Consumerist Undercover At IDT Energy: Day One

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

1. Day One
2. The Job Interview
3. The Day Of O
4. Let’s Get Juiced
5. The Meeting
6. The Meltdown
7. The Confession

Note: No definitive ties have been established between Midtown Promotions and DS-MAX/Innovage.

Comments

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  1. exkon says:

    Seems a little self-defeating to be placing this while they’re undercover…but they if you guys know something I don’t keep it up!

  2. bambino says:

    Bravo! Encore!

  3. GreatCaesarsGhost says:

    @exkon:
    He is no longer undercover.

  4. homerjay says:

    Yeah, I really don’t think the ‘Tuesday Morning’ he was referring to was yesterday.

  5. rmz says:

    I can already tell that this is going to be an epic series.

    Looking forward to the next part!

  6. maryland1 says:

    How much acting skill does it take to be a temp? This guy sounds like David Cross in Arrested Development.

  7. The Walking Eye says:

    RTFP, cripes.

    “Now that I’m done working for them, I’ll you how it went down.”

  8. TPIRman says:

    This is awesome.

  9. Kos says:

    The company you described sounds like those national magazine sales groups. The NYTimes did an article on them some time ago. Maybe someone posted it here. Anyone else know what I’m talking about?

  10. Ben Popken says:

    @Kos: Yes, that excellent article is DOOR TO DOOR: Long Days, Slim Rewards; For Youths, a Grim Tour on Magazine Crews (link).

    Unfortunately it cost $4.95 to pull from the archive, but I love this NYT reader letter in response:

    To the Editor:

    Re ”For Youths, a Grim Tour on Magazine Crews” (” ‘Door to Door’: Long Days, Slim Rewards,” front page, Feb. 21):

    Caveat emptor: Our own quick Internet search revealed numerous consumer complaints against these subscription companies.

    So now, whenever a young person comes to our door peddling subscriptions, we have our response ready:

    If you come to this door with your hand out, it had better be Oct. 31 and you had better like candy.

    Elizabeth Schwartz
    San Diego, Feb. 21, 2007

  11. Darren W. says:

    Enough teasers already, where’s the dirt???

  12. jgkelley says:

    @Ben Popken: Signing up at NYTimes with a .edu email account grants access to articles such as this one in most cases. All they do is an auto check to be sure that your university isn’t, I dunno, Messiah College or something else right-wing/private enough for them to not consider it a real school. http://www.nytimes.com/gst/ts_university_email_verify.html

    Link to NYTimes article: http://select.nytimes.com/search/restricted/article?res=F2

  13. Anonymous says:

    I like where this is going.

    FanTAStic, Ben.

  14. Ben Popken says:

    @jgkelley: Sweet. Here’s the article:

    DOOR TO DOOR: Long Days, Slim Rewards; For Youths, a Grim Tour on Magazine Crews

    By IAN URBINA; BOB DRIEHAUS AND SEAN D. HAMILL CONTRIBUTED REPORTING.
    Published: February 21, 2007

    Two days after graduating from high school last June, Jonathan Pope left his home in Miamisburg, Ohio, to join a traveling magazine sales crew, thinking he would get to ”talk to people, party at night and see the country.”

    Over the next six months, he and about 20 other crew members crossed 10 states, peddling subscriptions door to door, 10 to 14 hours a day, six days a week. Sleeping three to a room in cheap motels, lowest seller on the floor, they survived some days on less than $10 in food money while their earnings were kept ”on the books” for later payment.

    By then, Mr. Pope said, he had seen several friends severely beaten by managers, he and several other crew members were regularly smoking methamphetamine with prostitutes living down the motel hallway, and there were warrants out for his arrest in five states for selling subscriptions without a permit.

    ”I knew I was either going to be dead, disappeared or I don’t know what,” Mr. Pope said.

    After persuading his manager to let him leave, Mr. Pope was dropped off, without a ticket, $17 in his pocket, at a bus terminal near San Antonio, more than 1,000 miles from home.

    More than two decades after a Senate investigation revealed widespread problems with these itinerant sellers, and despite several highly publicized fatal accidents and violent crimes involving the sales crews in recent years, the industry remains almost entirely unregulated. And while the industry says it has changed, advocates and law enforcement officials say the abuses persist.

