Crimes of Persuasion

Schemes, scams, frauds.



American Communications Network Inc - International business opportunity or MLM sales ACN scam?

There is an mlm business called the ACN company - American Communications Network Inc - that offers an income opportunity from working at home offering local phone service, voip telephone (online phone service / ip phone services) and long distance phone service to mlm leads which you generate using their network marketing tips.

But is it a work at home business opportunity showing you how to get rich or a multilevel marketing business ACN scam?

You are supposed to earn extra income in this network marketing business offering telephone services in competition with the major telecommunication carriers.

With lots of phone service providers out there as competition, just how good are your odds that you will you be creating wealth and instant income from this purported residual income opportunity?

Is it a marketing network scam or a legitimate work at home job from a viable network marketing company that is successfully competing with the major telephone service providers?

Like many network marketing companies you will be asked by ACN to make a list of network marketing leads including your friends and family for your homebased business opportunity mlm lead generation efforts.

I've heard of a products scam and even a companies scam but I can't begin to tell you whether this is an example of successful network marketing or a selling scam?

Local phone providers and cable phone service companies don't offer a network marketing system for earning extra income so could this be a success scam or a real direct sales opportunity?

American Communication Network could be the best network marketing company out there with an MLM compensation plan that makes it a high income business opportunity or an ACN scam MLM fraud.

To know for sure you have to do research on topics like communications scam, telecommunication provider, business opportunity scam and the ACN company name on ACN mlm watchdog blogs and mlm forums discussing ACN.

Do they offer MLM training material? Do they provide you with network marketing strategies to ensure your success? Or will you be an MLM survivor of a networking scam?

Multi level marketing scams often pretend to be residual income businesses. The distinction is whether they offer a viable product that can be effectively marketed for a profit. The key is to become educated on the company and the process. Keep reading and do your research.

BEWARE - The money dries up when the recruiting stops.

This site isn't about telephone service, Internet or utility deregulation. It's about one person's assessment of a specific MLM opportunity along with countering views.

The information is for illustration, and it

1.) applies population, statistics and math to one MLM,
2.) exposes a recruiting game and its odds of success,
3.) shows that Customers are merely tokens for the MLM to access recruiting money.

scam: fraudulent or deceptive business scheme. To swindle.
fraudulent: deceitful
swindle: to cheat or defraud of money or property

You've been introduced to a recruiter minion1 and this character will tell you anything. The minion's duty is to bring you into a recruiting session to meet the boss with all the knowledge, the Closer.
(Most of the characters in that meeting are working from a script.)

They promise great wealth in Residual Income from a huge customer base.
They say it's a retirement program.
It will cost you dollars to make mere pennies per customer.
NONSENSE !

Powerpoint Users, click below to select their silly brainwashing material:

Residual income - income from efforts which continue to generate revenue over time without requiring additional effort (for example, a stream of future royalties from a book).

Usually secured by copyright, patent or proprietary license. ACN doesn't inform you they have absolutely nothing proprietary and they are only a reseller. They don't inform you that deregulated utilities require constant marketing efforts because of competition by those that actually own or produce the product.

Employee Rebuttal:

On fixed line phone, ACN is a federally licensed utility. They are a phone company just like QWEST or MCI. They have customer service in-house. On cellular, we operate just like the local cellular store in your neighborhood. Reselling for all major carriers. On VideoPhone, we do have a proprietary network and phone that no one else has today.

If ACN has enjoyed such huge success for so many years, why then are they unheard of, except in those closed backroom meetings and MLM circles?
- "A serious question to answer, and may save you from the scam."

05/08 - Since I naturally want to provide a balanced and fair discussion on this wonderful opportunity I'd like for you to visit their website which explains why the opinions and facts posted here are apparently wrong.

The Difference between ACN MLM and a Pyramid Scheme

acnintegrity.com/nopyramidscheme.html)

A Regional Vice-President from California emailed and says he was partially responsible for the eventual shutdown of a website called ratbags which contained similar allegedly erroneous information about the ACN company.

He says he attempted to provide logic and truth, but once that failed, the legal system stepped in and the website was forced to print full retractions for a period and eventually then shutdown.

