Friday, September 13, 2013

When Authors Steal From Authors by Erica Pike

  
*This is a repost. To read the original article and comments on it please visit Erica's website.

It's horrible, isn't it? In an ideal world, theft of manuscripts and ideas wouldn't happen, but this isn't an ideal world. However, I'm not here to talk about intellectual rights and ideas; I'm talking about theft of actual money.

In the following text, I’m going through my story and pointing out clues of things not being as they should be, so that you can learn from my current situation. I will point out the clues where I should have either confronted the author in question (who was also my publisher), or filed a breach of contract to get my rights back. I'm marking my story in purple so you can skip over it if you're not interested. 
So, let’s start.

With the ease of indie publishing many new publishing houses have popped up. A lot of them are founded and managed by authors, some just to publish their own titles and some to publish other writers as well. There's a big difference between the two as the latter means there are a lot of people relying on you to keep the business going.

Starting a publishing house and taking in other authors sounds simple, doesn't it? Just hire a group of editors and proof readers, hire/outsource to a cover artist, hire/outsource to a professional formatter, sign up with retailers, learn all about media and how to reach audiences, learn to calculate royalty and make statements, answer queries and the ton of email sent your way every day, buy/make a professional website - possibly with a storefront, and keep your financial books and records in order. I don’t know about you, but to me this doesn't sound like a job for one person unless this person is doing nothing else with their time and doesn't mind long hours into the night and no weekends. Fact of the matter is that not everyone realizes just how much time and money goes into running a multi-author publishing house.

I'm not here to tell authors not to start up publishing houses. There’s a plethora of authors who can successfully run an online business and keep up with their writing. It takes time, money, skill, determination, organization and delegation to make it work. But when an author (or any person) decides to start up a new house thinking it'll be an easy way to make some cash, that's when they need to stop and reconsider. If you start up a multi-author publishing house you need to treat it like a real business and not just something you have on the side with your writing. If you go into this with the mindset that this will be a little pet project that seems easy to run or a great way to get your name out there in order to increase your fame, think again!

Now, I'm not saying that easy cash for easy work or any of the above is what author Kharisma Rhayne (Denise Blackwood) was thinking when she co-founded No Boundaries Press - I actually think she had every intention of running an actual business - but I wonder just how easy she thought it would be along with her goal of being a successful author. Granted, she co-founded the company, but a few months after No Boundaries Press put up their first title for sale (my title, Hot Hands), her co-founder had to quit and Kharisma was left with a huge responsibility and a humongous amount of work. At the time, I had full faith in her. She came across as a driven individual with innovative ideas, but it takes more than drive and creativity to work a business, especially when you decide to do it alone.

If you decide to go it alone, you must be prepared for the influx of queries and requests from authors, reviewers, readers, retailers, editors, cover artists, formatters, marketing venues, and many, many others - every day - on top of everything else that needs your attention and steals away writing time. If you decide to be the only central person within your company, for example you decide everything must come through you (like edits between authors and editors so that the editor and author never actually communicate without you in the middle) the workload becomes massive. You also need to stay on top of things in the publishing industry and make sure your company is getting the coverage it needs to be successful. This is especially hard when you're brand new on the market. 

Working with No Boundaries Press was a pleasure to begin with. I loved the hands-on approach in the publication of my shorter works and I gained valuable knowledge by working with them. The author forum was active and we'd repeatedly get fresh ideas, announcements and marketing opportunities from Kharisma. I was over the moon when I received my first quarter pay check with only two releases out. The third story was also published by then and I was on a roll. However, after Kharisma became the sole owner of the company, things started to slow down. For me, it was good because my titles were coming out too fast, but then as time went on things seemed to have stopped. My next title was supposed to come out in June, then July, and then I simply didn't know anymore (first clue). Being a non-confrontational person, I didn't push. I knew she was busy and that there were some problems behind the scenes that she was trying to sort. 