    In interviews over seven months, more than 50 current and former members from almost as many crews painted a similar picture of life on the road.

    With striking uniformity, they told of violence, drug use, indebtedness and cheating of customers during their cross-country travels, often in unsafe vehicles and with drivers who lacked proper licenses.

    ”The stories about life on crew you hear from these kids are almost unbelievable,” said Officer George Dahl of the Louisville, Ky., Metro Police Department, who estimated that his department had cited or arrested more than 70 sellers for assault, unlawful solicitation or drug possession in the last two years. ”But you get them alone and start hearing the same sort of thing over and over from different crews and you start believing them.”

    In Collinsville, Ill., Daniel Burrus scrolled through digital photographs of bloodied faces as he described how, on a crew he helped manage for several years, men who missed their sales quota were forced to fight each other.

    In Flagstaff, Ariz., Isaac James sat with his wife and newborn daughter as he told how he and others on his mag crew — as they are typically called — stole checkbooks, jewelry, medicine-cabinet drugs and even shoes from customers’ homes.

    Last October, Jonathan Gagney joined a mag crew to escape the ”crack scene” back home in Marlborough, N.H. But one night last month, he called this reporter from a bus station in St. Petersburg, Fla., to say he had just sneaked away from his motel to run away from his crew.

    ”All I know is this guy got beaten and there was blood all over the motel wall,” Mr. Gagney said, his voice shaking.

    Earlene Williams, director of Parent Watch, an industry watchdog group, said her organization got about 10 e-mail messages or calls a day, double the number since 2003, seeking help from sellers, their families or lawyers.

    ”Publisher’s Sweepstakes is a lot smaller than it used to be, and so the magazine industry is less able to get subscriptions that way now,” Ms. Williams said, explaining why she was seeing an increase in problems with crews. ”And the telemarketing no-call list has also pushed the publishers away from telemarketing and toward door-to-door crews.”

    Last year in response to a similar increase in calls, the National Runaway Switchboard began training its operators to handle the cases.

    A Complex Industry

    Dan Smith, a lawyer for the National Field Selling Association, which represents about 60 percent of the magazine sales industry, estimated that 2 percent to 3 percent of all magazine subscriptions, or at least $147 million worth in 2005, were sold by door-to-door salespeople, up from about 1 percent, or at least $69 million in 2000. But the Magazine Publishers Association disagreed with Ms. Williams and Mr. Smith. It does not believe that door-to-door magazine sales have grown, and estimated that they account for 1 percent of sales.

    The industry consists of layers. While the bulk of subscriptions are sold directly by publishers and through direct mail, insert cards and the Internet, many magazine publishers also hire clearinghouses. These companies then subcontract with crew managers who hire door-to-door sellers. These layers of middlemen, and the small percentage of total subscription revenue involved, may help explain why publishers, who are always eager to increase readership, have been unwilling or unable to prevent mag crews from operating.

    Just who uses mag crews is in dispute. Crew members and the National Field Selling Association say many of the largest publishers use magazine crews or clearinghouses that rely on them. But of the five largest publishing companies — Time Inc., Condé Nast, Hearst, Meredith and Reader’s Digest Association, which collectively make up nearly half the industry as measured by advertising revenue — four said they did not use mag crews or did so only sparingly.

    A representative for Reader’s Digest said, ”A portion of our subscriptions come in through third-party agents, who may in turn subcontract to local vendors.”

    Dozens of magazines are listed on order forms offered by crews, including Reader’s Digest, Rolling Stone and Redbook.

    Rolling Stone declined to comment. A representative for the Hearst Corporation said that in recent years it had stopped hiring clearinghouses that use crews. But when subsequently asked why Redbook, a Hearst publication, appears among magazines sold by one crew, a Hearst representative e-mailed, ”We constantly fight unauthorized agents,” adding, ”It’s an ongoing battle.”

    Generally, the clearinghouses get about 40 percent of the subscription money and the publishers about 10 percent. The crew leaders get the other 50 percent, out of which they pay all expenses on the road, including the sellers’ commissions.

    ”Nobody is forced or pushed to do anything,” said Tim Peek, manager and recruiter for New Generation, a crew based in Vero Beach, Fla.

    Drugs and violence are forbidden, and some sellers make $1,000 per week, which is kept in a savings account for them, Mr. Peek said, adding, ”If they don’t want to work, they don’t make money.”

