In case you missed any of 7-part undercover report on IDT-Energy, Midtown Promotions, and the fabulous worlds of energy resale and multi-level-marketing, here’s a recap:
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.
From the moment I met up with James, and Doreen, who was going our way, things began to fall apart. Eric told me to follow James, not Carl, who was going solo. I was to listen to James’ instructions, follow his example, and go to wherever he decided we should spend the day. Today was Mt. Vernon, NY, almost 90 minutes from the offices of Midtown Promotions.
If you’re just now tuning in, we’ve been doling out daily pieces of our multi-part investigation into IDT-Energy. They’re an energy reseller in the New York area and we’ve received multiple complaints about their salesperson’s dressing as ConEd workers and doing other funny stuff at the door to get people to sign over. So we sent in Brian Fairbanks undercover to get hired at Midtown Promotions, a direct-sales marketing company IDT-Energy contracted to get subscribers.
Before the morning meeting started, I left my man-purse on a set of boxes right by the blackboard, with the microphone discreetly poking out of the pocket.
This is almost everything you need know about DS-MAX (now known as Innovage), the super-shady multi-level-marketing group whose business practices seems to have inspired the Midtown Promotions office we’re looking into. It’s culled from an excellent post over at DS-MAX: The Aftermath:
The NY Post ran a good article looking into whether the savings promised by door-to-door energy resale reps like IDT Energy ever really materialize for subscribers:
“I’ve had complaints from residents, as well as small businesses, who have unwittingly switched to a different energy provider and seen their bills go through the roof,” said City Councilman John Liu (D-Queens).
One Carroll Gardens, Brooklyn, IDT customer – a bartender who gave her name as Carmel – said her electric bill jumped from $40 to $70, and she is anxious to cancel.
While scanning the collateral Brian picked up in his investigation, we nearly choked on this gem buried in their terms and conditions: it says that you’ll get 7% savings for the first two months, but after that, there’s no telling whether your bill will be higher or lower than what it would be with ConEd (click to enlarge image).
I sat in the offices of Midtown Promotions, watching the receptionist field calls from job prospects, still surprised at having been one of those callers not even twenty-four hours prior.
You too can work for an energy supplier and seize a piece of this exciting money-making opportunity! At least, that’s what the Craigslist ad told us.
You may know well the great promise of Network Marketing.
We love the part where they say the amount of money you can make from this depends on,
The timing of entry of the networker into the company growth curve.
aka, it’s better to be at the top of the Ponzi scheme. For the uninitiated, network marketing is just another name for multi-level-marketing (MLM), structurally similar to a pyramid scheme, except usually there’s an actual product being sold. Employees get money for selling products, and for signing up new recruits. A cut of your commission flows up to the guy who signed you up, and you get a cut of your recruits’ commissions, and so on up the pyramid. The FTC ruled that MLM isn’t illegal per se. Often they’re set up so the people on the very bottom don’t make much, or even end up losing, money. Amway is a famous example.
Ramit has a neat post on how Network Marketing and Multi-Level Marketing (MLM) are nothing more than a pyramid scheme in a cheap suit.
“Help me, Obi-Wan Consumerist. You’re my only hope.”