The very first point of irritation was in July 2012, when one of my books was supposed to be free for a day. I had announced it everywhere, but when the day came it passed without the discount (clue). That was a huge embarrassment for me. See, Kharisma had taken some weeks off and she was not to be disturbed. I assumed the book would be made free by some automatic mechanism, since this had been planned months in advance, but that wasn't the case. The storefront was always closed whenever she took vacation. As much as I feel that taking vacations is important, it's not good for business if it puts a stop to the whole operation. That happens if you're the only person handling things. Supposedly, Kharisma hired an assistant called Heather, but even though there was a "Heather" the business stayed closed (emails and all) whenever Kharisma wasn't around (clue). This put a little "huh?" in my head and vague warning bells, but I put it behind me and moved on. 

August came and I got my second pay check. The amount was only half of what I'd received before, but I was a new author with a new company so I didn't question it. However, Kharisma didn't send me a statement so it felt a bit weird. No statements, people, is a huge clue that something isn't right. Belated statements by a week or so is fine, but none at all is not. It added to the doubt in my mind, but I was preparing for a convention and didn't dwell on it, trusting her to have done the calculations correctly and that she'd send the statement later.

When the time came to get my third payment, I simply didn't get any (clue!). I knew the books were selling, they were being added to- and rated on Goodreads all the time. Other authors must have been inquiring about lack of payments because a message was posted in the author forum stating that if you didn't receive a payment, you didn't meet the minimum $20 (which I was hearing about for the first time). The message also said that statements wouldn't be sent out if there was nothing to pay out. This sounded off and I decided it was time to grow a set of balls and inquire about my money. However, whenever I did (and I did it a lot, albeit, always politely), the only response I got was that I should have been paid, it was odd because “Heather” had sent out all the payments, or that Kharisma would look into it and notify her accountant (clue: vague or dismissive answers). Like most of the authors, I've since learned, I thought this was just an isolated case and didn't contact the other authors to see if they'd been paid. I just assumed they had been. I trusted her to handle it since I was very busy with my fourth title finally released on November 30th. 
On November 31st, a reader pointed out to me that the Kindle format was faulty to the point where it was illegible. I emailed Kharisma about this and she said she'd look into it, but it was never fixed and stayed up for sale for six months in that faulty format (clue). She repeatedly said that Amazon was their biggest seller, so something must definitely be wrong.

Finally, we received an announcement on the author forum (announcements and updates had become scarce by this time (clue)). The third quarter payments would go out no later than December 21st. Finally, I would see my money. What was more was that NBP was officially an LLC now, so it had to mean Kharisma meant business. I submitted what was supposed to be the last story in the series. I'd been holding it back to see if things would get better and suddenly things were looking better. The story was accepted, but I never received the contract (I later found out that Kharisma was revising the contracts - more on that later). 

December 21st came and went and there was no payment. I received dismissive answers when I asked about it. I was also unhappy with the fact that the Kindle formatting hadn't been fixed despite my (polite) complaints. I was beginning to lose faith in the publishing house altogether at this point. I was sad about it, because once all of my stories were published they were supposed to come out in an anthology in print (I didn't know how easy CreateSpace was back then and thought print was a huge deal). 

So, 2013. A new year. The fourth book, Little Stalker, had been released in November and I expected a fixed version and both 3rd and 4th quarter payments to come in one nice sum...but I received nothing. Kharisma was getting harder to reach (clue) and the authors were getting antsy. I didn't push for the contract for the fifth book because I wasn't sure if I was going to signing with NBP again or go and see if someone else would take a fifth book in a series. Then an announcement was made on the forum about the bright, future plans of NBP. It looked like things were finally picking up after some serious re-organizing. Kharisma sent the contract in February. The contracts had changed considerably and the warning bells went off in my head again (I'll explain later). I had written the sixth story and wanted it in the anthology as well, but was hesitant about signing. 
On March 15th, we received a message saying that payments were rolling out. Statements were to follow over the next few days and everything should be cleared up. This was when I re-read the new contract, tried (and mostly failed) to negotiate some of the clauses and signed eleven days later. Later, when I saw no money, I contacted a few NBP authors to see if they'd been paid and no matter whom I contacted, the answer was always the same: No.  (The only people who had received a third and fourth quarter payment were authors who bugged Kharisma until she paid (no statements), possibly to get them off her back - I wish I'd been that persistent). 
So I signed the deals for the two books. I was a trusting idiot right there, signing even if it felt wrong to me, but I was brought to believe that everything was fine. The fifth story, Welcome, Brother, was rushed through editing (which were done decently) and it was out on April 23rd. I still had no pay check though for the third and fourth quarter of last year and first quarter for this year was coming up.

