Crimes of Persuasion

Schemes, scams, frauds.

Historical discussions of the ACN opportunity from in 2005

Below you will find a fair use condensation of material from the forum. The views expressed are those of the original posters and not the editors or publishers of this site.

More detailed info can be found at ACN MLM networking business.

ACN Australian Communication Network versus Peter Bowditch.

ACN discussions 2006

ACN discussions 2007-a

ACN discussions 2007-b

ACN discussions 2008

ACN discussions 2008-b

ACN discussions 2009

ACN discussions 2009-b

ACN discussions 2009-c

02/05 - Regarding your comment that I have no idea what I’m talking about. Here are some bullet points off my resume:

- 20 plus years in global telecommunications.
- Past advisor and counsel to city, county, state and federal agencies on telecommunications.
- The largest telecom sale I counseled on was a 5 year, 750 M global deal.
- Formal education as a global telecom technician and engineer, inside and outside plant.
- My last telecom project was to assist in the build of an IP network in 107 countries overseas, you could count the USA as 108.
- I am well versed in telecom regulatory guidelines, evolution and standards on all global continents.
- I worked for the last 20 years in the Fortune 200, last position was Director level.
- I’ve brought phone services to humans living in remote locations in third world counties.
- I collect antique and vintage telephones as a hobby. I disassemble and reassemble them with one goal in mind, make them work on the public telephone networks of today.

I could go on but I think you get the point.

The word lease is thrown around far to easily if you’re a Reseller. A reseller is a company who buys a product or service off another company in bulk and resells on the open market. How does a reseller level the playing field, they say everybody leases, it happens everywhere.

Not necessarily true. The whole premise of a reseller is based off a lease so at the end of the day, I can see resellers throwing the term “ lease “ around without much thought or knowledge. I ask you one question, who are the resellers leasing services from? The answer is facility based companies like MCI, AT&T, Sprint, Qwest, SBC, etc…

You comment in your last posting that everybody leases and to a certain extent I will agree with you. The IXCs ( MCI – Sprint – AT&T ) have agreements with RBOCs ( Qwest – SBC – Verizon – etc… ) to originate and terminate voice traffic. This is not done on a lease, its done on a pre-arranged agreement that is measured and billed in connect minutes.

The IXCs do go the RBOCs to reach their off network customers, this connection locally is called the local loop. Local loop costs are all pre-determined in contracts and legal agreements and are almost always based off of distance measured in miles and/or V and H coordinates. The RBOCs on the other hand sometimes have to go the IXCs if their connectivity demands go outside the geographic range.

This connection is called the IOC ( Inter Office Channel ) and again, it is based off a pre-determined metric found in contracts between telecoms. Telecoms also use these pre-arranged agreements to extend the reach of their networks outside their geographic operating territory, these are called high caps ( high capacity circuits ).

High caps usually come in DS3 or higher transmission speeds. That’s how the big boys operate and without inter connect agreements, the industry would not thrive. Look at the global telecom marketplace and interconnect agreements are vital to a telecoms success overseas. We’ll stick to the USA for now.

In summary, the large facility based companies rely on each other to reach their customers. As a result, a portion of their business is reliant on interconnect agreements. To refer to an interconnect agreement as a lease is not a factual statement, the two are completely different.

Back to resellers, their entire enterprise is based off one giant lease. They have no control of the facilities, the network, the product and services pricing, and the employees who maintain, operate and manage these vast telecom enterprises.

I’ve witnessed resellers going out of business when their contracts with the IXCs and RBOCs have expired. The reason was the supplier ( IXC – RBOC ) raised the rate a fraction of a cent and next thing you know, the reseller can no longer be profitable and its adios amigos.

Now a fraction of a cent may not seem like much but when you’re a reseller paying a bill based off a hundred million minutes a month, it hits the bottom line real fast.

I also wanted to respond to your comment regarding ACN growing at 49% a year. What metric are they measuring? Traditional telecom companies measure growth in network capacity, network reach and new revenue.

After speaking with some MLMers selling telecom, I understand this may be measured in independent reps added to the accounts receivable ledger in accounting. I had one MLMer tell me they were the fastest growing telecom company in the world, this was based off the new independent reps added.

My response was a comparison in another industry, power generation. You could go buy light bulbs and extension cords at the dollar store and resell them door to door. If I started as a one person enterprise and added 1 rep every month for the next 10 years, I could call myself the fastest growing power generation company in the world for the past 10 years!

On the surface my savvy marketing verbiage could put me on par with the GE’s of the world but, we would all know the metrics used are not valid when measuring company growth in any market, anywhere in the world.

