As somebody who has worked for a number of years in commercial VO casting, I can tell you that our auditions are, without exception, the client's material - even the celebs audition the same material as the rank & file. Most of the ad creatives are too busy to try to imagine what something will sound like, and are too married to their own words to hear anything else. And yes, many of our auditions have been lifted directly to air - a source of pride to our engineers - but never without appropriate payments to the performer - union or otherwise.
The agencies and unions offer some protection and legitimacy, but even they can't prevent someone unscrupulous from ripping you off - they can only go to bat for you if it happens. Most legit companies wish to keep in good standing with the unions, so they play by the rules - many flybynights don't care - they just open with a new DBA and keep ripping people off. If you're trying to find work outside the agencies, you're totally out there on your own.
The best thing you can do is cover your back end, and stuff like watermarks can be really useful for that.
(I was similarly ripped off on a photographic deal, to the tune of at least $20,000+.....so once burned.....)