By now, you're probably wondering why the hell I didn't just send a "breach of contract - give me my shit back" message. The problem was that I couldn't. All the contracts had an early termination clause stating that I'd have to pay NBP money to get my rights back (all the authors were chained by this clause). The new contracts I'd signed had an increased early termination amount, so I was looking at impossible penalty fees if I pulled my books (see my comment near the bottom about early termination clauses and how to make them work for you).

On June 2nd I’d had enough and attempted to get my rights back. I sent Kharisma a breach of contract letter, but said I wasn't ready to pay the $1500 to get my short stories back. I offered her a fair deal, but fortunately she didn't reply and I withdrew my offer after talking to the other authors.

On June 5th, the same day I withdrew my offer, "Heather" (who had been assigned to handle everything because Kharisma could no longer work due to poor health) sent a message saying that NBP was closing. We would all get our rights back (yay!), but had to pay her for covers and edits if we wanted to continue using them (here I knew for a fact that my editor hadn't been paid) and we would definitely receive our payments as NBP was closing because of personal reasons and not financial reasons. 

So, okay. Phew, relief. I was getting my rights back. The titles were pulled off the sales sites pretty promptly and I received an official letter saying that I had my rights back.

Okay, so June and July came and went. I was terribly busy, using up my month of summer vacation to re-edit, reformat and republish my former NBP titles, plus the sixth story that had never been published. I was still in close contact with the other former NBP authors. There were only a few updates from the NBP front from "Heather," one saying that 7 authors had been closed out and other payments would start rolling out before August 15th. None of the authors I've been in contact with were one of those 7. A couple of weeks later, there was a new message saying that they would start payments ON August 15th and they should all be out by August 31st. 

Well, August 31st was a week ago and the authors still haven't received a dime. What's more, the only editor I knew worked for them (we never got to know how many editors there were or what their names were (clue)) hasn't been paid and I recently learned that the cover artist, who designed over 90 covers for NBP, didn't receive payment for the covers (she'd had to dish out money from her own pocket to buy the images used for the covers! 90 covers!).

Needless to say, we've repeatedly sent messages to all known email addresses of Kharisma and "Heather," we've sent messages through facebook and other mediums, one of us had her phone number and called her, but there has been absolutely NO reply. She has cut off all communication. She has changed her phone number and no matter how you try to reach Kharisma or "Heather," she will not reply.

For three whole months, since closing, “Heather” put a lot of powder into assuring us that we’d get paid. Why? I’m not sure. The only reason we got for that pay date was because some retailers take a couple of months to send their payments.

So, I’m not saying the following is what “Heather” did, but let’s set up a hypothetical study case where a publisher might do this:
 
Let’s say that, despite having offered and acquired new contracts, the publisher has known for months that they’ll never be able to pay the money owed but wants to cash in on the business a little longer. Let’s say that they are getting too many complaints and finally decide to close shop. Let’s say that they figure that since they don’t have any intention of paying, they might as well milk the cow for all it’s worth and make sure the pesky authors can’t stop the final payments from the retailers, so they send out messages with promise of pay to keep them placated. Then, on payday, they stick their middle finger in the air, thank the authors for a wonderful time of working together, take the money and stop replying to any messages (even going as far as changing phone numbers and moving states to get out of reach). 
 
This is just one scenario of why a publisher might waste their time to assure authors they’re getting paid when they are, in fact, not. 

I'm not about to make a habit of flushing out publishers or people like this, but I want to warn other people about these business practices, about entering into a contract with Kharisma Rhayne (or any of her many aliases – see the bottom of this post), and hope that by telling my story people will learn to be on an early lookout for signs of trouble (which are summarized below). This is not an isolated case, there are many independent publishers who have gone down this swirl hole. These kind of stories are coming to light more and more.