Are these resellers legitimate? Again, you have to ask yourself is a company who buys a utility in bulk and resells it via an army of independent contractors legitimate? YOU DECIDE.

When you have problems will the reseller come out to fix the problem? NO. Will resellers discount customer care of the large established telecoms? YES, it’s spin that is used in an attempt to level the playing field.

Will resellers throw around the word lease as if it’s a four letter word in the industry? YES, again it’s spin that is used in an attempt to level the playing field. Are resellers telecom and/or utility companies as they represent themselves in the marketplace? NO, a reseller is a reseller period.

Is it commonplace for resellers and MLMers to restate facts in order to grow their networks and build their customer base? YES, that is why I respond to their outlandish claims made in this and other forums. Would I buy dial tone, long distance, VOIP, gas, power, cell phones or bubble gum from a reseller, never in my life.

Now I’m not picking on ACN or MLMers as your last posting suggests. It is also not a goal of mine to ruin anybody’s dream. I do feel compelled to respond to the outrageous claims made by resellers and MLMers as it relates to telecom.

As such, my motivation is to educate and where possible, act as an enabler. I don’t look at our dialogue in this forum to be argument as your last posting suggests. I look at it as enlightening dialogue from many different individuals across a diverse educational and cultural landscape. I look forward to the postings and feedback from everybody. If I hurt your feelings and/or hit a sensitive spot, I apologize as that is not my intent.

02/05 - For bundling, call the local sales office for MCI, AT&T, Sprint, Verizon, SBC, Bell South, Qwest and, Level 3. Ask if you order multiple services, could they bundle them and bill them on one invoice and offer discounts and/or promotions.

To take this to the next level, RBOCs ( Regional Bell Operating Companies ) are undertaking a national project to put fiber in every customer premise. Once this broadband connection is established, hold on to your hat as the RBOCs will start offering entertainment services. This is already up and running and working in key test markets.

Since MLM companies resell services, they are the last to adopt new services and marketing tactics such as bundling. Its not that I'm singling out MLMs here, that’s just the way life is my friend. MLMs do not own the facilities, the personnel that run maintain and manage these facilities, or set industry benchmarks for market pricing. They buy in bulk at a pre negotiated price and resell on the open market.

As long as the MLM company has an aggressive rate from its facility based supplier, IRs to hustle minutes, and they're signing up new IR's, they will remain fat and happy as long as they can control their dept and maintain positive cash flow.

02/05 - I wanted to reply to your quotes, “ Frankly the argument of whether the company buys the services at bulk from another provider or owns the network is a non issue with Customers. ” “ Customers are concerned mainly on price ”

Your first quote is an issue if your phone service, which is a utility, is important to you as a consumer. The better educated the consumer is as it relates to when and how the product is delivered makes a huge difference. Yes, customers are concerned with reliability. Again, if a consumer knew how many times their utility was sold and resold, it would likely influence their decision to buy. Factor in the MLM element, most of your colleagues will say anything to make a sale. 95% of all claims made by MLMers in the telecom arena are not only false, they are outrageous.

Imagine if the average consumer knew they were being misled and lied to by the salesperson, would they buy a utility from that person? To say service is not an issue and consumers don’t care where their products and services come from is MLM spin period.

When you buy a car do you care about service? Will you buy the cheapest used car or a reliable used car? To summarize, it’s all in how the product is represented to the consumer, if it’s backed with hype, spin and grossly misleading statements, its just plain wrong.

Your comparison to Virgin is not valid in this case. There is not a single MLM telecom company on the planet ( or the universe ) that has the brand name recognition and quality of Virgin. You can’t make a factual comparison as you are not in the same league.

Now that wont stop an MLMer from trying to level the playing field with hype, spin and misleading comparisons, but that’s just the fact of your business. Since you have no brand, no publicly accessible balance sheets and your own network and service, your default is hype, spin and misleading statements.

If you’re going to defend a statement whereas it makes sense for an MLM company to not have trucks, think about what you are saying. It’s like somebody defending Amway because they don’t have trucks. I’ll leave this alone as I could really go off on a Dennis Miller tirade, but I want to get to my other responses.

MLM companies will never provide on site service, they will refer you to a toll free number and pass the trouble on to the provider of the service ( e.g. the RBOC or IXC ). The only time you see an MLMer in your grill is when they are selling snake oil, or wanting to bring you in on the ground floor of a new and exciting opportunity to own your own business.

Regarding your comment about MLM expansion overseas. Anywhere there is a gullible society you will find an MLMer. Why are there no more MLMers in the Amazon River basin? They were all killed off by the locals. If you try to BS a native, you lose your head!