    John Wigman, the manager of Mr. Pope’s crew, Periodical and Publications Connections, said, ”I don’t see why you don’t tell about all the kids on drugs that we help out.” Asked to elaborate, provide names or respond to Mr. Pope’s accusations, Mr. Wigman refused and hung up.

    Mr. Smith said he viewed most stories of drug use and physical abuse as exaggerations. ”I don’t put a lot of stock in them because, to be brutally frank with you, abuse is like beauty. It’s in the eyes of the beholder,” he said. ”A loud voice, anything, can be called abuse.”

    While there may be a few shady operators, he said, the industry has cleaned itself up over the years, and his organization has helped through broad distribution of pamphlets on professional courtesy and ethics, yearly training seminars for members and one-on-one discussions with managers who have problems on their crews.

    By pressuring members to perform background checks on new hires, the association has cut the number of crimes and cheating perpetrated by sellers, Mr. Smith said. No one is forced to stay on crew, he added, since the association pays for a bus ticket home for any crew member who wants to leave.

    But labor and law enforcement officials said that since many sellers were runaways or high school dropouts or were from dysfunctional families or poor neighborhoods, they had fewer options and were reluctant to report mistreatment or leave.

    Many former sellers also said they kept quiet about problems out of fear of violence against them or those they left behind.

    Sellers reported having adopted fake names upon joining a crew, being beaten if they attracted police attention and receiving mail sent from home only after it was opened by the company’s central office. ”What happens on crew, stays on crew” was a common refrain.

    An escape from small-town boredom or overbearing parents, working on a mag crew is a lifestyle more than a job, and it brings good times with the bad. Like gangs, crews become family, sellers said, and the camaraderie of shared experiences is a bond not easily broken.

    ”You’re involved in bad stuff, you’re seeing bad stuff and they tell you, ‘No negativity,’ ” said Jennifer Steele, 23.

    In September 2004, Ms. Steele said, she was drugged and raped by two men who were partying with crew members at a motel in Memphis, where her crew, Precision Sales, was staying. When her manager told her to go back to work the next day, she said she ”threw a fit.” But she did as she was told, and worked part of the day before filing a police report and having a rape kit performed. She stayed with the crew for another seven months before quitting.

    ”I know it sounds crazy,” Ms. Steele said. ”But I believed my manager when he said he would never let that happen again, and I believed him when he said my mom had told him she didn’t care about me.”

    In January 2006, Ms. Steele left her crew and was placed in the witness protection program during an investigation of her former managers, who were accused in the beating and kidnapping at gunpoint of her boyfriend from a city bus, an incident that was caught on videotape and led to the conviction of one person for kidnapping for ransom and assault with a deadly weapon.

    ”They’re frustrating cases,” said Sgt. Jeanine Lum of the Norwalk Sheriff’s Station in Norwalk, Calif., near Los Angeles, who was involved in the investigation.

    ”The ones we arrest at the doors often just need to be sent home,” Sergeant Lum added, ”while the real culprits are back at the hotel or in some office somewhere.”

    Few Legal Protections

    Regulating the industry has been difficult because the companies, many of them operating only out of post office boxes, are small and frequently change names.

    ”The local police can’t keep up because the crews leave the state before they get alerted and the feds don’t bother with them because they say it is a state’s issue,” said Connie Knutti, who investigated several crews before she retired in 2005 as manager of field enforcement for the Illinois Department of Labor.

    The sellers have few labor protections because they are classified as independent contractors, which also insulates the companies from regulation, taxes and liability. Categorized as outdoor sellers, the door-to-door peddlers are also exempt from most federal and state minimum wage and overtime requirements.

    A majority of former crew members said that while they occasionally made several hundred dollars a week, most of the time they received little more than the daily allowance of $15, while the rest of their earnings stayed on the books to cover expenses. Many also said that subscriptions for magazines were never actually fulfilled.

    On any given day, said Mr. Smith, the association lawyer, there are probably about 2,500 people, typically ages 18 to 24, selling magazines door to door.

    But when state and federal labor department officials held a conference in 1999 to discuss concerns about the industry, a panel concluded that the number of sellers was probably closer to 30,000, said Darlene Adkins, vice president of public policy for the National Consumers League’s Child Labor Coalition. That organization ranks traveling magazine sales among the five worst jobs for teenagers.