If the publisher is in breach of contract, don't wait; call them on it. If they don't correct the breach, don't listen to any golden promises or excuses; ask for your rights back. If your contract has an early termination clause, challenge it. Speaking of, when signing contracts that have early termination clauses and there's no way the publisher will remove them, make sure you negotiate into the clause that if the publisher is in breach of contract you don't have to pay the fee to get your rights back. This is extremely important. Some say that you don’t need to do this since if the contract has been breached the clause is invalid, but to save yourself a lot of headache on whether or not your publisher will validate that argument argument (as far as I can tell, even experts disagree on this clause as it all depends on the wording of the rest of the contract), negotiate on it. Yes, contracts can be negotiated as they are a mutual agreement between two parties.

Now, there are loads of former NBP authors and staff that are owed money. Where is this money? Will we ever receive it? Will the cover artist ever be reimbursed for all the stock photography she had to pay out of her own pocket? With absolutely no communication it’s impossible to tell. My only option is to look for a pro bono lawyer who will file a case against her. I probably won’t get my money back, but I cannot just sit by and watch a person get away with this. No way. My sense of right and wrong is too strong to ignore this. So, Kharisma, even if you've spent the money and can't pay me back after being ordered to do so by a judge, prepare for court.

It's been a brutal lesson; a harsh reality that not all people can be trusted when it comes to money. Anyone with a computer and internet access can pull a money-making scheme. I've learned a lot through this, for example not to be so trusting and to spot the signs of trouble. I've also learned that I need to stop being so damn nice and understanding when it comes to being paid! Publishers aren't doing us a kind favor by publishing us - it's a mutual cooperation where both parties are to be paid. It's a business transaction, even if it may be a very personal and/or friendly one. Without authors there would be no publishing houses.
A friend assures me that not all start-up publishers or small publishers are to be distrusted, and she's right, but I've been burned badly, beaten with a bat and left to simmer in my own blood without an explanation. It's an unpleasant feeling and this is why I'm sticking with established publishers from now on and will publish my shorter works under Ice Cave Publishing (which is only for me as I am currently in no position to take on the responsibilities of running a multi-author publishing house). Established publishers aren't a sure deal though: Reportedly, Silver Publishing nearly went bankrupt after spending the author royalties on expanding the business and other things.

Here are the main points I've learned about a publishing firm in trouble:
- Late or no payments
- Unrealistic promises/goals
- No replies to emails for a lengthy time/key person hard to reach without explanation (the MLR Press owner and her editor in chief always let us know if they're away and when they'll be back)
- Unclear or no answers (or "internet/computer issues" being used as a constant scapegoat)
- Faulty formats not fixed
- No royalty statements
- Promised dates are not met
- Everything grinds to a stop when the boss isn't around

Additionally:
Beware of early termination clauses! Make sure you negotiate the wording of the clause, if it must be there, so you won’t get stuck if the publisher is in breach of contract.

Here is my additional advice:

Authors: 
- Listen to your instincts and talk to other authors of the same publishing house if you have concerns. It doesn't mean that you're going behind the publisher's back (critical thinking is never wrong); you're just making sure that everything is as it should be. If there is foul play, it can be discovered much sooner if people communicate. 
- Before signing a contract, ask people who are published with the firm how they like working with them. Ask if things seem to be in order and if they’d recommend people signing with them. 
- Do a web search on a prospective publisher, both the publishing house and the people who run it. Most are legitimate, but there are always kids who won't play nicely. For example, had I Googled "Kharisma Rhayne" before I signed up, I'd have discovered something that would definitely have made me change my mind (whether or not the accusations are true, it would be too much of a risk).
- If it sounds too good to be true, it probably is.

Publishers: 
- Author royalties are NOT yours to spend. This is not your money and never was. The royalties should be set aside until they're paid out. Use whatever profit you receive to pay for whatever it is you need to pay for. If you can’t pay for it, take a loan, just don’t touch the author royalties or things will quickly slip downhill.
- If you can’t handle the amount of authors, don’t take on more!

Think you have what it takes to be a publisher? 
- Make sure you have the time and money if you decide to start a multi-author publishing house. 
- Treat this as a real business. 
- Delegate work and get more people on board so everything doesn't rise and fall with you. 
- Post updates regularly and keep a friendly communication. Try to reply promptly to email.
- Remember that there will be a lot of people counting on you and the money you’re handling for them is their bread and butter.