I won’t back off as long as I actually enjoy interacting with you and your fellow MLMers. If I educate one MLMer, and they in turn educate 10 others, and the 10 others educate 10 more, and those others.... You get he point.

02/05- - ACN-

Owners and/or Executives:
Gregory Provenzano, President
Anthony Cupisz, Vice President
Michael Cupisz, Vice President
Robert Stevanovski, Co-Founder/Chairman
JD Sullivan also listed

Approximately 600 employees

03/05 - Is ACN legit?
You could say both yes and no. Before you come unglued, take a xanex. ACN as a reseller is a legitimately run business enterprise. The legitimacy is quickly lost as a result of the contractor ( ACN speak for independent representative ) and their claims as it relates to the business. A vast majority of the claims made are false, mis-leading and dishonest.

Since there is no oversight of these MLM enterprises ( only the FCC and they are too busy and sometimes misguided ), there is no system of checks and balances looking out for the consumer.

As a consumer if you were buying a car, groceries, power to light your house, water, medical care, dial tone, long distance cell phones, or just looking for a baby sitter and 90% of what you were given by the sales representative selling the product were lies, would you consider that legitimate?

If you were married and cheating on your wife would you say you had a legitimate marriage. Technically you could argue that you were married but the lies and deceitfulness would tell another story. Any individual and/or business that defaults to lying and where such behavior is tolerated and in some cases is part of training, is not legitimate.

Selling ACN and calling it a business.

You get a 1099, you are a contractor. As an independent contractor you may call it a business but you are not. Now I’m sure you like talking over all the dinner you buy your friends sharing with them just how great your business is but like your sales pitches, your comments are inaccurate. A 1099, is a 1099 is a 1099. I don’t make these rules, the IRS does.

03/05 - Let me see if I got this right, This is what I have learned ACN is a reseller of utilities. They purchase the services from the utilitiy through a negotiated contract with the utilities company, like Qwest, at a wholesale price regulated by the UTC of Washington. ACN marks up the wholesale utility/service and resells it through a Multi Layer Marketing network (MLM).

ACN boasts competitive rates and that they can sell you the phone service cheaper then Qwest. In order to do this they mark up on wholesale retail are very slim. In My opinion ACN is gambling that they can create enough hype and “opportunity” for people to continue to pay the $499 fee as this is where the real money is and not in the fraction of a cent mark up on the utilities.

It is not illegal to resell a utility in fact it has been going on for a long time, This is not a new concept and ACN did not invent this concept. You can visit Qwest’s website to see a list of resellers and how it works.

It is illegal for ACN to require an investment of $499 obtain the right to recruit others into the program and when the emphasis changes from selling phone services to building a network recruiting recruits that are recruiting other people to recruit people to sell the phone services. This is where I believe ACN is crossed that fine line between MLM’s and illegal Pyramids.

The ACCC alleged that ACN and Gibbshade ltd. Participated in, promoted and induced or attempted to induce persons to take part in a pyramid scheme in contravention of section 65AAC of the trace practices Act 1974, and that Mr. Paech, and CAN director, Mr. Janke, Mr. Gibbs and Ms. Schade were knowingly concerned in and/or aided and abetted those contraventions.

The focus of the ACCC’s proceedings is the ACN’s marketing system. Independent Representatives pay ACN $548 including (GST) and sell those services to consumers. Independent Representatives also have the right to recruit other Independent Representatives. Those Independent Representatives can receive commissions from their personal customers as well as commissions from customers of Independent Representatives they have recruited. In addition, Customer Acquisition Bonuses are paid on the number of qualified Independent representatives.”
The Federal Court Trial is scheduled in the week beginning February 21, 2005.

03/05 - “The Competition Bureau alleges that ACN Canada, as it is known, and its participants, through its web sites and at public meetings, recruited new participants by exaggerating income expectations without disclosing the income of a typical participant.

Under the Competition Act, it is illegal to make reference to earnings in a multi-level marketing plan without disclosing a typical participant's income. In addition, operators of a multi-level marketing plan must ensure that any income representation made by a participant in the plan includes disclosure of a typical participant's income.

Furthermore, ACN Canada was charged with operating an illegal scheme of pyramid selling by offering recruitment bonuses to participants who paid for the right to recruit other participants.”

03/05 - ACN Reps are not employees but self employed agents.