He would like to provide me with the truth since he is an MBA and can prove all the numbers. That would be great. He is with www.team-titan.com/us/ and myfutureisnow.com RVP International which I assume is a marketing arm or his downline structure of ACN.

Some other company sites include acninc.com acnaustralia.com.au acninc.net acncanada.ca acnsat.org acnmobile.com acnmobile.no acnmobile.de acnmobile.nl acn.co.nz acneuro

He has provided me with the following current compensation chart.

The person who originally compiled and evaluated his assessment of the opportunity stands by his conviction that even errors of 5:1 in the presentation can't make up for the lacking population to provide all the millionaires they claim.

He feels that their numbers don't support all those riches, new plan or old, and that it doesn't matter if they are selling lawn cutting or long distance service plans, they rely on selling the opportunity, NOT the service.

It seems that after a review ACN has changed the Personal Commissions and Level Breakdown. They have spread the personal commissions out to 10 steps now (it used to be 7), with the most predominant reduced from what was 2% payout down to 1% payout. This makes the site examples require twice the population to reach the stated goal.

The examples posted here were apparently already using the most liberal payouts and the most conservative estimates, for the stated plan. He says that there could be some tables changed to make things right for the perfectionist, but it doesn't change the outcome.

He also figures that until the ACN network pays respectable commissions, meaning double digits, they can't overcome the fundamental marketing issues of population, closing rate and market share. He provides the following example.

First he suggests that verify the chart below. Go to the original site link.
Scroll near the end of the page to see "Share of Communications Wallet"

(Percentage of total consumer dollars spent with each provider on Communications services)

Share of Communications Wallet
Verizon Wireless 9 0
Cingular Wireless** 9 0
Comcast 9 1
Verizon 8 0
SBC 7 0
Sprint* 5 1
DirecTV 5 0
Time Warner 5 1
BellSouth 4 0
Dish Network 3 0
T-Mobile 3 0
Cox 3 0
AT&T 2 0
Charter 2 0
Qwest 2 0
ALLTEL Wireless 2 0
AOL 1 0
MCI 1 0
Other 21 -1

Regardless of who is selling services to ACN, (it may be Qwest, Charter or the "other") the ACN company posted their market share as 2% on one of their mailings in 2006. This really sets the stage.

Here is a quick lesson in the ACN scam overview. We'll take the best of all figures and even inflate or boost some just to make a point.

We'll use 5% for market share rather than 2%
We'll use 10% MAX payout and skip all the silly charts and tables.

City of San Diego, for example, has a population of 1.1 million. Here we'll use 5% market share, so the available people in the San Diego pool for the ACN scam recruits is actually only 55,000. Do you see this, 55,000. (Other phone service suppliers are actual competition with a fair amount of clout.)

Now assume all of those 55,000 people are spending $75 per month average on their current service plan. That comes to $4.125 million.

ACN sales commission payout at the very best with the latest and greatest plan is 10% regardless of your title or position.

So now all of a sudden we have a tenth of those millions or $412,500 dollars in the pot to share among all the ACN people in that area. That's amounts to a maximum total of forty-eight $100K annual salaries from service residual income.

You must also consider the closing rate. Here I am giving the benefit of the doubt, and saying that is 100%.

Given the market share, when you start calculating quantities you must divide the ideal numbers by 0.02 to get the actual numbers. This is shown below.

When asked why the figures only go to 5 levels I point out that each level of the pyramid is the top of another pyramid, meaning that guy must do the same thing, and all the guys in his down line must do the same thing. I went only to 5 levels because the population ran out long before.

So is it an ACN scam? Absolutely not. They and their lawyers and their advisory boards of retired judges insist it's not even if others disagree.

Even Donald Trump gives it a ringing endorsement.

But is it possible to make the money they promise, let alone recoup the money it costs just to join the opportunity to sell a highly commoditized service in a highly competitive market? Read all the material provided here and on their sites and make that decision yourself.

The California VP MBA sees it as more of an investment, one where you determine your rate of return based on income generated against your entry fee.

An annual return of 6% is a very common benchmark used to gauge an investments' success.

In other words, if you simply returned 6% on a $500 investment annually you would earn $30 and it would be considered an adequate return for investment purposes.

