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PX Eliezer7
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VoIP company accused of being a pyramid scheme

Montana accuses NC company of running pyramid scheme
(AP) – 08/04/2010

HELENA, Mont. — Montana regulators have accused a North Carolina company of running a pyramid scheme involving phone and Internet services.

Commissioner of Securities and Insurance Monica Lindeen said Tuesday that ACN Inc. lured hundreds of Montanans to join by making deceptive claims that members could earn large sums of money by recruiting new members and selling services.

ACN's services include digital phone service and high speed Internet that the company's website says are not available in major Montana cities. Its website also lists satellite television and home security services.

ACN executive vice president Dave Merriman said Wednesday the only service ACN sells that is not available in Montana is local phone service. He added that ACN representatives only get paid for selling services, not for recruiting other members.

There is, he said, "a misunderstanding as to how our plan works."

ACN was issued a cease-and-desist order, which also names ACN officers and founders Gregory Provenzano, Robert Stevanovski, Anthony Cupisz and Michael Cupisz.

The state alleged ACN recruited about 400 Montana participants who paid a total of nearly $300,000 to be a part of the program and received about $1,600 in compensation for selling phone services in 2008 and 2009. Montana participants received just under $16,000 for recruiting other members in 2009, Lindeen's office alleged.

Lindeen's office is seeking restitution and fines.

The company has the right to request a hearing on the matter.

Merriman said the company is reviewing the order with attorneys.

-------------------------------------------------

Company's own description:

ACN Digital Phone Service

Make phone calls using your high speed Internet connection instead of a phone line. All for less than you would spend on traditional phone service.


(so clearly the service offered is a VoIP service)


nitzan
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said by PX Eliezer7:

members could earn large sums of money by recruiting new members and selling services.
How is this different than any other company offering an "agent", "reseller", however-you-wanna-call-it program? unless they company didn't actually provide any services and ONLY sold "membership" then I don't really see the problem.

Providers offering such reseller programs may want to take note though. I doubt they'll get in trouble for this but it's an interesting case.

Mango
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reply to PX Eliezer7

said by PX Eliezer7:

about 400 Montana participants who paid a total of nearly $300,000
If I understand it correctly, each person paid about $750. I've never personally done any MLM but I have a friend who does a great deal. From what I've seen, that seems incredibly high. Every MLM company I've heard of charges $10-$20 per year or $50-$100 for a lifetime "membership". Or, nothing at all.

And is the $1,600 + $16,000 the total payout to all the members combined? If so I can see why the company's in hot water...

...but come on, $750 to join a VoIP MLM program? If I read it correctly, there's clearly a damn good con artist at work here.

m.
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Yikes2000

join:2001-08-15
Irvine, CA

1 edit

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said by Mango:

said by PX Eliezer7:

about 400 Montana participants who paid a total of nearly $300,000
If I understand it correctly, each person paid about $750. I've never personally done any MLM but I have a friend who does a great deal. From what I've seen, that seems incredibly high. ...
Maybe not $750 at once, e.g. $199 setup + $45/mo for VoIP service = $750 in 12 months. Payout could be delayed until a downline member has completed a year, hence the low total payout of $16,000. Since $16K / 400 = ~$40, the original pitch could be "sign up just one member per month, then your VoIP is FREE!"

I'm just guessing for fun...

PX Eliezer7
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reply to nitzan

said by nitzan:

How is this different than any other company offering an "agent", "reseller", however-you-wanna-call-it program? unless they company didn't actually provide any services and ONLY sold "membership" then I don't really see the problem.
Investigators said the odds of making any money in ACN were overwhelmingly against participants.

“In 2008, ACN recruited 91 Montana participants who paid approximately $61,741 to be a part of the program,” Lindeen’s office said. “Only two of the participants made any money, with one participant making $696 and the other making $700.”

In the whole of 2009, according to investigators, Montana-based reps paid ACN nearly $239,000 to be a part of the program. The money came from more than 300 participants. “ACN’s records indicate a mere $896 was paid out in compensation to these participants,” Lindeen’s office said.


»www.mlmwatchdog.com/Report_ACN.html

mazilo
From Mazilo
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said by PX Eliezer7:

In the whole of 2009, according to investigators, Montana-based reps paid ACN nearly $239,000 to be a part of the program.
WOW ..., that's about 1,195 units of Ooma HUB ($200/each)!
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burgerwars

join:2004-09-11
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reply to PX Eliezer7

Is this the same company: »www.acninc.com/acn/us/trump.html ?