03/05 - Bob Stephen - Former Attorney General for the state of Kansas
Former past president of the National Association of Attorney
Former Judge 13 years

Chris Gorman - Former Attorney General for the state of Kentucky
Expert in the direct selling industry

Grant Woods - Former Attorney General for the state of Arizona
Expert in consumer affairs

Press Release
January 31, 2005
TeliaSonera Finland and ACN Communications Finland enter into agreement on co-operation

TeliaSonera Finland Oyj, its subsidiary Tele Finland Oy and ACN Communications Finland Oy have concluded a co-operation agreement.

According to the agreement, ACN Communications Finland discontinues its own branded mobile service and starts marketing Tele Finland’s mobile service offering through its existing sales channel – Independent Representatives.

ACN’s Finnish customers can continue as customers of Tele Finland Oy. ACN’s assets, personnel, agreements or other business operations are not assigned to Tele Finland by the agreement.

Multi-level Marketing Firm Charged for Misleading Participants

OTTAWA, August 29, 2002 – The Competition Bureau announced today that eight charges were laid in Halifax, N.S., against All Communications Network of Canada Co./ACN, Reseau De Toutes Communications Du Canada C.R.I., under the Competition Act's deceptive marketing practices provisions. The company, whose registered corporate office is in Halifax, operates a multi-level marketing plan which promotes and sells long-distance telecommunication services.

The Competition Bureau alleges that ACN Canada, as it is known, and its participants, through its web sites and at public meetings, recruited new participants by exaggerating income expectations without disclosing the income of a typical participant.

Under the Competition Act, it is illegal to make reference to earnings in a multi-level marketing plan without disclosing a typical participant's income. In addition, operators of a multi-level marketing plan must ensure that any income representation made by a participant in the plan includes disclosure of a typical participant's income.

Furthermore, ACN Canada was charged with operating an illegal scheme of pyramid selling by offering recruitment bonuses to participants who paid for the right to recruit other participants.

"We are committed to ensuring that Canadian consumers are protected from deceptive recruitment practices by multi-level marketing companies," said Raymond Pierce, Deputy Commissioner of the Bureau's Fair Business Practices Branch. "We will continue to thoroughly investigate such cases in our continued efforts to provide Canadians with a marketplace that is both fair and free of deceptive business practices."

03/23/05 - ACCC wins in telco pyramid selling case

The Australian Competition and Consumer Commission (ACCC) has moved closer to stopping a new American player on the Australian telecommunications scene by successfully proving it is a pyramid selling scheme.

The Federal Court in Adelaide will now look at stopping Australian Communications Network (ACN) from establishing phone services around the country.

Executives from the United States travelled to Australia early last year to help set up ACN, a wholly owned subsidiary of American Communications Network.

ACN was planning to offer line connections, local, national and international calls, as well as mobile calls.

Its multi-level marketing structure sparked concern from the ACCC, which took action in the Federal Court.

Today Justice Brad Selway ruled the set up for ACN was a pyramid selling scheme and breached the Trade Practices Act.

He adjourned the case to hear submission about what orders he should make against ACN.

EDITOR'S NOTE: On October 25, 2005 in subsequent developments on this story, the Full Federal Court ruled on appeal that the scheme implemented by ACN and its managing director Martin Paech was not a pyramid selling scheme. On June 2, 2006 the High Court rejected an appeal by the ACCC for special leave to appeal against the Full Federal Court's ruling. Subsequent developments in this story were overlooked.


Here are some resources for you to check out:

Qwest Agent program …
Verizon …
XO …
AT&T …

I know SBC has a program but I couldn’t find it easily on their web site. Compensation is paid on your monthly revenue run rate. All Telco companies run back office post sales functions while you work on sales and customer relationships.

There is no way in HELL an MLM company could match the compensation plan not to mention the portfolio of services. This type of telecom resale is legitimate! As an agent of any of these companies, you could walk into any business customer in the USA and be competitive out of the blocks. MLMs just don’t have the portfolio nor the steam to compete against agents.

04/05 - ACN Remuneration

It is mainly through residuals (% of monthly bills). ACN can operate without the Registration fees. The important income for a Rep is the residuals, not the short term Customer bonuses.

04/05 - A quote from Judge Selway in his summary

t. There is no evidence in this case that ACN cannot operate viably in the telecommunications market. There is no suggestion that its marketing strategies are a sham or that its financial projections cannot be realised.

Another quote from the Judge

The ACCC did not dispute that the business operated by ACN was viable and competitive.

The judges statements on the Registration fee - $499.00 (plus GST)

The question of whether such schemes are, in reality, pyramid selling schemes or merely multi-level trading arrangements will ultimately depend upon the extent to which the relevant price of those goods and services bears a ‘reasonable relationship’ to their value.