    Catherine Barbour said it was the constant traveling and working in dangerous areas that most worried her when her daughter, Tracy Jones, said she was joining a crew. ”I told her no, absolutely not,” Ms. Barbour said. ”But she was 18, so what could I do?”

    On Nov. 15, Ms. Jones disappeared while selling subscriptions at a Pilot Truck Stop in North Little Rock, Ark. Ms. Jones was found 11 days later, stabbed to death, in a ditch near Route 61 in southwestern Memphis.

    Up at 7 a.m., typical crews start the day with a sales meeting where they rehearse their pitches. ”We’re selling magazines to earn points in a contest to win a trip abroad” is the standard and sometimes fictitious spiel. Around 9 a.m., the crews pile into vans to be dropped off at the day’s territory. They switch neighborhoods every several hours and often work as late as 10 p.m.

    ”You work hard during the day, but you also party pretty hard at night,” said Stephanie Blake, 23, who wrote an e-mail message in November to Earlene Williams at Parent Watch because she said she wanted to tell the positive side of the work.

    While she and others used methamphetamine, Ms. Blake said it was mostly marijuana, alcohol and sex that filled the nights.

    ”But there is a lot more to crew than that,” she said, recounting having made some of her best friends, including her fiancé, working on the crew. Coming from Evansville, Ind., Ms. Blake said she relished the chance to see the country. The expense-paid trips to Walt Disney World in Orlando, Fla., and a resort in Mexico were more fun than she had ever imagined having, she said. ”I still miss it sometimes,” she added.

    About a half hour into the conversation, however, Ms. Blake’s tone began to shift. ”I have to admit, some things did get to me about crew life,” she said.

    The 100 sit-ups and pushups for every number a seller was below her daily quota felt ”cultish,” she said. The beatings were also unsettling. But the most galling part, Ms. Blake said, was the unfulfilled promise of big money.

    When she and her fiancé finally decided to leave their crew in December 2003, Ms. Blake said, they sneaked away late one night from the motel near Houston where they staying. Asked why she left without demanding to be paid what was still ”on the books,” she said, ”These aren’t the types who you just go up to and ask to settle up.”

    Michael Simpson is one reason.

    For two years starting in February 2004, Mr. Simpson, a stocky former high school lacrosse player from Newburgh, N.Y., worked on several crews as an ”enforcer.” His job, he said, was to beat crew members upon a manager’s request.

    If sellers missed quota regularly or complained about the job, Mr. Simpson, 23, said he hit them while in their room or when they were alone in the van. On more than 30 occasions, he estimated, he and several other enforcers drew blood. In three instances, ambulances were called, he said. Dealing with the police was not a problem.

    ”You have one kid saying he was jumped and 20 others plus two managers saying he stole something or broke into a room and assaulted a girl,” Mr. Simpson said. ”Who do you think the cops are going to believe?”

    Daivet McClinton, 23, an enforcer who worked with Mr. Simpson, said talking in front of others about wanting to quit invited the worst beatings.

    Asked if they ever went overboard, both men recalled an incident in November 2005 involving an 18-year-old recruit from Dayton, Ohio, named Rudy. ”All we were told was that Rudy had shoved and disrespected the manager,” Mr. Simpson said.

    For 10 uninterrupted minutes in a motel stairwell in San Francisco, Mr. Simpson, Mr. McClinton and four other enforcers beat Rudy unconscious, Mr. Simpson and Mr. McClinton said. One held his mouth shut. Two others pinned down his arms and legs. Tearing off his shirt, they pressed a flaming lighter into his back. Mr. Simpson kicked him in the face and body. ”I stopped because I ran out of breath,” Mr. Simpson said.

    Rudy, they said, was taken away in an ambulance.

    Darting a glance at his new girlfriend and his chin quivering momentarily, Mr. Simpson explained why he decided to leave last February. ”I’d gone from being a kid who was afraid of hitting people in the face to someone who was using objects,” he said.

    Still, some current crew members said the work had helped them turn their lives around.

    ”I was in and out of juvenile facilities, and now I’m actually going somewhere,” said Jordan Friedley, standing in a shopping mall in Oceanside, Calif., near San Diego, where, for two days, a reporter shadowed two crews, Magnificent Sales and Thoroughbreds, both from Alliance Service Company. ”They keep things on the up and up, no drugs or none of that, and I bring in $700 a week.”