If Donald Trump is "sold" on them (I think he's a paid speaker, thus can keep his hands clean), I think I would run. MLM stuff isn't something I'm about to get involved in.


PX Eliezer7
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Yes, it is the same company as the one endorsed by Donald Trump.

-------------------------------------------------

Donald Trump is a capable man, especially in real estate. Still, it must be noted that he had a HUGE head-start being that his father was a very wealthy NYC real estate developer.

In addition, Trump companies have been through bankruptcy quite a bit.

Then, there is the hair.

So I don't necessarily see how a Trump endorsement (other than perhaps in real estate) should be of much value.


nickdigger

join:2009-06-13
reply to Mango

If I understand it correctly, each person paid about $750. I've never personally done any MLM but I have a friend who does a great deal. From what I've seen, that seems incredibly high. Every MLM company I've heard of charges $10-$20 per year or $50-$100 for a lifetime "membership". Or, nothing at all.
From what i heard (~15 yrs ago), $500 is the 'line in the sand', above which the FTC gets reeeeaaally interested, and quickly.


burgerwars

join:2004-09-11
Northridge, CA
reply to PX Eliezer7

said by PX Eliezer7:

Yes, it is the same company as the one endorsed by Donald Trump.

-------------------------------------------------

Donald Trump is a capable man, especially in real estate. Still, it must be noted that he had a HUGE head-start being that his father was a very wealthy NYC real estate developer.

In addition, Trump companies have been through bankruptcy quite a bit.

Then, there is the hair.

So I don't necessarily see how a Trump endorsement (other than perhaps in real estate) should be of much value.
Don't trust a Trump real estate endorsement either: »www2.tbo.com/content/2009/mar/06···reaking/

"...buyers in both condos later discovered that Trump had merely licensed his name to other developers. He didn't finance either project."


JawsII

@wispwest.net
reply to Mango

What a shame that not one person on this site has any accurate information about ACN, the cost to join, the cost of the VOIP Video phone, or the cost of the service. That is bad enough, but not even commissioner Lindeen can get the information correct. Not the the number of participants in the State of Montana, or even the earned income and where it comes from. ACN is a network marketing company that pays it participants a commission for every "product" that a "customer" purchases and pays their bill each month. There is "NO" compensation for each new participant, though bonuses can be earned on participant acquisition. There is also no guarantee of "any" income amount, only the potential if you "work hard"! A little different from being elected to "work" for the State of Montana and sitting on your lorals encouraging your friends to seek out MLM companies to investigate but never doing the leg work yourself or even getting close to getting the actual numbers correct. Considering the drivel that was published in this notice and the inaccuracies even between publications, I seriously doubt that Ms. Lindeen even saw a presentation, or a DVD indicating exactly how ACN goes to market. And there will be little or no repercussions for Ms. Lindeen in the process of trashing hard working peoples attempts to make a living and stay and work in Montana.


PX Eliezer7
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Obviously this matter will be the subject of lengthy adjudication.

If you feel that the specific information from the Montana authorities is wrong, could you please provide what you regard as the correct data? I am sure that would be appreciated.

said by JawsII :

sitting on your lorals
Loral was a cigarette brand of RJ Reynolds Tobacco Company, and Loral is also a major US defense contractor.

However, in this case, I believe that you mean "laurels".

Mango
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This thread had all but disappeared off the forum's radar, but since you brought it up again...

I have been through, as far as I know, every page linked on »www.acninc.com/acn/us/acn-opportunity.html that relates to the "business opportunity". I can't find any information about what it costs to join the program or what I will be paid. Why not? Like PX Eliezer, I too would like to know what you regard as the correct data. Also, providing your name would give the information you give us more credibility.

Since you made me curious, I explored your website a bit more. I was able to find information on the site about the cost of the services. Here is what the site states, for services in the US:

said by »www.myacn.com/digital/restrictions_ata.html :

Phone Adapter - $29.99
Shipping & Handling - $10.99
Activation Fee - $29.99
Total equipment charge - $70.97
These are the prices for what appears to be a Linksys ATA. For the video phone, the device is $130, shipping is $30, and activation is $40.

said by »www.myacn.com/digital/restrictions_ata.html :

At the time of order, your credit card will be billed for all applicable charges including the above one-time charges and monthly service fees. All prices are subject to change without prior notice. One year commitment applies. If you cancel your ACN Digital Phone Service 3 or more days after ship date of your device an early termination fee of $59.99 will apply.
For the video phone, the commitment is two years and the termination fee is $199.99.

