It's scary independent of whether it's valid. And that's the problem.

It's like putting a sign in front of a retail store that says "make sure you trust the proprietor before patronizing this store" -- it's not saying anything that isn't true, but it's also going to be a direct cause of fewer people patronizing the store, even if the proprietor is trustworthy.

If the sign then only comes down by paying money to the party who put up the sign, well, now it's a racket.