In ACN, you need to return a minimum of $149 plus $30 to have a 6% return on your investment.

Lets lay out a basic example of personal residual income.

Average home would have 2 cell phones, one satellite account, internet and a home or videophone. Let's assume this scenario as a simple example. Billing for the "average" home would be let's say $200 commissionable on those items. Meaning if the average person simply sold 8 people those household services, their annual return would be 6% on investment.

If they instead sold 50 households in their career, their monthly income would be $1,000 per month in residual income. Say a person did nothing more than acquire 1 customer a week for a year, with two weeks vacation. Return on investment annualized would now be 2,400%. Now there is some math for you!!!

The average door to door salesperson is expected to sell 8 to 10 accounts a day. And they are not paid residual income but instead hourly or 1 off commission for said effort. Which one is the scam? 1 customer a week for 1 year or 8 sales a day for 200 days a year for the same income?

These are not income claims or guarantees of success as I would never be presumptuous enough to assume some else's success or failure. It is a simple mathematical example of a way to earn a $1,000 income through sponsoring no one.

Sounds good, but I got lost at the beginning. If $30 is a 6% return on $500, what sort of investment in this opportunity requires $179 (149 + 30) to get the same return? $2983?

I'd have to invest that much just to get started? Help me understand.

The difference between the two examples is personal residual income versus team residual income. Much like the difference between a real estate agent income versus a real estate broker income.

Personal residual income is paid up to 10% on customers you personally acquire. So a person desiring to get nothing but customers can make a substantial income and never needs to introduce a single person into their downline. That person can make a six figure income with less than 500 personal customers.

Overriding residual income is paid up to 8% on the sales of your team. Like a broker gets paid on an agents sales. These sales need to be more numerous to produce the same income and require only a few sales. Most people make most of their income in this arrangement.

Everyone makes personal residual income at some level even with just one customer. Not everyone makes downline income, it just depends on what they choose to work.

The VP says that the best source of information he has found in one accumulated place for accurate statistical information on MLM is firstclassmlm.com

Here is where he debunks the population arguments. firstclassmlm.com/2007/12/07/what-is-a-trillion

Here is what he considers a great comparison between legitimate mlm and scams. firstclassmlm.com/2007/12/07/pyramid-schemes-and-scams

"The overwhelming majority of people who come into the network fall by the wayside. What's more, the company knows in advance that they're going to fail. It's a matter of statistics. It's part of the plan."

"98% will drop out immediately" — Scams & Frauds Exposed

Will YOU be the 1 in 50 that hangs in there?
Or the 1 in 1,000 that makes some money in MLM?

The ACN scam recruiter wlll take $499 from ANYONE. There is no aptitude test or qualification criteria. They never turn away a prospect and they tell everyone they can be successful.

Does ACN work?

Rick's ACN scam story in 2006



Cap'n Arbyte
Into the ACN Scam

False Profits

10 Lies of MLM
(2 Mb PDF)

Black Book of Scams


ACN Energy Not for California Announcement

F T C complaint form

MLM Survivor


Must Visit Scams Exposed

Australian Communications Network  Goes to Court

Case Won Against ACN Scam 

More Multi-Level Mischief
 

Residual income builder or ACN scam pyramid scheme graph?

THE MONEY - proposed revenue

Customer Commissions

 

The table (Pyramid) to the right illustrates customer billing and bonuses paid from 7 levels in your downline. A customer bill of $30 returns 60-cents, but after a 30-day bill followed by a 30-day payment cycle.

This is the Residual Income.

Recruiting

The "Reps at $499" column shows the Rep enrollment fee totalling $254,000 which is more than commissions for the entire year.
This is Bonus money, and is distributed when that new Rep is qualified.
This is NOT Residual Income. When you sign your quota of customers, the Customer Acquisition Bonus is paid before any new customer ever uses the phone.

The IDEAL Pyramid
5 64 1,280 $38,400 1/4% $96 $30
6 128 2,560 $76,800 1% $768 $18
7 256 5,120 $153,600 6% $9,216 $12

MLM Secrets or MLM ACN Scams?

Totally wrong says the company. Here's the current ACN compensation numbers they stand by.