Lastly, none of what I've written in this post is libel. I have proof in forms of emails and screenshots for every fact written and, like my fellow former NBP authors say, it isn't libel if it's true. Over 40 people can verify that this development of NBP is true and can tell you even more startling facts. All I've done here is reveal what happened to me to try to teach people how to spot the signs. When I read over this post I feel so stupid for not having demanded to get out much sooner. However, this happened over the course of a year and a half and I didn't have every clue written on a neat piece of paper.

Before I end this, I'd like to say to the M/M writers and readers out there that the M/M author Blak Rayne is not a Kharisma Rhayne alias! It's unfortunate that Blak is already suffering from having a similar last name. 

Since we’re talking names, Kharisma has a long list of aliases. Make sure you never enter into a contract with Kharisma Rhayne, Denise Caroline, Mystee Blackwood, or Denise Blackwood (which is her real name, according to the public record of her registration of Kharisma Rhayne LLC). I have verified that these are all one person.

These are only a few names that have been pointed out to me by others who have looked into the complex personality of Denise Blackwood: Whispering Peace, Alex Raines, and Catalina Cordova, but I haven’t been able to confirm those myself. “Heather” might also be an alias, we never received her surname or any information about her as she always communicated through Kharisma’s Facebook page, email account (along with NBP’s account and a new account created for the closing of the house) and Yahoo forum account.

Anyway, I realize that I may be committing a professional suicide by posting this. I've heard plenty of stories where the publisher/author being exposed somehow manages to turn herself/himself into the victim. I've heard how they turn their fans and followers against the whistle-blower, down-rate books on Amazon and Goodreads, mark the whistle-blower as a badly behaving author, troll around anywhere they can to discredit and ruin the person who dared speak up about the injustice of being deceived and stolen from. I am prepared for this, but I will not take part in a flame war, so if I see one starting I will walk away from it and continue writing my books. I won't get any backlash from the former NBP authors I've been in contact with because they already know that they'll never see a dime of their royalties and support me in what I'm revealing. I will absolutely NOT ask my fans and followers to attack Kharisma's books on book forums (please don't or you'll get me in trouble). What's more, I live in a world with freedom of speech and I'm using that freedom today.

Why did I decide to reveal this? I couldn't just sit by with the nagging thought that Kharisma might try to take advantage of another unsuspecting person like me. Furthermore, I can’t bear the thought that she might get away with this (in which case, she might very well try this again), which is why I’m looking into legal counsel. Sure, she can file for LLC bankruptcy and I’ll never see a dime of my money, but from where I’m standing and from what I know about accounting, business law and business ethics, she’s behaved in a deceiving and fraudulent manner toward me, especially over the past few months, and that is punishable by law in the United States. If revealing this experiences saves ONE person from a similar experience, then this post is a success.

Finally, if you're able, I would very much appreciate if you could share this message. Especially if you're a part of a writer group that is looking for publishers, or a group of new and upcoming authors.

Sept 13th Update: We finally received a surname for “Heather” after I posted the original article, in a letter attempting to free Kharisma from all legal claims and liabilities by transferring everything over to “Heather.” However, we have been unable to locate a real person with this name, so we still think "Heather" is fictional. Still, even if there was a “Heather” there are no witness signatures on that document, so...

Sept 13th Update: No Boundaries Press had a vendor area which basically functioned as a place for non-NBP published people to sell their books and earn 70% of the sales back, kind of like Amazon (except NBP handled all the uploading and there was no way to monitor sales like you can on Amazon). We always assumed that these vendors always got paid first thing, but I've been contacting them and according to those I've spoken to, one hasn't received any payment while another (one of the first ones) received a payment in 2012 but not since.

2 comments:

  1. Excellent article, thanks for posting it. As someone who has signed with a publishing house and has given up hope that my novel will ever make it to the light of day much less get assigned to an editor, it gratifies me know that I'm not alone.

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  2. I'm a Reader, not an Author, and I feel so aggrieved on your behalf, Erica.

    I suppose most 'ventures' are frought with difficulty, but to be 'ripped off' by unscrupulous people is the lowest of the low.

    Anyway, I'm of the opinion that readers follow the author (irrespective of who the publisher is) - like me - so, (I already have a number of your books) I'll continue to look and find and BUY your stories!

    Good Luck
    Regards & Hugs
    Carole-Ann

    ReplyDelete