OT: ACN "network marketing" Scam?

My neighbor’s daughter went to some sales pitch last night for a Company called ACN. The basic deal is that you pay ACN $500 for your “sales kit” and then go out and sell your friends and neighbors (your “network”) on switching long distance service and utility service to ACN (which near as I can tell is some kind of reseller for other providers). You get a commission and soon are off to sit on a beach and watch your riches collect interest.

All of the obvious red flags are there, the website doesn’t include any financial information, the sales pitch trots out a couple people who made “thousands” in “days” but doesn’t tell you average returns per “sales associate.” They want $500 up front rather than, for example, collecting it from all those commissions you’ll be making.

My guess is that it’s pretty much a Ponzi scheme that is just on the right side of legal and that some huge percentage of revenues are generated from the $500 per sucker fee and most people never sell enough to get 1% of that back.

All of that said, my neighbor’s daughter seems pretty excited about this and I’m wondering if anyone out there has dealt with this particular company or has info on “network marketing” in general (Amway, Cutpro, etc.) that I can pass on. Her parents are new to the country and sent her to us for advice.

Thanks in advance. Sorry for the waay OT post.

Man, I agree with your assessment - tell her to stay away!

Found some info on the Internet-they’ve run into trouble in Canada (I’m sure there is more info like this out there): Multi-Level Marketing Firm Charged
for Misleading Participants

OTTAWA, August 29, 2002 — The Competition Bureau announced today that eight charges were laid in Halifax, N.S., against All Communications Network of Canada Co./ACN, Reseau De Toutes Communications Du Canada C.R.I., under the Competition Act’s deceptive marketing practices provisions. The company, whose registered corporate office is in Halifax, operates a multi-level marketing plan which promotes and sells long-distance telecommunication services.

The Competition Bureau alleges that ACN Canada, as it is known, and its participants, through its web sites and at public meetings, recruited new participants by exaggerating income expectations without disclosing the income of a typical participant. Under the Competition Act, it is illegal to make reference to earnings in a multi-level marketing plan without disclosing a typical participant’s income. In addition, operators of a multi-level marketing plan must ensure that any income representation made by a participant in the plan includes disclosure of a typical participant’s income.

Furthermore, ACN Canada was charged with operating an illegal scheme of pyramid selling by offering recruitment bonuses to participants who paid for the right to recruit other participants.

“We are committed to ensuring that Canadian consumers are protected from deceptive recruitment practices by multi-level marketing companies,” said Raymond Pierce, Deputy Commissioner of the Bureau’s Fair Business Practices Branch. “We will continue to thoroughly investigate such cases in our continued efforts to provide Canadians with a marketplace that is both fair and free of deceptive business practices.”

Consumers who suspect they have been the victim of deceptive business practices or who want information on the application of the Competition Act should contact the Bureau’s Information Centre at 1-800-348-5358, or visit our Web site at http://competition.ic.gc.ca.

The Competition Bureau is an independent law enforcement agency which ensures that all Canadians enjoy the benefits of a competitive economy. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

For media enquiries, please contact:

Maureen McGrath
Senior Communications Advisor
Communications Branch
(819) 953-8982, or (613) 296-2187 (cell)

For general enquiries, please contact:

Information Centre
Competition Bureau
1-800-348-5358