1

4

80

$2,400

0.25%

$6

$5,136

2

8

160

$4,800

0.25%

$12

$1,296

5

64

1,280

$38,400

3.00%

$1,152

$24

6

128

2,560

$76,800

5.00%

$3,840

$12

7

256

5,120

$153,600

8.00%

$12,288

$6

THE ACN SCAM ENROLLMENT FEE - Paid by New Recruits

This money is the life blood of the system. This comes from new Reps, NOT from commissions.

The enrollment fee of $499 is divided among the up-line as bonuses. This money is cleverly disguised as a Customer Acquisition Bonus when that new Rep becomes qualified.

Qualifying releases bonus money to the up-line with no money collected from the new Customer.
Customers are acquired to permit distribution of recruiting bonuses.

A "Generational Customer Acquisition Bonus" increases with fewer Reps between you and the recruit.

The bonuses are only ever paid AFTER customers are acquired. Though they are not paid on commission, they ARE paid soley for the acquisition of good and viable customers. This a reward paid by the COMPANY for the effort put forth by the team. Just like a sales commission in the store. NEVER, is an enrollment fee “distributed” amongst an upline. A bonus is only ever achieved when customers are acquired, just like any sales agent in any sales job.

The website is attempting to take legitimate customer bonuses paid to hard working people who acquire customers and reclassify them as bonuses paid from a fee paid by the new rep. We never see any portion of any fee paid to do business.

ACN COMMISSIONS - From customer billing


This they call Residual Income - you believed this to
join the program. But it isn't quite like they promised.

Here's the math to calculate a $100K annual income at ACN:

Assume each customer has a $30/month long distance bill,
$30 x 12 months = $360 annual billing per customer
 
Direct Customer Commissions:
HYPE ALERT - shaded figures are not likely attainable.
Insist on documentation.
 

Take an example of 20 direct customers. Your Reps sell the dream.
You will have one Rep for every 20 customers.
With your direct billing at $600 your commission is 2%
Commissions are 1/4 of 1 percent (0.0025) on your downline's customers 5-levels down.
(That's 7½ cents per customer!)

Calculate the balance of customers required in the downline.
$100,000 - (20 x $360 x 0.02 = $144) = $99,856 income required from downline.
$99,856 ÷ 0.0025 (1/4 percent) = $39,942,400 annual billing.
$39,942,400 ÷ $360 = 110,951 downline customers
 

Rebuttal stance: Totally wrong numbers based on incorrect percentages.

$0 to $1,999 1 %
$2,000 to $2,999 2 %
$3,000 to $3,999 3 %
$4,000 to $4,999 4 %
$5,000 to $5,999 5 %
$6,000 to $6,999 6 %
$7,000 to $7,999 7 %
$8,000 to $8,999 8 %
$9,000 to $9,999 9 %
$10,000 + 10 %

Between Satellite, Cellular, VideoPhone and Internet, the average home would spend about $200. Meaning a person could make just 500 career sales at $200 per home and produce an income of $100,000 and never recruit a single person. You claim that 4,630 customers are necessary. BTW, don’t forget the $100,000 is a residual income, meaning you can spend your work week earning money other ways while you continue to collect your $100,000 residual check.
 

Test #2
Did the recruiting presentation emphasize the importance of signing up dealers?
Did the presenter show charts of exponential growth and geometric progression?
Did they show vast wealth in short time?
They talked more about wealth than product?

Did you answer YES to any of these?
Is this a futile effort?

To match a minimum wage job at Walmart, an ACN Rep needs about $13,000 per month in direct billings, or about $350,000 in billings from the downline.

At least Walmart has benefits!

Rebuttal stance: $13,000 in direct billing acquired once would yield a monthly personal income of $1,300 or $15,600 per year in income. This money will never be worked for again and continues for as long as the customer pays a bill.

Working at Walmart will continue until you die and never provide residual income. It’s beyond logic to link active working income to passive residual income. The website has a logic error in that to earn income in traditional employment requires continuing effort while residual income is income in perpetuity.