    Asked about incidents in the last five years involving the two crews, including two fatal drug overdoses and the deaths of two crew members in the crash of a crew van, Mr. Friedley fell silent.

    Crystal Hall, who helps manage the crews, said: ”We’ve cleaned things up. Everyone is drug-tested now. They show up dirty, they’re gone. Those who stay have plenty of chance to make money.”

    The Money ‘Flows Up’

    Since pay is purely on commission, Mr. Smith, the association lawyer, said that only the best sellers survived and that about 20 percent of recruits left in less than a month.

    Matt Ward, a former bookkeeper for several crews, said there were other reasons for the high attrition. ”Money in this industry flows up,” Mr. Ward said. ”It doesn’t trickle down.”

    For about two years starting in 1998, Mr. Ward did bookkeeping for several crews with American Community Services, a company with several hundred sellers that is based in Indiana. It is owned by two of Mr. Ward’s brothers, LeVan and Albert Ellis, who declined to answer questions both over the telephone and sent by certified mail.

    Mr. Ward said that while the company should be commended for sticking to its strict antiviolence policies, he left in 2000 after becoming uncomfortable with what he saw while he was keeping the books.

    ”The sales agents remain almost always in the red while the managers, car handlers and everyone else is in the black almost from the start,” Mr. Ward said between shifts at a restaurant in downtown Washington, where he now waits tables.

    Of the more than 400 sales agents whose accounts Mr. Ward said he handled, he estimated that fewer than 40 left the company having made money. The rest spent their earnings on the road or, more often, to cover their daily deductions for room expenses, gas and meals.

    This is not a new criticism. In 1987, during the Congressional investigation of the industry, the Senate committee reviewed the records of one company and found that of its 418 sellers, 413 had finished the year in debt to the company, even though the company itself had reported large annual profits.

    Ms. Williams, from Parent Watch, said her organization advised customers not to buy from the sellers or to let them in the house, but to offer them a phone to call home or her organization’s phone number to help anyone who might want to arrange a bus ticket home. She said her organization had lobbied for legislation to prevent sellers from being categorized as independent contractors and to provide them with minimum wage and safety and health protections.

    ”Leave these kids off radar as they are now,” Ms. Williams said, ”and the abuses will continue.”

  15. lesbiansayswhat says:

    I can’t express how excited I am for the continuations that will have me avoiding work all summer.

  16. allstarecho says:

    Just goes to show that de-regulation isn’t always best. Remember AT&T and all the baby “Bells”? And Now AT&T owns Bellsouth again… One day my electricity will be powered by all the hot air these corporations put out!

  17. mantari says:

    I’m interested in the phone number bit.

  18. shini says:

    That reminds me of when I worked selling Kirby vacuums for a week… Just with more beatings.

  19. brianfairbanks says:

    The “fake phone number” I mentioned was obtained through the free beta service at grandcentral.com. It’s a great way to super-screen your calls; when you answer your phone when someone dials your grandcentral number, you will be prompted with a voice recording of their name and can choose whether to answer. This works great when you don’t recognize numbers and also to record important calls. Or harassing ones.

  20. brianfairbanks says:

    @shini: Now THAT I gotta hear, shini…

  21. Aetsen says:

    We have the same problem in Toronto.

    Gas and electricity “marketers” come to your door and pretend to be from the energy company.

    I just had a guy that came to my door today, say he was here to “secure my gas and hydro for the power company”. I just lied and said I’d already signed up. He asked to see my bill and I told him to get lost.

    I expect to go through the same thing tomorrow and for the rest of the summer.

  22. RogueSophist says:

    @ Ben Popken:

    Ben, Ben. The Gawker lawyers are going to give you a copyright spanking. The NY Times may have a liberal slant, but I assure you this is not the case when it comes to policing its intellectual property, or that of its contributors.

    And if someone mentions “fair use” I’m going to scream. Attribution can certainly have a mollifying effect, but the appropriation of an entire work, verbatim — even if it’s brilliant, on-topic, sort-of-free to access on the NY Times website, and for the good of the consumer — is an excellent way to find yourself on the wrong side of an infringement action.

    Just saying.