The way I read this is that there is essentially no free trial period. It is unlikely that the device would arrive within two days of shipping, and even if it did, you would have at most one full day in which to evaluate the service.

All this to say that I would never buy services with terms like these. Why are they necessary? Isn't the service good enough that customers will remain customers, because of the good service?

The service itself is $25/month or $30/month with the video phone, and includes unlimited US/Canada calling.

On another note, has anyone reviewed the Donald Trump videos? I looked at the video at »www.acninc.com/acn/us/trump.html . It's hilarious.

said by Donald Trump :

There's so many things to say about ACN. This is now my [holds up five fingers] fourth time. And every time...I like it. I just like it. There's a feeling that is just incredible. When you walk into the arena - and this is, honestly? This is the [five fingers] fourth time I've done it; this is the fourth time I've walked into the arena; this is the fourth time I've felt like I'm part of you. [Cut]

It's all about confidence. It's about confidence when you're working with ACN; it's about confidence when you're selling the video phone, or...or...it's about confidence with anything. Life is about confidence. [Cut]

As you probably know, ACN is a tremendous supporter of Ronald McDonald house in Charlotte, and I'm gonna give $10,000 on behalf of everybody in this room. They're a very big supporter; they're a much bigger supporter than that actually, and, and, uh, I...I think it's wonderful. [Cut]

So you have to be born, with something special. You have to love what you do, which you all do. I mean, you people love what you do, I mean, the enthusiasm here is [unintelligible.] You need a great product. You need that product. You have to know the product, you have to understand the product, and you need a great product, and you have a great pro-- I mean, I use your product, so. [Cut]

You can never ever quit. You can never ever give up. [Cut]

In my first meeting that I did with you three years ago, the phone was, I thought was really good? But if I compare the phone today and the phone then, there's a tremendous difference. [Cut]

And I think what's going to happen, uh, over the next short period of time, I think that you're gonna see things that are really amazing, and you are the leader in the field. [Cut]

Love what you do, (and you do,) love what you do, never quit, never give up, go into the right business, and you're there, and I can't say that for about 75% of my little talks, but you are in the right business, and probably less important than that, but very important, you're with tremendous people, because, your founders, I've gotten to know these guys well, and I can tell you that your founders really love the people in this room, beyond the money, beyond a lot of other things, they love the people in this room, so, you know, don't take my word for it, but if I were you I would stick with them, because they are great people. [Cut]

I was just interviewed by one of the big Charlotte papers, and they said, "What did you - what do you think of the founders?" And I said, "You know? I've seen a lot of people. I've melt - met a lot of people. I've dealt with good, I've dealt with bad. I've dealt with some really good people, and I've dealt with some really terrible people. And I think I really understand these guys now, after, literally I'm with them over three years as their friend. They love this company. [Cut]

And they love the people that they work with. And I really, and I mean that-- and if they didn't I wouldn't be here.

In my opinion, he's a terrible speaker. He doesn't ever say anything that tells me he knows any more about the company than you could find by spending 30 seconds on their home page. The entire thing is just a bunch of bad cliches stung together. He even discredits himself by saying "I can't say [this is the right business] for about 75% of my little talks," and "don't take my word for it".

m.
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PX Eliezer7
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Donald Trump's FATHER was a wealthy real-estate developer.

While Mr. Trump is a good businessman and has accomplishments of his own, IMHO he is also an example of someone who started life already on 3rd base, then bragged about a home run.



RockyBB
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reply to Mango

Mango has done a bit of searching and established that ACN is a bad deal relative to competitors, and that the pitchman might not be so sincere (you should see Trump pitching his MLM vitamin business!).

But the topic is about litigation involving ACN. Anyone with any history in the telecom industry knows that ACN has been around for years. My perception has been that ACN is a network marketer that used to be the evil kind, but had changed its spots a few years ago. Offering a bad deal is one thing, but violating the law is another. I'm thinking that any evidence that the Montana authorities have is several years old.


PX Eliezer7
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said by RockyBB:

(you should see Trump pitching his MLM vitamin business!).
Obviously those vitamins don't help that much with hair problems.

said by RockyBB:

But the topic is about litigation involving ACN. Anyone with any history in the telecom industry knows that ACN has been around for years. My perception has been that ACN is a network marketer that used to be the evil kind, but had changed its spots a few years ago....
ACN did ultimately prevail in similar legal proceedings in Canada and Australia.

said by RockyBB:

Offering a bad deal is one thing, but violating the law is another.
Agreed.

But AMWAY is perfectly legal, yet I have no good wishes for them either.