Put this in perspective.
You've seen the math, try it out.
The RVP that's showing off the new car, the new house & the vacations....
If those expenses are paid from service billings, then
Calculate the actual customers that he/she requires monthly.
Use a realistic closing rate and calculate how many individuals were approached to obtain those customers.
Are there enough prospects left to provide wealth for all those being entertained?

Hint: Long distance billing didn't pay for that car, that house or those vacations.

Those that make big money will make it from others that lost theirs while trying.

Not true, they say: Just a small team generates millions in bills a month. Far and away above any enrollment received by the company. An analysis of the bonuses shows that people acquiring customers are paid handsomely upfront for that work with a residual to follow behind for their effort. Money is NEVER made off some else….it’s impossible.

stacked pyramids of acn scam
Minions foolishly compare MLM to a corporate structure. Perhaps the "infinite downline" escapes them.
Every MLM is a pyramid, that's a fundamental reality. Every pyramid is not necessarily a scam or illegal. The Minions wish to convince the prospect that regular businesses and corporations are also pyramids. The regular business model, or non-MLM may appear as a single pyramid, and that's as far as it goes. MLM is a vertically growing stack of pyramids, and in theory may grow until population runs out. The reality is, however, that most will drop out of the deal, and another batch of prey will come along to keep the upper wealth flourishing. Not to be confused with vertical integration, each MLM pyramid is above or beneath another pyramid.

Admire all that theoretical money, but there's no climbing upward.
You can only build your downline and everyone in that room is your competition.

POPULATION AND YOUR NETWORK

True or False?

Given these truths, a 5,000 customer network must be replicated 250 times.

That's 1.25 Million customers so that every Rep (member) in your network can make $100K

With 2% market share......

Your personal $100K annual commission requires a population of 63 million.

To make $50K per year on 8% commission, you require 86,800 population

That's if the BEST you can make is 8% on a customer's phone bill.
$50K ÷ 0.08 = $625,000 required in LD Billing.... divide by $360 = 1,736 customers
If you have 2% market share 1,736 ÷ 0.02 = 86,800 population for that one income
United States population can support only 2,000 of these type salaries of $50K
What if you are only making 2% ? Answer: Don't even consider it

BEWARE If there really are millionaires, and they're selling this dream in hundreds of cities,
the money is coming from somewhere other than services rendered.

Answer below

How many people do you know that can or would promote your business?

One out of fifty? ...One out of a hundred? Let's use a figure of one in fifty (2%).

You've seen that $100K requires 1.25 Million customers... there's a Rep for every 20 or, 62,500 Reps.
62,500 ÷ 0.02 = 3.125 Million applicants must be screened to build your sales staff.

Not true at all they say: It takes just over 10,000 customers for the first person to be making $200k per year and a total of 15,000 customers for 2 people to be making $200k.

The average US household has 2.6 cell phones and at least 1 internet, satellite and fixed line account. So lets assume the average US home accounts for 5 customers each.

Lets assume 3 people per home and so there are 100 million homes or about 500 million potential customers. The total US market then would be $1.5 billion per month if the average bill is just $30.

With an overall payout of 24% that is a potential commission payout of $240 million of commission that could be paid in the US alone every month.

That means the annual payout could be $2.880 billion per year meaning the US phone market could support 288,000 people making $100k per year. A sum greater than all active reps in the entire company in the entire world.

Where might all that money come from? Simple. You ask everyone to enroll with $499

Let's say that 2% (more or less) may put their $499 in to join this business. Didn't you?

3 million X 0.02 X $499 = $30 Million... Fact: < 20% of those will work toward bonuses.

$30M X 0.80 = $24,000,000 to go around the club WOW! Let's recruit even more!

IF you qualify early enough, your enrollment is refunded, i.e. enroll $2,000 from Reps in 2-weeks, you're refunded that $499 enrollment. But here's a catch: IF everyone complies, the total of promised up-line bonuses exceeds the $499 enrollment fee. What makes up the shortage? Simple.

Most that join as a Rep are doing so merely for the promised residual income opportunity, and will not work toward their full bonuses. When they learn the magnitude of the challenge, most will walk away from their $499 and chalk it up to experience or foolishness.

The significant money going up-line in the MLM comes from new recruits that fail. The MLM is gambling. You are gambling.

The plan inherently requires that more Reps fail than succeed.... A zero-sum game.

