Consumerist Undercover At IDT Energy: The Confession

After only three days with Midtown Promotions, I could already tell that I’d wait weeks, maybe months or a full year before coming upon hard evidence of fraud, if I found any evidence at all. After leaving James and Doreen in the Bronx, I took the afternoon off and went to work on these diaries.

This is part 7 of our undercover investigation into IDT Energy, an energy reseller in the New York area…


While I transcribed all the recordings, ads I’d put out looking for information on Midtown and their business practices were beginning to circulate and attract attention. My first and only solid lead was borne out of the response by a guy I’ll call “Vega.” Vega claimed to have firsthand knowledge of the shady practices of Midtown Promotions, but he refused to go into any detail without meeting in person. His schedule sounded strange— he appeared to be either unemployed or rich, since he said he didn’t need to be out working if he didn’t feel like it.

We met at a pizza parlor in Ft. Greene, Brooklyn. I’ll refrain from details about his appearance and say only that he was wearing a T-shirt that said “Bronx” on it. He carried nothing with him, his ex-girlfriend having smashed up his PDA the night before. He seemed vulnerable because of this, but not afraid.

He told me that he had worked for Midtown in the past, and gave me some dates (which matched with his earlier statements.) He seemed pretty open to whatever I wanted to know, and had lots to say about Midtown’s relationship with IDT.

“I did that. I did IDT for a while. [Midtown] will bring in marketing people, they teach you what to say, how to do it, when to do it. You go out to the territory; you go where you gotta go to get the money.” He went on, covering mainly what I’d already learned. “They make you an independent contractor, they make you sign the forms. They tell you do what you gotta do.”

“Did they say that? ‘Do what you gotta do to make the sale?'”

He said that they are reminded repeatedly to follow the manager’s instructions, but many are so desperate to make a sale, they don’t care.

“So, did you see people wearing the uniforms?”

He answered in the affirmative, and mentioned having seen people in Con Ed hats and other outerwear.

“When you saw people in Con Ed stuff, where were they? Were they in the office of Midtown Promotions? Did they arrive there dressed like that?”

“No, nobody.”

“So how do you know they were doing it?”

“Well, basically, once you get in the field, it’s different.” Vega stopped for a moment then backtracked. He started to explain how few of his co-workers were educated and wise in the ways of ethics and marketing. “They think everything they should do is for the dollar, that it doesn’t matter what their company tells ’em, that it’s what the individual does that counts. So, when the individual goes out in a Con Ed hat, the company just says, ‘Well, we didn’t train them that way.'”

I told him that I’d been with IDT for a week and that I didn’t notice anything immorally deceptive, other than questionable pitches. “When you were out there,” I asked, “You were just dressed professionally, with your tie, whatever. Where did other people put on their stuff? Was it on the subway…?”

“When you work with somebody else, sometimes they’d just throw on a shirt.” He speculated that the workers had found or had made their own Con Ed patches and put them on some cheap blue work shirts that made them look like they were utility employees. “Or they’d go buy something that said Con Edison on it.” But he said he wasn’t positive how the fraudsters came about the gear, only that he certainly saw multiple employees in the field in the finished getup.

“Did anybody ever talk about it, in the office?” I mentioned several employees’ names to see if it would jar any memories of wrongdoing by higher-ups.

“No, they always talked about it every day, about how we weren’t supposed to do that. They could tell you in the office… but once you leave, you’re an independent contractor…”

I tried a different angle. Did he know anyone specifically who knew about the fake (or real) Con Ed uniforms or wore them personally?

Unfortunately, he claimed he couldn’t remember any specific names of employees who had committed fraud. Perhaps he was afraid of something at this point. He seemed to clam up for the first time in that half hour. I wondered if he was feeling protective of Midtown all of a sudden.

Look, he said, “I know there’s gotta be a certain reason you’re going after [Midtown], but they’re a legitimate company. The only thing is… the representatives, some of them, are no good. They need to hire people who can really do the jobs and pay them a little more. But IDT is not going to pay them [enough].”

Finally, I asked, “Definitively… have you seen people you know are employees of Midtown Promotions, wearing Con Ed uniforms?”

“Sometimes. Yes.”

I went to the office to confront my manager.

E: So, what’s up, buddy?
B: So, Eric, I wanted to talk to you in private…
E: Yeah. You disappeared…
B: Well, there’s a couple reasons why. I was sick on Friday, that is true. But… the one thing I’d like to ask you about… there are people working here that are doing things that are obviously… fraudulent.
E: Meaning…?
B: They are wearing Con Ed attire.
E: Con Ed attire?
B: Yes.
E: What’re you talking about?
B: Well, actually, I’m a journalist—

His eyes bulged, but he immediately recovered and took this in slowly.

