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Is ACN a Pyramid Scam?

8-ball pyramid scheme model.

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At the scam.com forum, there is considerable debate about whether ACN is a pyramid scam.

One poster cites, in support of his theory that ACN is an illegal pyramid scam, two Government announcements, one from Australia and the other from the Canadian Competition Bureau

In the Australian Federal Court,

"On 15 November 2004 the ACCC instituted proceedings against Australian Communications Network Pty Ltd, a seller of telecommunications services, for alleged breaches of the pyramid selling scheme provisions of the Act.


On 23 March 2005 Justice Selway found that ACN participated in, promoted and induced or attempted to induce persons to take part in a pyramid selling scheme in contravention of section 65AAC of the Act, and that Mr Martin Paech, an ACN director, aided and abetted and was knowingly concerned in those contraventions.

The court also found that Mr Keith Janke and Mr Jonathon Gibbs, two ACN Independent Representatives, were knowingly concerned in and aided and abetted the contraventions, and Gibbschade Pty Ltd participated in the pyramid selling scheme, and attempted to induce other persons to participate in the scheme, in contravention of the Act."

And according to the Competition Bureau,

"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."

There is a significant problem with relying on these two cases: the Australian Federal Court's decision was overturned, and the Competition Bureau's case did not survive the preliminary hearing. For the latter, you would have had to gone to Corey Lewis's website, a Manitoba Lawyer, to find this information out as it does not appear on the Competition Bureau's website.

I think that these decisions are probably correct, the deception in most modern MLM's relate to the level of average compensation, the number of drop-outs, and the losses that those drop-outs on average have sustained, concepts related to earnings claims. The usual criminal definition of a pyramid should by applied to concepts like Skybiz.

Notwithstanding that these cases no longer can be relied upon, a number of independent consumer watch sites continue to rely upon these two cases to show that ACN is a pyramid scam. For example, over at mlmwatchdog.com there is a report purporting to show that ACN is a pyramid scam - but it has not been updated to reflect the status of these two competition cases.

Does this mean that I think ACN is not employing deceptive marketing practices? Well, this commentator certainly believes that ACN is employing deceptive marketing practices.

But, my own view is that a proper analysis of ACN's marketing practices should start with the proposed 26 new deceptive marketing practices, proposed by the FTC in April, 2006.

.

Finally, tell me what you think about this product, ClickBank by Michael Jones.Click Here!Doesn't this sound too good to be true? This sounds again like a deceptive marketing practice - promising more than can be delivered. What do you say?

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Comments

The question anyone should asking themselves is: what are my chances of making a living being their representative, and how much time will it involve?

Most people immediately think that since they know (2) people that they can recruit, being a rep is a slam dunk.

Not true, and ACN should be providing gross earnings summaries so people can see that.

Hi,

Always good to talk and have an open debate on a topic, so well done.

I have been involved with ACN for 6 years, when I first came across them it sure looked like a pyramid.

When I reaearched it in Ireland at the time, the Pyramid Selling Act 1980 had a summary document and the bottom line in it was that the difference between a pyramid and a genuine business was customers!

If the trade is within the organisation, then it is a pyramid, ACN are very particular about the differentiating between reps and reps as customers.


At the time also I contacted the comms regulator here and ACN has a monthly requirement to update it on customers.

According to www.cro.ie ACN has been registered here as a limited company since 09/04/2000 and I think you can get documents on the company there.

The ACN Ethics committee seems to have a number of ex US Attorney Generals. Expensive and I can't imaging half a dozen of them being on the take.

There is more information on this topic on www.acnintegrity.com I think it is and certainly www.acnintegrity.eu is good in this regard.

I visited the ACN office in March and I met their compliance manager, she says it is the only network marketing company to have such a post. This covers the comment above (and I did not read all), about how they rein in non compliant reps. She also deals with all the regulators etc.

What elsecan I say? Except that I have watched the company, listened to the owners, monitored what they have said and what they have done, I have watched the reps, the successful and the unsuccessful, all I have seen is honour and committment. Sure there are people who are not coming from a place of integrity, but they do not hang around long. So what is left are honest, committed people who are trying to change their circumstances and I unreservedly recommend this company.