They said: "Make your money by recruiting, and if you get a Customer, that's good too."

Not true they say: The company turnover in 2007 exceeded $600 million. If that turnover was solely recruiting, then 1.2 million people would have to have paid $499 last year alone. In 15 years, the company has less than 200k active reps around the world. Another logic and math error that is easily disproved.

Compare your effort to TV advertising by the "big" phone companies.
IF a single 30-second prime-time TV ad will reach 7.5-million viewers on an average airing, and
IF that ad costs 3-million dollars to produce and air 5-times: the cost for your competition to reach a potential customer or to reassure their existing customer is less than 10-cents each.

Your competition is speaking to each one of your customers every evening.

Long distance packages from SBC, Sprint, MCI, etc. are 500 minutes for $10 (2 ¢ per minute).
Many offer unlimited minutes for about $25/month.

ACN doesn't advertise. MLM sales staff charges Reps $499 for the privilege of promoting ACN. Reps actually pay to promote, they may then fall out while their customer may remain.

Today's typical long-distance consumer will switch providers every two years.

The customer commissions in this program are merely a cover for the MLM structure.

Beware those bogus claims.

References:
MLM Watch
Mind Control
International Cultic Studies Association (ICSA)

Selling dreams. That's almost the oldest profession. They play with your emotions and your hopes.

If it sounds too good to be true, guess what?

Lottery tickets have better odds.

Email AKA Minion Mail

We post email only from those requesting such. Some say the site has mistakes, and we gladly update when specific corrections are provided. Claims of income or of success have NOT been validated; believe at your own risk.

NOTE:We stopped trying to keep up with posting email. Be aware, many that wrote of the glory have since felt the pain of failure, and they just "chalk it up to experience," or they "gave it a shot." Those high in the pyramid thrive on the temporary enthusiasm they instill in the minions.

Those that failed want to forget, but it would be a great service to all if more would report their actual experience.

ACN scam complaints

Recent discussions of the ACN program can be found at "The ACN Scam" blog. More historical discussions on the ACN opportunity can be found at:

ACN Australian Communication Network versus Peter Bowditch.

ACN Scam.com discussions 2005

ACN Scam.com discussions 2006

ACN Scam.com discussions 2007-a

ACN Scam.com discussions 2007-b

ACN Scam.com discussions 2008

ACN Scam.com discussions 2008-b

ACN Scam.com discussions 2009

ACN Scam.com discussions 2009-b

ACN Scam.com discussions 2009-c


Editor's note: April 2008

The information posted here related to the ACN scam was taken with permission from another site in order to preserve its historical perspective. Comments from its original owner below.

I welcome new input from participants and rebuttals from company management. I personally admire the entrepreneurial spirit that is generated from Network Marketing operations. My own view is that recruits should not need to pay for the privilege of acquiring customers.

This Truth about ACN site is at least 6 years old, and the info has not been kept current. I am sure ACN makes little adjustments to their "compensation" program that I haven't shown on the site. The fundamental issues remain true and accurate, all the people they recruit cannot make what ACN recruiters promise.

I have received some pretty far out email from the hard-core ACNers, swearing they make boat loads of money. But it never goes beyond that.

So-called high ups in the chain have promised me they will turn it (me and my site I presume) over to their legal department, but it never happens.

There are scams and cons in every industry. There's no shortage of people that will take money for a lie or intentional misconception, and they just move on.

A few of us learn and are then able to spot the scammers. It is very entertaining, but sad, to see the passion these youngsters can show about the scam they are running, and they can't stand to be asked questions that topple their house of deceit.

http://arbyte.us/blog_archive/2005/04/ACN_Pyramid_Scam.html

Team Customer Acquisition Bonuses - TCABs are paid out to you ONLY if your new recruit becomes Qualified Team Trainer (QTT) within his/her first 30 days. A new TT can become a QTT by acquiring 2 or 3 new customers and earning 5 points or they can also become qualified by buying a few products for themselves.

ACN Reps HAVE to acquire new customers in order to make this a legit business structure and not a pyramid scheme. The fact that you have to qualify before 30 days is done so that your upline is compelled to help you qualify as it is in his/her best interest.