E: Uh huh.
B: And I’ve been investigating this for a long time now… and we’ve received tips that it was this company… and I met with someone who used to work here and he was willing to speak on the record, and I have a recording that…
E: …wearing Con Ed attire?
B: They were wearing actual shirts with the words Con Edison on them.
E: Do you have… someone in here now?
B: He doesn’t know, he doesn’t work here anymore, so he isn’t sure if those people are still working here… He said that they would leave here and that they would acquire a grey or whatever color Con Ed shirts are… and then they would have a patch made based on the logo.
E: And why would that not be brought to my attention from [before]…? Because I know that they’ve got their grey shirts that say IDT, the IDT laminate, the IDT card. Never heard about Con Ed, never got any complaints, never heard anything of that nature.
B: So, all this stuff about ‘don’t misrepresent yourself as Con Ed,’ that’s just from your own fears that someone will do something like this?
E: Well, when you deal with different reps, unfortunately, with different locations, you have 60, 70 reps out there… I’d love to be able to see that people do things by the book, but… when you do have complaints that come through the human resource department, you get rid of that person. You understand? People going out, using the Con Ed, Keyspan name to get a sale, that’s totally wrong.
B: Would you be in trouble if IDT received complaints about employees here?
E: If I found out that that person had a Con Ed shirt on, I’d get rid of them in a heartbeat.
B: No, I mean, would Midtown be in trouble with them—
E: I don’t understand what you’re saying…
B: What I mean is: If someone were to get in trouble and IDT were to receive complaints, do they come down on you guys?
E: They’d call us to look into the matter… one hundred percent… because they contract us to do their marketing for them… to a hundred percent. If we have a fraudulent rep out there, we’re not going to just [let them] keep going out there and signing applications. That’s misleading, that’s totally contradictory to everything IDT stands for. When you have two or three locations out there, and you have locations that aren’t affiliated with us that are here in the city that represent for IDT, too, that we have no control over…
B: Okay. So, just to be clear, you’ve never heard of this… with the shirt?
E: No.
[I tell him there are articles in the Consumerist alluding to the fact that this company at this location has sent those scammers out in the field. I also mentioned that the scammers, except for the part where they replace their affiliation with the name “Con Ed,” is almost the word-for-word pitch of Midtown reps. He said that if anybody used the Con Ed or Keyspan name to identify themselves, they would be immediately terminated. “If say to say,” he added, “On my side, I haven’t had too many issues” with employees bending or breaking the rules.]

E: …I have nothing to do with what the [Midtown] offices outside of [this one] do… I have no control over that. They’re independent offices… but as far as our side is concerned, we rarely hear about someone coming across as misrepresenting themselves. But when we find out about it, because they’re independent and, a lot of times, they could be out there saying the wrong, doing the wrong things… I’m not gonna deny that… but it only comes back to us if someone complains to IDT…

DS-Max

Eric denied that Midtown is owned by DS-Max. He knew of DS-Max, having worked there for 16 or 17 years, but he claims that they are independent entities.

E: That’s a big company… Nothing wrong with it… they do an unbelievable job [with] the concepts that they do. But we’re independent, so we got nothing to do with them. I know they’re in the city as well, I know they’re in Long Island…
B: Do you think it’s possible that they, because, the pitches are very similar, that it’s possible that it’s not Midtown, that it’s a DS-Max affiliate that has an IDT contract?
E: No, I think they’re also independent, too. I don’t think DS-Max is involved with IDT at all.

He deflected some more criticism by saying Topline, out of Queens, also dos the same work for IDT.