I have been in the ACN business for 1 month and cannot understand what the problem is. I am a 42 year old Aussie male that reads what he signs, makes his own decisions and stands by them.
Yes I have approached friends and yes some of them said no to the ACN opportunity.
This does not mean we are no longer friends. I am based in Brisbane but work at a mine-site in W.A (2 weeks on and 1 week off), I'm sick of it, the long hours the interstate flights and the remote area's.
I was looking for something
I believe in the ACN business principle, not because I am brain washed,not because I have been forced or tricked into some scam.
I understand that business is what you make it, if you do nothing then expect nothing.
I do find it a little upsetting that a negative post on the various sites around the world, can stop a person joining the business, again I say joining the business, not being forced into it. My only hope is that you, the individual, can make up your own mind and see what the bigger ACN picture is.
Well done ACN, no you are not a PYRAMID

I to went to a meeting after having family members join ACN, after that on Dec 27th 2008 I paid my $523.95 including g.S.T. for the membership, that same day I paid a total of $211.46 for the digital phone this includes $99.99 for the digital phone, a $39.99 for activation, $29.99 Shipping and handling $32.99 monthly service charge $8.50 tax total sign-up charge $211.46, I was told I would recieve the digital phone within 5 - 7 business days, and I was going to have my number ported over which takes up to 3 weeks after 3 weeks I did not hear from or recieve my digital phone, I phoned ACN and they told me they never proceced my order as of yet, I told them to cancel my order and they told me they could not do so after a order has been placed, within a day I recieved a confirmation the phone was sent by UPS a few days later I recieved my phone which I could not use as they had not ported my number over yet, I went away on holidays for a few weeks and returned Feb 10th 2009 approx 1 1/2 months after, I had no confirmation from ACN regarding my phone # being ported over yet on Feb 11th I phoned ACN to find out what was going on and they informed me they have not processed my request to have my phone # ported over yet, I was furious I immediatly asked them to cancel my request to have my phone # ported over and I sent back the digital phone, they told me they would refund all but the shipping and handling $29.99 plus G.S.T. only when they recieve the phone in its original shape (I had to pay to ship it back). I than called customer service and demanded to get my membership of $523.95 refunded back to me they told me I was after my 10 days and they would not refund it, I asked to speak to a supervisor and they told me they would have one call me back, as of today Feb 14th 2009 I have never recieved a call back, I will be following up.

I joined ACN beliving I could make extra income I wanted to start off with the digital phone and show friends and family the benefits of it, I was not able to do that. I have had a friend join under me and he paid his $523.95 also, we are both getting out as we do not belive we could ethically sell there products terrible service, from my family members above me non have maid any money and are also all trying to get out, after more investigating it is very hard to make any money but in order to even qualify to make anything you need to spend a fortune I spent $735.41 and only had 2 points I was 3 points short to qualify which meant more money plus monthly recuring fees. I am now out over $550 that is if I recieve my money back for the phone. I urge anyone thinking of getting involved in ACN to do there homework and be aware of the cost to get involved and there poor customer service. I am keeping notes of all my dealings and experiance with ACN and I will be letting others know my story. After more investigating I belive ACN is a pyramid scheme and a scam.

I am not a newbee with ACN, nor am I that high up that I am becoming a millionaire. I dont want or need them to make me a millionaire. I have a full time job where I make around 35 thousand a year. If you are really interested in the pros and cons of ACN read what follows:

1. ACN can be like a cult. They drill these messages of becoming a millionaire into your head and people get absorbed with this, make it their full time job, and many probably alienate their friends and family around them.

2. You do not need to do it in this manner. The 500 dollars that you sign up with you end up making back. If you put a little work into it, you get it, not really a problem. Obviously if you know how to sell things you are better than others who dont. Some people fail completely because they are not good at selling. They will complain, and call it a scam, but like others have said, its a business, and if you dont have the talent for the business, you shouldnt get in.

3. There are a lot of guys who get in this that dont disclose full details with people. They hide certain truths and convince people and then deal with the problem of such an approach afterwards. However, I always tell EVERYTHING. I have some friends who liked it and some who dont. The ones who said they didnt want to do it, I never bothered again. The way I do it it definitely takes longer, but it is done with integrity and I am recieving extra income on the side of my job for relly very little work. Most importantly, none of my friends have stopped being friends with me because I am not pushy. I explain the business once (and if they say they dont want to hear about it, I dont even go as far as that) and then let them make a decision.

4. The phone service itself is great. It mostly saves people money (some people have really great phone plans, and again, I would never push this service onto someone who doesnt save money with it) and the customer service is great. It is a fully legitimate phone service and I have no worries about my reputation when offering it to people. I take diligent time to make sure it is worth it for them, and provide my number if ANYTHING goes wrong. In the year and a half i have done this, I have had two calls... both of which were resolved without any scam, or trickery.