In my view they would not be considered reasonable. In my view a reasonable person acting commercially and having regard to relevant risks and uncertainties would not pay $499 (or even $499 plus GST) for these various ‘services’. Plainly some ‘up front’ payment by participants might be considered reasonable.

The extent to which it is too high involves a matter of judgment and degree. On the evidence before me I think that a participation payment of any more than $200 plus GCT would not bear a reasonable relationship to the value of the ‘services’. Certainly I do not think that a payment of $499 plus GST bears such a relationship.

Another comment by the Judge on the size of the Registration fee

44 Given the matters to which regard may be had under s 65AAE of the Act the situation might be different if the participation payment was $200, but it is not

- It must be noted most MLM's charge a Registration fee to cover admin costs of the new Rep joining.
- In the Judges summary he believes $499.00 is higher that it should be for Australian business


Prior to the Judge releasing his final decision ACN has reduced its registration fee to $200.00 plus GST. ACN has been and is still charging around $499.00 in the other countries for Registering a new Rep

ACN in Australia is not under threat of closure, and is trading strongly, having nearly 30,000 Customers in the first 8 weeks of trading.

April 19, 2005

Contact: Michael Shore, MEDC
(517) 335-4590

Telecomm Company ACN to Expand Farmington Hills HQ, Add 848 New Jobs
State Tax Credit Leads to $32 Million Investment

Governor Jennifer M. Granholm announced today that American Communications Network (ACN) plans to invest $32 million over the next 10 years to expand its headquarters operations, creating 848 new jobs, including 575 directly by the company.

The global communications company will investigate a suitable site in Farmington Hills instead of locating the expansion at a competing site out of state as a result of assistance offered through the Michigan Economic Development Corporation (MEDC).

"It is great news when a global company like ACN has outgrown its space and needs more room to prosper," Granholm said. "The company's decision to find another, larger location in Farmington Hills is a testament to Michigan's business climate and the quality of southeast Michigan's workforce."

The MEDC approved a Single Business Tax credit valued at more than $6.3 million to win the project. The City of Farmington Hills Economic Development Corporation approved a grant valued at more than $16,000 to provide software training for the new employees.

The ACN expansion is among five economic development projects the Governor announced today. In all, they are expected to create and retain a total of 4,111 Michigan jobs, including 2,517 directly by company expansions and redevelopments.

"ACN is very fortunate to be in a state that demonstrates its support for a growing business like ours, values strong companies and has a high-quality workforce," stated ACN CEO Charles Barker. "Great opportunities are provided for the people of this state."

A University of Michigan economic analysis estimates that 273 indirect Michigan jobs will be created as a result of increased economic activity associated with the expansion, in addition to the 575 jobs created directly by the company. The project is expected to generate more than $321 million in personal income for Michigan workers over the life of the tax credit.

ACN launched in 1993 and is now a leader in the global communications industry. The company markets and provides telecommunications products including local and long distance telephone, Internet DSL and wireless services in 18 countries. Headquartered in Farmington Hills, the company currently employs approximately 500 workers in Michigan.

"These hundreds of jobs would have gone to another state if not for the incentive package we created in cooperation with the city," MEDC President and CEO Don Jakeway said. "ACN's renewed investment will strengthen the company's future presence here while securing good jobs in the entire region."

In her 2005 State of the State address, Granholm emphasized the importance of making Michigan a global economic powerhouse in the 21st century. Since January 2005 the Governor and the MEDC have announced the creation or retention of more than 35,697 jobs as a result of targeted assistance provided by the MEDC.

The Michigan Economic Development Corporation, a partnership between the state and local communities, promotes smart economic growth by developing strategies and providing services to create and retain good jobs and a high quality of life.

American Communications Network Inc.
Economic Analysis
Summary Estimates
(All estimates in 2005 dollars)

Direct 575
Indirect 273
Revenue Foregone $6,371,000
Revenue Gain $24,731,000
Average Wage $649/week
Personal Income Generated Over
Life of the Tax Credit Agreement $321,176,000

04/05 - There is no endorsement of ACN in the following statement:

"Governor Jennifer M. Granholm announced today that American Communications Network (ACN) plans to invest $32 million over the next 10 years..."

This is an announcement, not an endorsement.

As for the MEDC, they will do all they can to keep jobs in a state that has been ravaged in the past 10 years. No other state in the union as been hit as hard as Michigan as it relates to lost jobs. I have worked with MEDC in the past on various projects; they provide Significant Value to the State of Michigan and its residents.

I assure you, the MEDC is not running around Michigan endorsing ACN. Their job is to keep business in the state and while attracting others.