  23. formergr says:

    Uh, yeah, total copyright violation to post that entire NYT article.

  24. homerjay says:

    I always thought you could post an article as long as you gave appropriate credit.

  25. Wormfather says:

    @Kos: Yeah they even did a Law & Order on the topic.

  26. satoru says:

    This problem has been extremely prevalent in Canada as well with Direct Energy. There was substantial amounts of fraud going on with their salespeople.

    They would practically force their way into your home and then trick you into providing an old utility bill. This was under the premise that they could compare your current one and how you can save money. In reality all they wanted was your name and account number. Once they had that they just forged your signature later and put you on Direct Energy without your permission.

    This kind of fraud was taught to these sales people and even encouraged. Because the entire sales force is a gigantic Ponzi scheme, the company has virtually no control over how the sales people behave so things like this happen.

  27. nonethewiser says:

    “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. . . .”

    and the last thing I remember was the whiff of chloroform….

  28. wka says:

    Here is a free permalink to the NYTimes door-to-door magazine sales article.

    (To find this, I Googled for the standard URL of the artice (on http://www.nytimes.com, not select.nytimes.com) and appended “/partner/rssnyt” to it, as described here.)

  29. AlteredBeast (blaming the OP one article at a time.) says:

    In an attempt to save money, my mom had mentioned switching providers. Consumerist was my first thought. Can someone actually save money, with a legit company, doing this? What is the best way to go about it?

  30. Man, Consumerist is knocking it out of the park lately. Can’t wait to read more of this.

  31. satoru says:

    @AlteredBeast:
    Saving money is somewhat of a relative thing. But in my experience you almost never save money by going through a 3rd party with utilities.

    Another thing to watch out for are those ‘checks’ they send you for like $20. They appear to be free money. But in reality when you sign the check you essentially give acceptance to a contract. Usually at rates 2x for like 5 years.

  32. shini says:

    @brianfairbanks: I should make it clear… that article had far more beatings than my experience with Kirby. But what the hell, I feel like reminiscing.

    From what I have since learned, a lot of the training was basic cult crap. They act like everybody is family. You sing the Kirby song every morning – I am grateful to have forgotten it. You have your team building meeting and learn how awesome the company is as well as how to vacuum and shampoo the hell out of your mark’s carpet… And their bed. The Dust-mites in your mattress thing nailed everybody till they saw the price.

    Most of it was driving my co-workers around in my car on my gas after my manager got into a car accident on my second day. I was the only one with a car that was reliable and sat four with a trunk big enough for some of those huge vacuum boxes.

    My manager almost always lowballed the price right off the bat, all the way down to a grand, when I got someone who was interested in buying… Which was funny, because my commission didn’t start until the units were selling at $1200 or more. In a week of 12-14 hour days, I moved 3 units (at the lowest price my manager could bring himself to offer. That one stay at home dad really busted his balls.) and got a bonus for being first sale of the day once… Total check? $174.

    It wouldn’t have been so bad if I hadn’t have found out each unit cost my manager around $360 from his distributor.

    They dangled the idea that you could become a dealer with your own crew and make the real money if you just got out there and sold like hell. Then you could move up to be a distributor… Which, when I think of it like that, reminds me of crack dealers.

    I had a hard time quitting too, I felt awful about it. Then I’d look at that 174 dollar check and think of how much money they’d made from me and I didn’t feel so bad.

    I will say though, those were some nice vacuums. They seemed very well built and they were murder weapon heavy.

  33. Satellites says:

    I guess I’m in the reminiscing mood too…

    I used to work for one of those traveling magazine sales companies. Xtreme Marketing. My time there (only about 2 weeks) was pretty much exactly how that NYT article read.

    I was looking for some work other than retail, and I saw an ad in the newspaper that promised “big money” and the ability to travel with company money and work in a “Real World” type environment. What 19 year old wouldn’t like that? I know I sure did. So I went with my girlfriend to interview. The interview was held in a hotel room, and most of it was the interviewer telling us about how we would be marketing in upscale neighborhoods, and about all the celebrities he’d met. I was dazzled with thoughts of riding around the neighborhood in football players’ Ferraris and making lots of cash. They said to just call them when I wanted to start, and they would bring me to them.