5. In a year and a half I have got to the point where I make around 1000 dollars a month, 500 of which I do not have to work for (residual incomes). A lot of people who do this for a year and a half laugh at me because they are making a lot more money, but the truth is that they probably have alienated friends because they are extremely pushy, and they probably do this full time. For me this is just supplemental income, and I dont want anyone to feel like they are getting gyped.

For the reasons above i can promise you, this company can make you money, but the best way to go about is (where you leave with your friends, integrity and some money) is to have it as a side thing, which you work on for half a day a week. The people above you will push you to do it their way, and try and make you call everyone and do everything, but if you just build slowly... no problems. 12 thousand a year extra is a fantastic amount of money to make for the little work I do in it. The cult stuff, as well as the numerous people in the company with no integrity sucks, but it is not the company.

My 2 cents.

David

I joined ACN by going to a meeting that was put on by very legitimate people, who are now trying to show how much money you can make, but in fact you are actually praying upon your friends and family to buy what they do not need and sign for long durations, and possible getting them to get their other friends and family to join in. This may not be a true scam, but you are lowering yourself and your reputation as you try to sell a MLM marketed product that you will probably never make any money with. They now have the Donald Trump show to try and lure you in but watch out and if you quit as I did within hours, try to get your money back. You are supposed to get it but it has been over three weeks and all I get after long phone call on hold is it will take about another 2-3 weeks. Stay away from ACN they will only hurt you

Heather, there is so much misinformation in your comment. Here goes.

1. AG's don't authorize any scheme in advance, they wait for the complaints to flow in and then charge.

2. Donald Trump did not endorse ACN, he was simply at the convention.

3. Uh, an employed person gets a cheque, even if they are doing jack. They might get fired, but they are not paying for the opportunity to work.

4. Your use of the statistic 7 trillion dollar industry is simply a non starter unless you can quantify ACN's share, their rep's share.

ACN is not a pyramid scam. Pyramid scams are 100% illegal.

The communications we use are a government regulated utility I.E. the government says when and where we can do business - Pretty sure they don't authorize you oh ok you are going to do a scam no problem go ahead.
We have atourney Generals that are constantly looking in to our business to make sure we are running it with integrity.

Clearly Donald Trump wouldn't endorse a "scam". He's an extremely wealthy man and tried to purchase the company on three seperate occasions we did not approach him. Pretty sure Donald Trump has a LOT more to lose than any single person that's thinking of coming in to ACN. What have you got to lose...clearly you don't make enough money now...clearly you don't have a bright future ahead of you without this opportunity. What if it doesn't work? WELL WHAT IF IT DOES!!!!

ACN has the best commission structure out of any single MLM company that exists on this planet today. Lotion and potion MLM companies are hard to build but guess what every single person uses communications and it's a 7 trillion dollar industry that's never hurt by the ups and down of the economy.

Those that say ACN doesn't work or you can't make enough money didn't put in the hard work and dedication and are just plain and simply not deserving of the rewards ACN has to offer. Acquire customers acquire reps make money - don't do those things guess what NO MONEY! You go to your regular job and do jack all day....guess what they dont pay you!!!!!!!

The fact is when you join ACN the only way you make money is buy guilting your friends and family to join. The whole thing just takes advantage of others. I would rather just make my money honestly by getting of my ass and working everyday. Everyone wants to make money by doing hardly anything. Get a real job!

i just spent 500$ about 10 hrs. ago.... the acn people are very good at what they do... damn... I thought i would make alot of money from residual and not have to get people below me... im normally alot smarter than that... idk what i was thinking. i was very wrong... i think i could make alot of money but i also think i would lose alot of respect of my friends... i think im gonna just accept the 500$ as gone and not risk ruining friends over a few bucks

The difference between buying a juice bar and purchasing the ACN opportunity is that the former is regulated and material facts about the purchase and business must be disclosed.

ACN has no such requirments.

