the same sloppy business practices that apply to copy editing, typesetting, digital conversion, etc., also carry over into the accounting department.

    A conversation I had this week with my previous BPH:
    “My royalty statements are missing title X.”
    “Are you sure? Maybe they included it with title Y.”
    “Nope. It’s not there.”
    “Hm… We’ll have to look into that.”

    I’m still waiting to hear back. This is for an accounting period that ended three months ago. Meanwhile, Amazon can tell me total sales and pages read for my self published titles within the last 24 hours.

    P.S. There were other obvious issues with the most recent royalty statements, but this is the easiest one to summarize. I don’t think it’s due to a nefarious plot, just a lack of anyone caring about what they’re doing.

    • I can’t remember it exactly, but I believe it goes like this:

      “Never ascribe actual malice to that which can be explained by mere incompetence.”

      But it’s funny how the errors always go in their favor.

    • Me: “I see Amazon is selling the ebook version of that book,apparently for more than a year now. With a decent sales rank too.”

      *Big* European publisher: “Yes… And?”

      Me: “Why is there no ebook edition listed on my royalty statement?”

      Them:… (crickets in the background)

      In truth, I can completely understand how this sort of thing could happen in a big organization. But it just reinforced the need for authors to pay careful attention to this stuff.

      It reminds me of the best advertisement that I’ve ever seen. (for a dentist) “Ignore your teeth, they’ll go away.” Substitute “money” and it’s probably just as true.

    • I can see this kind of thing happening in our firm quite easily, for the sole reason that with all the layoffs people are overworked and just too tired to deal with anything that isn’t urgent.

  9. Considering how ISBNs are used by some to evaluate sales figures & the health of the book market, another factor here could be ability to artificially inflate reports of the quantity of books published & sold.

    It’s really a win-win-win for publishers, as long as they assume nobody’s going to take them to court over it. Which would be easy to assume, if they only do it to folks who sell < X.

  10. Since Dean noticed the, uh, “discrepancy” due to a new ISBN, I have to wonder what might happen if:

    1) The original — or new — ISBN was simply left of the author’s royalty report.

    and since ISBN’s are public record, I believe, what’s to stop an author from researching ISBN’s and finding out some “inconvenient facts?”

    or…

    Trad Pub doesn’t bother to obtain an ISBN at all (like a lot of indies don’t bother).

    In short, how could a publisher work out more new ways to scam and cheat authors? All this is yet another caveat and caution about signing with Trad Pub.

    And if you have signed contracts that are still in force and receiving royalties from, it may behoove you to examine royalty reports with a very fine eye for any and all details (even the missing ones!).

    • Here’s another thought. A well-fed person won’t bother to pick up crumbs that drop or finish all the food on the table.

      A starving person will hoover up any crumbs and lick the plates and bowls clean.

      The fact that a Trad Pub is grabbing for pennies with “disappearing” reserves held back and offering new lows (monentary and otherwise) in “standard contracts” leads me to think the Big 5 are in more trouble than they’re letting on. We shall see!

      • They have been in trouble since before Kindle launched.
        Their collective gross sales and profit have been flat since 2007 desoite mergers, layoffs, price hikes, and moving a third of their business to high margin ebooks. Now they are trying to undo the latter so they need an offset…

    • Trad Pub doesn’t bother to obtain an ISBN at all (like a lot of indies don’t bother).

      This part doesn’t seem likely. I think the BPHs buy them by the thousands. More to the point, the ISBN is a barrier to entry for most indies, and it seems a lot of systems are set up around having one. Getting print books into brick and mortars and libraries seems to hinge on having an ISBN.

      I doubt they’d give up such an easy advantage over indies. The rest, though? Frighteningly plausible.

  11. I have a couple of books with small publishers. I hope they don’t start copying the scams of the Big5.

  12. You know, it’s really horrible that a reputable business routinely cheats people out of money.

    It’s awful. This type of thing should be reported.

    I appreciate that Dean brought this to people’s attention!

  13. Yeah, it’s horrible, but I doubt BPHs do this sort of thing without a solid legal okay behind them in case of the rare author who would try to sue. Which isn’t likely to happen, because most authors with trad pub can’t afford lawsuits.

    People keep signing the contracts, and the contracts keep getting worse, as do the advances. I’m so glad I found self-publishing when I did, because it saved me from this sort of hell.

  14. Let’s say there are 1,000,000 traditionally published authors (as an example for illustrative purposes).

    The 237 (maybe a few thousand – 20,000 at most) who actually call the traditional publisher AND actually go through the probably lengthy process to get paid any “questionably mis-placed” (technically legal) royalties … are an acceptable business risk/loss for the publisher.

    The publishers are banking on the fact that authors won’t offer up a challenge, collectively. Sure, technical contract clauses might protect them, so it might be “legal.”

    But that (legal) doesn’t make it right. So long as a large group of authors (or other authority) doesn’t rise up and demand the practice be changed, it won’t change (remember the DOJ pricing thing with Apple, et al?).

    The publisher keeps profiting.

  15. It’s things like this the AG should be sinking its fangs into and stop trying to fight Bezos the Vampire Slayer.

  16. Although I’m not currently pursuing any traditional contracts, I greatly appreciate that DWS took the time to write about this, because things might change in the future and I could end up with a new publishing contract with BigPub or Amazon or a small press or…

    (Filing info for possible future reference… now, where should I put it? Hmmm, under Publishing Scams? No PRH’s Author Solutions has stuffed that file to overflowing. Under Contract Scams? No, that one is also overflowing. Here it is, the Accounting Scams folder)

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