04/05 - There's no question that motivated people deserve a chance to get ahead. That isn't the point made in my posting. The 'teaching' claims to sort the rotten apples and not waste time with them. But there is a contradiction of that teaching within every ACN Rep. Prospects are made to believe that for a mere $499 they too, can succeed just like the dude on the stage.

There has never been a Rep turn someone away, if that someone has the $499. There will be major jumping up and down over this post, we can watch for all kinds of MLM hissy fits.

Fact is that 60% of the population has no business joining ACN or any MLM, simply because they can not, and will not make any return. There are many, many legitimate tests that screen personality traits for proper job placement. There is no one in ACN that has the credentials to retrain any individual from what they may be doing now, to be any more successful in ACN. ACN teaches how to call every relative and friend (soon to be ex) to hit them up for long distance. ACN's mission is NOT to help society with job placement. We know the mission.

If you compare the statistics of MLM failures, meaning, those that join vs those that quit, you can quickly see there's something wrong, and also you readily see what fuels the ******* for the rest of the machine.

Any legitimate company board of directors would be horrified with the new-hire failure rate typical of MLM, and specifically ACN.

Avoid emotional decisions. That doesn't mean that you should not join ACN or any other company. It just means you should do it for business reasons. It is not nearly as easy as they say. The process is simple, but NEVER easy, and most people have no business getting involved. However, much of the money made by the high dollar earners depends on people failing. ACN is primarily a recruiting scheme, not a service providing scheme.

04/05 - First things first---I want to take time to introduce myself. I am a 23 year old male from the Eastcoast who just recently after a year of actively working ACN with some of the top TC's and RVP's have decided it was best for me and the people I have sucked into ACN to discontinue our participation.

Although my purpose of this thread is not to bash or support ACN, I will share my personal experiences on what I have seen and experienced in my year as a IR of ACN.

During the first quarter of lastyear (04') I was approached at work by a gentleman who was coming into my work to find out some information about the service we offered. By the end of our appointment, he walked out with a membership, and I had a meeting I had agreed to attend later that night at a nearby hotel.

That very night I walked into a hotel with over 100 people who were all dressed in suits and briefcases by their sides with earpieces in their ears as though they were on their cellphones constantly.

During this income opportunity meeting I was amazed that the very same individual I had spoken to eairler was now standing in front of over 100 people talking about this incredible opportunity on how they could capitalize off of deregulation and help change their lives. Along with this individual I saw Greg P. (Pres. of ACN) and Larry Raskin (V.P of NA Sales) also speak. I was told that I came on the "perfect night".

After the short 45 minute presentation, with many of questions still not answered, blindly going on my emotions I "jumped into that nice water" they all talk about, and I didn't worry about the $499 "investment" because in this business you are told "you earn as you learn".

This 45 minute presentation "just made sense to me", I didnt feel that I had to think logically for once in my life. Getting paid on everytime someone turns on a light, or everytime the dialtone is still sounding. WHAT A NO BRAINER RIGHT?? HA! After this BOM (Business Opportunity Meeting) we all hung out at the hotel bar to sit down and talk with some of the already exsisting reps.

I got swamped that night with reps coming up to me saying "congrads its so awesome you teamed up with us tonight". I must say...that night I felt like a million bucks.

My first month was so exciting. I didn't know what I was doing. All I was told was to be "coachable". So, coachable I was! My upline told me to make a list of everybody I knew. Once this was done I was told to "PIQUE & PASS" For those of you who don't know it's all about hype edification.

I would call up a friend (warm market) of mine and be completly estatic about this new incredible opportunity I wanted them to take advantage of. When they said "well what is it", I was instructed to PASS it off to my upline who I would then call on 3-way.

I'd say "Well Cindy, I really couldn't do this opportunity any justice what so ever, but let me you have you speak to my business partner ________, he is the Donald Trump of ACN. He's young, a great family guy, but more importantly he loves helping other people become successful through this incredible opportunity."

With all of this edification the prospect has no reason not to believe what I am saying, and no reason not to TRUST what I'm telling them about this person. The first month I got in I got 12 new reps in, which put me on the top 5 ETT list for my team within ACN. Everyone was looking at me like I was the next superstar in ACN. They saw my upline who was a consistant Top 25 TC in the company globally turning me into a "young superstar".

By my second month I had duplicated my upline so much that they had me present different pieces of the opportunity at the big BOM meetings. I was 22 years old, dressed in very nice suits (that I had before I got into the company) and was always clean cut on top of my game presenting an opportunity on how these people who 90 percent of them were older than me on how they too could change their lives and make money.

