This email arrived from William in California:
I am a martial arts instructor- I own my dojo and have 150 families that train with me. I have made it my life’s work to not only teach kids the art of karate, but critical thinking too (and I leave out all the woo of chi). I am constantly disappointed by my organization though, because it seems every year, they want to get all the owners on board with the latest and greatest thing, usually sold by some form of a MLM (Mulit-level Marketing).
Yesterday, I had to sit through (for the second time) a presentation by ACN, which my organization assured me was NOT a get rich quick scheme and NOT a Mulit-level Marketing Scheme. They also said I would NOT be a middle man. I was not surprised, though, when the pretty and slick sales girl handed me a flier, covered in pyramids, middle men, and information about how I could get rich quick. All for a upfront investment of $499. Needless to say, I did not fall for it, but several of the other dojo owners have already drunk the cool-aid. How do people not see through this? How is the FTC not involved, or are they immune because they offer a product and service contracts?
ACN is the American Communications Network. Just like all MLM’s or Pyramid Schemes, their primary streams of revenue come not from selling goods or services, but rather from recruiting more salespeople. There are tons of accounts and anecdotes to be found online about people’s experiences with ACN. This is one of my favorites.
I have been in the martial arts for about 3 years, lately as an instructor, and I have seen MLM’s like these in action. Having attended a few martial arts business-related conferences and seminars, I can tell you that MLM’s are welcome in the martial arts community, but probably no more so than other similar sized businesses. I have not heard of any efforts by the martial arts industry to weed out these kinds of scam artists.
Like other small franchises, martial arts studios are local small businesses that are tied in to the families and other businesses in the immediate communities. Many of these people intermingle regularly, where business and friendships often blend. These kinds of berry-patches are ripe pickings for the likes of MLM’s. This is unfortunately one of the down-sides with the martial arts industry.
A martial arts forum member (appropriately named ‘Fantasy Warrior’) shared this advertisement they received from ACN:
“ACN’s unique business opportunity, combined with the unlimited growth potential of network marketing, has created one of the most exciting opportunities of all time! Are you ready to join the excitement? All you have to do is get 20 customers from your friends & family and get three representatives under you and you are started. Do this in 30 days and receive a $500.00 bonus. Could you sell our Long Distance $4.99 a month @ 4.9 cents a minute with ACN-2-ACN Free Calling Nation Wide!!! or our local phone service. You will receive a percent of all the customers monthly bills. Don’t stop at 20 customers that’s just the beginning. Yes even from your representative’s customers below you. Yes, you collect from your entire down line no matter how long & big it gets.”
“… from your friends and family …” that is about as big a red flag as can be waved in the MLM and Pyramid Scheme rackets.
William asks how the FTC is not involved. That’s a very good question, as a search on the FTC website makes no mention of ACN. They might be currently investigating them, perhaps in the process of building some kind of case. But the FTC has a history of missing or avoiding entirely some pretty significant scams. Government bureaucracies can only protect consumers to an extent, and typically in only in hindsight rather than taking preventive actions that would put a stop to these kinds of organizations before they get away withmillions or billions of dollars. (Kevin Trudeau, anyone?)
One of the many benefits of filtering information through the sieve of skepticism is that you can protect yourself and your family much more effectively and efficiently than any government agency. Understanding the true nature of MLM’s, and the environments where they thrive, allows us to see these kinds of scam-artists coming a mile away. Our friends online at Pyramid Scheme Alert are a very good resource for learning more about MLM’s, Pyramid Schemes, Ponzis, and other related scams.