I think many of you are coming from the wrong Mindset. I just read previously an example of someone who joined Acn paid their $500 and made $700 not sure in how long. There are many people who do this in their first 30 days many more who dont.
So many of you complain about Acn because it didnt work for you. Fact is it doesnt work for many people which is to say nothing out there works for many people which is why something like 97% work for the other 3% My guess is all you complainers work for the other 3% which there is nothing wrong with. Acn is simply an opportunity to earn an additional income from which many people earn more through Acn than their jobs and other income streams. If you were to spend $250,000 on a juice bar like i nearly did 3 years ago i would have gone yrs and yrs before making a profit. If i was to fail would i then write reports on scam websites like this saying that the juice bar industry is a scam? Of course i wouldnt. Why? Because i understand that no matter what opportunities exist or no matter how good or bad they seem, not everyone will have success. Instead of venting your anger on a company that provided you with the same opportunity as an RVP, ask yourself why you failed and they succeeded. Why did you quit when the Rvp kept working and moving forward. If you think mlm is hard or a scam, try spending $300,000+ on what you think is a 'real' business and see how you go. Over 80% of businesses fail in their first yr the chances of you being one are very high. Before you write off ACN or any other mlm company ask yourself this one question.
Why didnt it work for me when it works and currently is still working for hundreds and thousands of others around the world?

At the end of the day Acn has created an opportunity. You took it and quit and blame them for your failure. Thats not right in anyones books. If you buy a business and fail, whos to blame for your failure? The government? The people who make your machines for the business? The insurance company? Do you blame poor location? The answer to why you failed is and always will be YOU. Please dont blame Acn, or any of these other MLM companies out there. Dont bag Donald Trump. When your worth just $1 billion, then you can say what you like. Until then talk blame others for your lack of abilty, for your lack of drive, determination, persistance,work ethic,passion, vision..i could go on.
YOU are the creator and destroyer of everything you are no one else. You made the decision to get started in Acn and you made the decision to quit. You are the cause of your own outcome just like i am the cause of mine. If i fail i wont blame Acn. If i succeed i wont give the credit to them either. They provided us all the same opportunity. We we do with it is up to us. They say how you do 1 thing is how you do everything. What other areas of your life do you think you have been scamed in? What other areas of your life do you blame others for?

To Your Success
Vince.

I attended an info session last night for ACN. First off, hats off to these guys they're incredible at what they do. They'll hype you up with out telling you anything. I got slightly excited as unlike most MLMs the products seemed genuinely useful. Useful != profitable. The telecomm is a shell, it's not where ACN makes its money.

I'm a numbers guy. Show me the dollars and cents and where they're coming from. The group meeting I attended was ~350 and had a monthly billing revenue of about $25,000. ACN is a reseller, how much of that $25,000 do you think they keep? 10%? $2,500 in revenue a month for a team of 350? Do the math, there's nothing there.

Don't like numbers? Let's put it this way, the two men who started the team are at the "20 Customer Points" level, and according to ACN the average customer is worth 2 points. You think a cell phone reseller can eat on ten customers?

The money comes from the $499 recruits pay in to get started + the monthly fees. That's where the focus. The telecomm products (and energy/utilities) are just a distraction.

Is there money to be made? Yes, there is always money to be made in MLMs. They are, however, a zero sum game. You only make money by recruiting new team members who recruit more new team members and so on.

I have multiple friends that have been brainwashed by this "company", and they have alienated all of their friends into thinking they are missing out if they dont by into ACN now. Most of my friends have signed up exect for a few of us who have actually researched this company. I have shown my friends who have signed up all the research i have come up with, but at this point they are so "brainwashed" they wont hear any of it. They are now in the process of ripping off all other family and friends. ACN reps tell you to sell to only friends and family that way you get the pitty sale, but in reality all you are doing is destroying your relationships. To any and all of you involved in this SCAM!! I hope its worth it!!!!!

Many of my friends have signed onto this ACN Hype, but without doing the proper research. They have been trying to get me to sign up for weeks telling me that we will all be so rich beond our wildest dreams. I have done extensive research on this company and the only place i am able to find anything possative about ACN is on their own website (what a suprise). I tried showing my friends the information i came up with and they are so "brainwashed" at this point they only believe what these "CROOKS" are telling them. So far they have all been able to suck more friends and family into this scheme, but in the long run they are just going to loose a lot of resepect from friends and family because they are ripping them off. So this is to all you people selling to your friends any family is it really worth ripping of the people you love just to try and get rich quick, (which will never happen anyway).