Never putting much thought or time into looking at the real numbers, I finallu took sometime around the 3rd month to figure out why these "residual checks" weren't coming in. Some of you may ask "well why didn't you sit down for alittle and look at all of the numbers."

My only answer is that I had trust in my upline and everyone else and what I saw in the presentation that I would keep doing what I was doing. I was going to PBR's with my upline 6 nights a week. I finally had enough balls to ask my upline "what is going on with these residuals Im supposed to be getting?

I had asked before numerous times but he'd always quickly respond. "Stop worrying, don't you see how fast your team is growing. All you need to do is focus on your recruiting you've got plenty of personal customers, just keep recruiting that's where your money will be". By the 2nd month I had entered the "inner circle of leaders".

I was constantly on the phone with other top TC's and a couple of RVP's. I growingly become cautious once I began hanging out more and more. I constantly started hearing others brag about how many new CREDIT CARD numbers they got at their PBR's or BOM's, instead of how many new business partners they had gotten who they wanted to help become successful.

When I first got involved with ACN I was told how great it was because you never have to feel like a high pressure sales person and you would let people make their own decisions. Well, now I found it awkward how I was constantly being told to never leave a presentation without getting the persons credit card numbers. ABC- ALWAYS BE CLOSING.

These were top TC's and RVP's telling me to get these CC numbers. I thought the beauty of this business was that you didn't have to feel as though you were all after peoples money. It wasn't making sense to me that they were telling me to focus more on recruiting and less on customer acquistion.

Instead of seeing these prospects as individuals with dreams we were basically pushed to look for the 16 numbers on that plastic card.

By my 7th month I had seen ALOT of people come and go. INCLUDING TC's. I was on pace to hit the TC position in less than 180 days from the day I had started, and I constantly had people coming up to me saying "I know that TC date is near".

However, as you will find, many more people fail not because they fail themseleves but rather because NUMBERS SLOW DOWN and DO RUN DRY. Even leaders will admit it. Of course not to new people.

Something that ACN began doing lastyear was now they show your earnings under "MY ACN". I decided to do something that I normally would not do. While speaking with one of my front-line reps (who is also my bestfriend) we said we should ask my upline to see an earnings statement.

Not disrespectingly but for the simple fact that we can see proof of his real earnings. Well, I had my uplines ID number and password from the first week I had gotten in. He had given it to me the second day I got in to look around the website while I was waiting on my ID number. He claimed at meetings and in personal conversations that he was earning well over 150,000 a year. As a TOP 25 TC (constantly in the top 15) I had no reason not to believe him, and for the fact that he was my close business partner and now friend why should I not believe him! RIGHT?!? I decided to take matter into my own hands.

I wouldn't confront him about it, I decided since it wouldnt hurt either of us I would check his 2004 earnings statements in his "MY ACN". What I found wasn't disappointing or funny, it was very disturbing.

He didn't make over 150,000 in 2004...he didn't make over 100,000...he just cleared 50,000. With not even 3% coming from TRUE RESIDUAL INCOME. This was the final nail I needed in the coffin. I decided to hang my gloves up and take a step in the right direction. I didn't renew my ACN slot, and I informed my downline (who were still somewhat active) what I had found and experienced through the last months.

In the beginning of 2005 ACN laid out a new compensation plan which they call the "excuseless compensation plan". To put it simple this plan laid out alittle more cash on the recruitment side of the table, and 90 percent of ACN's Reps person commissions in half from 2% to 1 %.

I know coming from someone who was on the verge of hitting TC and who became VERY close with alot of the top leaders this may sound like a kick in the balls. But I am only here to help.

As a matter of fact, I have to thank ACN. I met some genuine people who were out there for the same reason as I was. To improve our lives. I saw alot of good people come and go. I saw some people who were doing illegal things go. I met some people who I thought were honest and genuine, who turned out not to be. It gave me great practice on speaking in front of large crowds which is priceless only experience can do that.

In the beginning when I was a "baby" to ACN it gave me an undescrible feeling of worth. As I said this was not to bash or support ACN. It was simply to open some eyes. I once used to be one of those people who would come on here and read this thread when I was in ACN and shake my head about how people would bad mouth ACN.

Now I'm on the otherside however my intentions aren't to bad mouth it. But just to tell facts and experiences. I used to look at a website everyday describing how the residual income really wasnt there and I would shake my head not wanting to believe it.

If you want to say I was dumb---fine. If you want to say I was foolish---fine. If you want to say I was brainwashed---I agree. The most important thing I learned from this experience was that I had the strength and ability to walk away from something I knew was not right.