    After thinking about it for two weeks (and also to give my 2 week notice to my current employer), I called them, and they bought a bus ticket from San Antonio, TX to Charlotte, NC – where they were at the moment. I arrived, filled out some paperwork, and started meeting the rest of the “team.” They were all super excited to be there, and everyone seemed like a family. I thought it was the most amazing job ever.

    The next day, our crew woke up at 7 AM to practice our pitch:
    “Hi, I’m entered in the National Cash Award program, and each magazine I sell earns me a point. The person with the most points wins either $25,000 or a trip – this year, it’s to the Caribbean! I’m almost in second place, and with your help, I can win!” Or some BS similar to that. The drivers, who claimed to have been sellers before, gave us tips on selling. ABC and whatnot. Then, we loaded up into the vans, and went to a restaurant to eat breakfast. At about 10AM, we were dropped off in neighborhoods, always at least 30 min. away from the town we were staying in. For my first day, I followed a seller around, learning how to pitch. Once I was out…it was totally different than the meeting. The seller would change his pitch every street. One house, he was a college student. The next, he was living on the other end of the neighborhood, in town for the week, and he thought he’d bring his contest info with him. We’d change neighborhoods 3 times daily, breaking for lunch, and then back to the hotel to sleep. It was three to a room, with the lowest seller on the floor. Every day, same story, different day. 7AM wake up, 8AM meeting, 10AM start selling, 8PM come home, report your sales, get your stipend.

    The carrot was being dangled in front of my eyes –the Manager / “owner.” He was about 28 or so, and looked like he’d been a thug or something similar for a long time. Now, he’s all decked out in Gucci, with a Rolex, and drives a BMW. In the beginning, I was full of enchantment and wonder with the idea that anyone could make a ton of money with this business.

    We’d repeat our daily routine, selling from 10AM until 8AM – if you met your quota, you could take the day off (but hardly anyone met quota, or they met at 7:30). We’d move towns every 3 days or so. As time went on, the crew’s partying got harder, and harder…the drivers were even smoking pot and drinking while driving from Raleigh-Durham, NC to Washington, DC. Drug use was pretty rampant, what with the crew either smoking marijuana while out on their circuits or even doing bumps of coke in between houses. Police would stop us regularly for soliciting or selling without a license, and a couple of guys even had to go to court because of it.

    From reading the NYT article, I guess I was lucky that I never got beat up for being below quota. But…the circumstances for quitting were pretty extreme. One morning, a couple of crew memebers were purchasing some pot from a local crackhead, and he kept giving me a mean look, and asking if I was police. I didn’t think too much of it, and continued my day. When we came home, I went to buy some candy out of the hotel vending machine, and on my way back, that same crackhead had found a way into the building and jumped me. No one came out until the attack was over, and by then he ran off. I told the manager that I should be going home after that, and he told me to go immediately pack my things. I wasn’t to even talk to anyone on my way out. He dropped me off at the Greyhound station and gave me $20 for my troubles…which was all I ended up with. He even tried to guilt me out of leaving, and when I told him that my attacker was the same guy that the crew had tried to buy drugs from, he just shrugged it off and said, “I told them never to talk to locals…”

    All in all…pretty tame compared to the article, but all the things I was reading about how shady these magazine subscription sellers refreshed my memory, and were for the most part true for the crew I was on.

  34. BobbyMike says:

    Cutco is considered A Direct Sales company.

    Quixtar/Amway is considered a multi-level marketing company.

    Not all companies that are Direct Sales, or even Multi-level marketing are bad news. Without due diligence though, they can be rife with corruption.

    The companies that make the products are generally decent (in that they make decent products). Because they don’t actually hire people (they have consultants who “own” their businesses) they insulate themselves from the often shady practices some of the consultants practice.

    For example, Quixtar/Amway’s main money maker is a guy named Dexter Yager. Try googling his name for more info. He runs a business called InterNet Services Corporation that provides “Training” and “Business” materials and meetings for other consultants. Consultants that work with him are paid money on how many people they can bring to meetings and how many people they can get to buy into the training system. They chant the mantras, “Nothing worthwhile is free!” and “Invest in your business!” while overcharging people for materials and training (mostly motivational and posture related) on “How to build your business” and skimming their profits off the top.
    Most of the products sold are actually used by the consultants who are brainwashed into “Total household usage” by switching over all the brands in the house to the equivalent Quixtar/Amway product.