E: Did you find any beef…?
B: The guy who used to work here— he was out with people who put on the shirt. He saw this while he was here…
E: How long ago was this?
B: …about three months ago when I saw it… and I don’t want to give too much detail that might reveal who he is, but it was sometime in the last two to six months that he left [Midtown.]
E: …Well, we like to say that everything goes well out in the field until you bring something like this to my attention… we want to make sure there’s no other guys doing that. Maybe it was a guy in the past, and there was a complaint [about something unrelated] and we had to let him go, and we never found out about the t-shirt. …Maybe it’s from another location.
B: The people that he saw were from this location.
E: Unfortunately, I can’t have anything to say about that… I can’t vouch for that, I’ve never heard of it…. I mean, I let guys go on two warnings on using [the name] Con Ed. What do you think I’d do about the t-shirt? And I pray to God that none of these guys here are affiliated with that t-shirt.
B: It’s possible those people are gone…
E: [Bad] things that happen, you gotta let ’em go. Because if you don’t, it makes your business look bad. I think if it was really that bad, the commission would’ve shut us down a long time ago. They send guys like you in, checking it out… you know, I’ve got nothing to hide… honestly, I know about the Consumerist, I know about the [intern] that came in, I had a feeling you were with them, I’m not playing games anymore. I’m just putting it out in the open. The more we hide games, the more you guys wanna run with things. [Could be a slipup or just a poor choice of words… but interesting nonetheless.] And you got in here firsthand, and you saw they aren’t… switching the badges or whatever… I wish I had a camera on all these guys, making sure they’re doing all the right things…

And later…

E: I’ve seen the pictures, I’ve seen [the intern’s] write-up… and all honesty, as a business grows… expands… it’s like anything… you’re gonna have some people that are gonna do some wrong things in the field… you can’t make everybody happy. As long as at the end of the day, we have people out there doing the right thing, I can go to sleep good… It’s usually the newer guys,” he said, echoing the same point Vega made, “that aren’t as educated… as up-and-running with the program.”

Eric went on to admit that he’d worked for “shady direct sales companies” in the past, but wouldn’t name them. It is worth noting the following three things: he mentioned that he worked for DS-Max for either 16 or 17 years, claims to have a total of 16 or 17 years in sales, and that Vega does not remember him working there from just a few short months ago.

After the recorder was off, Eric described attacks on his business practices as being similar to attacks on journalists, trying to put it into perspective. “It’s like if someone sued a reporter for defamation. That would suck.” I wasn’t clear what he meant, but I could tell what he was getting at, whether he was conscious of his deeper meaning or not.

Before I left Midtown, I went on Eric’s computer to show him some of the other articles about IDT on the Consumerist’s site. Sure enough, as I began typing c-o-n in the browser, consumerist.com immediately came up. It was also in the top ten most recently visited sites in his browser. He claimed not to have checked the site “in three, four months.”

The truth is: guilty or not, Midtown Promotions is a shady bunch of shysters. Guilty or not, they’re guilty of creating an atmosphere.

Eric would say I have no evidence linking Midtown to those guys in the Con Ed uniforms. Carl would say that must be some other company, and wash his hands of the whole thing. James would say I was harping on the negative.

But what I see is not just a systematic problem. I see a company called DS-Max that manipulates its employees, practices unsavory business methods, and makes sure everyone is obedient, for if they were to leave, they would be in debt and possibly homeless. I see devoted employees leaving such a company, and not seeing anything worth changing. I see them start Midtown Promotions, DS-Max in everything but name. Sure, we could’ve skipped the in-the-field work and just approached them with Vega’s statements, but the real evidence backing up Vega is what I saw: the brainwashing, the unsupervised workers, the overlong days and weeks, the desperation to make just one more sale, and so forth.

Then I see IDT Energy, a rejoicing bunch of corporate opportunists based out of the magical Newark, New Jersey, hearing the news that Con Ed has been deregulated, and deciding to hire an unknown company called Midtown Promotions (or Figueroa Marketing, depending on whether or not you read the plaque on Eric’s wall or the directory outside the office door.) I see IDT Energy, hearing of complaints from outlets such as the Consumerist and its readers. I see them, completely oblivious to complaints about the fraudulent activities of its affiliated sales people, not even (it seems) deeming it worthy of mention to Eric or anyone else at Midtown.

Midtown Promotions, incredulous that someone would take things too far when they are already pushed to the breaking point, that the sell is so desperately driven home that the seller, too, becomes desperate. Midtown Promotions, unfazed by their own role in the event that their charges, when left to their own devices, cross the line.

Midtown Promotions, sure that it wasn’t their location on West 30th that sent those disgraceful, misguided, and potentially forgivable bastards out into the field without enough pep talk about fraud to stop their wicked ways.

Midtown Promotions, DS Max, Eric, owner Chris Polke, or the whole system, may be ignorant of the goings-on, but they are guilty just the same.

I watched as James got more aggressive with each door-knock, with each hour that went by without huge sales, wondering if he would end up out in the field with a guy who brought along an extra phony Con Ed uniform, if he’d be the guy in the blue shirt who one day knocks on your door with great news… —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

(Photo: Getty)

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