I've got something back that no money could ever beat. My friendships, and my life back. I will be more than happy to help anyone or answer any questions! God Bless

The fee to join is spread among the new recruit's upline. The new customers that the new agent must sign on to release those bonuses have "zero" chance of generating enough revenue to pay those bonus payments.

Even if one considers only the gross revenue generated by those customers, it isn't enough. Any intelligent businessperson knows that those bonuses must be from the net profit generated by the new customers for that model to make any sense.

The money collected from the new rep is used to pay the upline. That being the case, it is glaringly apparent that there is a tremendous amount of need, and subsequently pressure, to recruit if one expects to make any money whatsoever.

04/05 - savabuck

I have two main issues with ACN and all of the other telecom mlms that pay up front recruiting bonuses. The first issue is that the bonuses are substantially funded by the new recruits.

The biggest problem is that most of these new people do not really understand what is happening when they write the check. I would feel much better if there was a more detailed explanation that when they write the check (and get a couple of customers) they are releasing bonus payments to their upline that just happen to total about the same amount of money as the check they just wrote.

I know that all the dedicated reps and the company will deny that there is any direct connection. If that is so, then why are bonuses NOT paid to the upline if that same rep merely comes in at the alterative, smaller refundable fee? Anyone care to tackle that? (and please, no talk about how a company can do business any way they choose).

The other big issue is that the entire system really only rewards recruiting, not the sale of the product. The product is secondary. In fact, long distance related products for resale are easy to acquire, and they are cheap. ACN resells long distance.

No problem with that. But the product itself is merely the vehicle for the recruiting side of things. A company must have a product, otherwise this would amount to nothing more than a illegal pyramid scheme.

Those are my issues. It really is too bad that we have no way of knowing how much money is generated through emotion rather than common sense.

05/05 - I don't know if you realize, but ACN changed their comp plan. You no longer get any recruiting bonuses until you hit the position of ETT, or is that what you meant? and actually there is an explanation of what the $499 goes to pay on

It doesn't technically go to the upline, it goes to pay the customer service reps, rep service reps, and other people that help ACN run. Although the comp plan DOES work out so that $430 goes to the upline IF the new rep gets QUALIFIED (but ONLY if the rep gets qualified).

As for ACN only rewarding recruiting.. well sure.. at first... what do you suggest they do? People want up-front money.. if they don't get it, they quit. Is ACN supposed to give everyone $100 every time they get a customer? They'd be bankrupt in a year, maybe less. So since you know so much, what would your alternative to recruiting bonuses be?

The whole point, as I understood it, was to build a huge customer base so you could get some residual and then quit recruiting (although you WILL take a pay cut if you quit recruiting.. I understand that) but say I got in and wanted to make $1000 a month residually.

I CAN build my residual up to $1000 a month and quit, but I probably wouldn't stick around long enough to do that if I wasn't making ANY money in the process. The recruiting bonuses are in place as a means of up-front money while you are building long-term residual.

05/05 - Also, no one has bothered to approach the subject of upline bonuses being paid from sign up fees. I am 100% positive that ACN will say they do not do it(if they do it, many AG would like to speak with them). However, it is very difficult to overlook the fact that the upline bonuses are not paid if the new recruit doesn't pay the fee.

05/05 - The public does have a bad perception of mlm, much of it well deserved. Let's face it, many people will walk across the street to avoid their neighbor who can't seem to find the "off" switch regarding their mlm company of the week. I happen to think the general perception is accurate.

05/05 - My only point, from the beginning of my participation in this thread, is to merely confirm the fact that hardly anyone who joins a company like ACN (or any of the Excel copycats) will ever make any money.

When I say "make money", I mean make a profit. I have never disputed the suposition that there are reps in a company like ACN who make a lot of money. However, I cringe when I think of all of the unqualified people who write checks because they give in to their emotions.

The skilled mlm'ers who are paraded in front of the crowd are not average, not even above average. They possess skills that, despite the dog and pony presentation, cannot be learned.

The main reason they are there is to write a check, because the people making the money absolutely depend on those checks to sustain their income.

10/05 - MLMs fail (and they do so on a regular basis) because they are an inefficient distribution system selling uneeded or overpriced products to people. The real money in MLM is trying to sell the scheme, not the product.

10/05 - In the MLM world in order for 1% to fabulously succeed 98% MUST FAIL.

The top less than 1% of an MLM do not make their money from product sales they make it from the members below them in the pyramid scheme.

In order for them to make the big money the ones lower down the food chain have to lose it. It is fairly simple mathematics. Referred to as a zero sum game.