For months, readers have told The Consumerist of fake Con Edison employees showing up on their doorstep. The story is always the same; they open their door to find people in Con Ed outfits almost demanding that the customer sign a form to save 7% on their bills. The “Con Ed” employee then demands to see the bill and thrust their fingers at the part where it says you can save by switching to an alternate energy supplier. But they don’t actually work for Con Ed; in fact, they work for IDT Energy.
When the Queens Tribune asked about their business practices, IDT Energy said, “This is not a scam, but it is something new to people.” From reader reports, and what they saw when IDT Energy came to their door, The Consumerist knew this statement was disingenuous, and they hired me to prove it. I was instructed to get a job with a marketing group called Midtown Promotions, which is actually the company that allegedly sends out the impostors. I was going undercover…
This is part 1 of our undercover report into IDT Energy, an energy reseller in the New York area…
Now that I’m done working for them, I’ll you how it went down.
Between Friday night and Tuesday morning, I spent nearly all my time prying into Midtown Promotions, one of the companies contracted to get subscribers for IDT Energy. Evidence suggests that Midtown Promotions is a subsidiary of the DS-Max corporation, which itself is reputed to be a sort of international pyramid scheme operating since the late 70’s. I’m overwhelmed, exuberant, and totally terrified.
[ed. In 2003, DS-MAX split into three groups, Innovage, Cydcor, and Granton Marketing. In 2006, a company called Nu-Life bought all the rights to DS-Max's name. Why? We have no idea.]
IDT Energy is one of New York’s 36 energy service companies, or ESCos, following Con Edison’s deregulation in 1997. The New York Times put it this way in an August 2000 story, saying that thanks to deregulation,
Con Ed was required to sell most of its power plants and customers were permitted to buy their electricity from private, unregulated companies instead of being forced to buy it from Con Ed. No matter which company supplies the electricity, however, Con Ed continues to deliver it through its wires.
So, now that Con Edison is merely your energy provider, each month your electricity price is determined by the fluctuating open market, which could mean you are paying a higher rate than if you were to sign up with a supplier, such as IDT.
The information I pieced together online made DS-MAX/Innovage affiliates look pretty awful— for the employees. The sales force earns only $6 for every signature they get. But while the sales force earns at best $600 a week for sixty hours of time on the clock, the management is clearly earning more, judging by their expensive watches and suits. There also seems to be an emphasis on employees building a “team” that works under them. According to Wikipedia,
“While DS-Max as a whole has grown quite large through the years the vast majority of distributors and managers have not achieved the high level of success that was promoted to them during the initial recruitment process. In the 20 plus years of operation the DS-Max business model has generated some tremendous success for a small group of Vice-Presidents, or as they are referred to now, National Consultants, but the question of how many have found success in DS-Max compared to the number who have attempted to achieve success can only be answered by analyzing accurate and detailed records of these organizations and their affiliates. This type of public financial disclosure is almost impossible to obtain because each individual office is privately owned and thus they are not required to disclose this information.”
The tales turn twisted in online forums like DS-Max – the Aftermath. I read stories from ex-employees telling about six-day weeks at ten or more hours a day for a miserly commission and no possibility of serious advancement. There are allegations of brainwashing, all-day training sessions designed to erase thoughts of self-worth or of quitting. What was I getting into?
Still, there’s more. I’m reading stories about brothers and sisters not seen since their hiring, lost to an organization demanding endless hours and offering below minimum wage. Bankrupt college grads paying their own way on road trips undertaken with those same leaders. Training sessions designed to mind-rape the susceptible go-getter looking for a big break. DS-MAX took over, took all, and left their employees nothing, former workers allege. As one ex-DS-MAX victim tells it on Wolfram.org: “When I finished with DS-max I had $80 in my pocket, was $16,000 in debt, had a repossed [sic] car and not a place to stay. This was after four years of dedidation [sic] to the business.” And that was from someone in management, the vaunted position sales slaves are promised if they bring aboard enough other sales slaves.
Monday was a sleepless night. There were just too many questions: Is it really true that DS-MAX, which reputedly influenced the business practices of Midtown Promotions, practiced subtle forms of mind control on their employees, and kept them so busy they don’t even see loved ones, or even call? And how might door-to-door salesmen for IDT-Energy get away with wearing Con-Ed uniforms when they don’t work for Con Ed? Would management be aware of this? Is Midtown Promotions even the right company to focus on?
I took a step back. Forgot that I was working for the Consumerist. To go undercover, one goes beyond Method Acting. When De Niro assumes the role of a bloated boxer, he gains weight and acts like a roughhousing bastard for a few weeks. But, he experiences little actual risk. We don’t know what kind of people might have been behind DS-MAX, or run Midtown.
I created new e-mail accounts, and phone numbers. I didn’t change my resume, except to leave out that part where I worked with Billionaires For Bush, a satiric street theater troupe. It’s always fun to do these things when it doesn’t matter if someone finds out who these crazy e-mails are coming from. Undercover, any slip could blow the entire operation.
Nonetheless, I knew I would wake up Tuesday morning and that there would be no turning back. Once I was hired, I would have to see this through to the end. — BRIAN FAIRBANKS
TABLE OF CONTENTS
Note: No definitive ties have been established between Midtown Promotions and DS-MAX/Innovage.