I am a manager of ADC and I am purchasing phones for my community to use. I am not concern about getting a profit from them I am more concern about if they work properly and the cheap long distance calls

you reallly have to be stupid to think that you'd be making millions with acn...do your homework...the only place on the internet that i found that was saying positive things about acn was on the acn's website, and the comments from the "newbies" who still feel "extremely" lucky that theyr'e going to get rich.......yea right!!!!!

my friend and her boyfriend joined like 2 weeks ago....now she planning on quitting her job because she's so sure that acn will make her a living...ma n her have been friends many years....but in 2 weeks she managed to loose me...they both got sooo annoying....none of our friends can stand them anymore...i keep them blocked off my msn, i dont answer when they call or anything....if u wanna keep ur friends and MONEY dont do it!!!!!!


oh and the donald trump thing....get real ppl, obviously he didnt get rich by ACN...he's jsut another celebrity that fit the profile for this job.....look at it this way..why was britney spears caught drinking coca cola, when she was clearly the spokesperson for pepsi....celebrities will do anything for the right amount of cash....

MY friend explained the whole thing to me.. Firstly.. it IS a scam.. its just HOW much of a scam which people to know about.
You work for people above you and they work for people above them (and so on).
At the end of it, you are needing thousands of customers to make your 'millions'.. all in all its not worth it if you have a great responsibiliy such as a family and marriage.

Do your homework!

I just found out tonight that my father signed up to this and because we as a family are hard of cash, we have not been able to pay the account. You get a late charge when you cant pay and as current, we are having to pay %800 more than the original bill.

If you want to make enemies out of your friends or dont care about your relationships, go for it.

If you are a Christian, dont let your friend pull the 'God card' on you because its just a money making sceme - at the end of the day..

ACN is like all the other sleazy mlm companies. The only ones benefiting from all your hard work are the people at the top of the pyramid. How come you never see new people at the top of the leaders list? It is the same story with all mlm companies.

Hi, well after reading all this ACN i don't know, interesting concept so are others. But my question is how did Donald Trump get rich was it because of MLM or Bill Gates for that matter ? They all created a product that some one was will to buy not MLM.

People think ACN is a job... well they don't understand that MLM is a business that you build. Residual Income is what you build, compensation plan is what they put in place after years of effort to be able to give more to people. No jobs give you residual income. Please guys read books about economy such as 'The Next Millionaire' by Paul Zane Pilzer. Listen to Robert Kiyosaki, Donald Trump, the integrity of the co-founders, the 3 general attorney... It's for your interest to understand!

I took a look into the actual product and it ended up not saving money. So, I told this to the guy trying to recruit me, and he called me 'stupid and broke'. (along with some other slams) What kind of leadership is that? I think he was disappointed that after several calls from him and a friend of mine trying to pressure me in to dropping all my weekend plans to for an ACN convention in another state-I said I can't go. I changed my mind again and again. But finally realized that the chances of success are slim, and that you have to pester your friends and family(ruin your relationship).

If the product was so great-it should sell itself. Obviously the money only comes from recruiting; that's why the guy called me a name, he probably thought he had me.
www.mlmsurvivor.com

Don't be fool i was also involve with ACN. I should find out more about it before i join. The problem with ACN is the commission is too low. They do not tell you what the fine line of things for example you have to pay monthly chages to them and a yearly charge. that is why your business cant take the next step because i felt like i dont make enough as it is and they put me in the negative. dont get me wrong im not the lazy type i went out there and sold my ass off and still i got no where. I was the type in the selling business called a shark i hassle like no tomorrow and i did that with ACN. It worked but all your hard work is for pennies all your work is for the people on the higher levels. Please do not get mix in with this company unless you like to waste time and money. I want to thank you for spending time reading this and i hope i change your mind about joining them.

What about their new viedo phone?
they have Mr. D. Trump backinging this, is this just a name droping thing to bring in people or what? Is ACN a good company yes or no?

hi

if i dont recruit in 30days..what happend then?

Cheers!!!

What efforts does ACN make to rein in its various representatives, who are making deceptive pitches?

Hi Michael,

I am an Independent Representative with ACN, and I appreciate your article. You did a very thorough job and the links were outstanding.

All literature directly from ACN is correct as it explains the compensation plans, residual percentage, etc. The issue with the misleading falls on the individual representatives. ACN does its best to ensure integrity with the company, but not everyone is perfect.

As you well know, ACN does not pay a bonus for new recruits unless action is taken in acquiring customers. Not only that, but the new representative has a 30 day period to acquire the few customers before any compensation is paid. That new rep can get the points completely by themselves, or their upline can assist them. Since their upline gets paid for getting new recruits their customers, it is in their interest to help them. Not all reps are motivated enough to sit down with their prospects and help them acquire customers to help get their organization off the ground. That is where the trouble lies. However, With more people promoting and gaining significant leadership positions, this is becoming less of a problem. The key to success in ACN is personal motivation which most people don't realize.

Thanks again for your article, and I wish you the best.

Matt C.

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