Too good to be true ACN MLM Scam?

ACN MLM Scam

Too good to be true ACN MLM Scam?

People always say, “If it’s too good to be true, then it probably isn’t true.”  This seems to be the mantra of many who have become skeptic of multi level marketing.  Often labeled as “pyramid scam”, ACN, a telecommunications company using MLM as a method for selling their products and services, is unfortunately not an exception to the stereotype.

ACN Montana Case

In 2010, Montana regulators filed a case against ACN.  Allegedly operating as a pyramid scheme and not MLM, ACN was charged by Montana regulators citing these figures:

  • In 2009, 312 people in Montana were listed as ACN salespeople.
  • They paid to ACN in “fees, renewals, supplies and conventions” (not products) a total of $234,813.02
  • This is an average payment, before products and other normal business expenses, of $752 per person.
  • In the same time period, this group was paid a total of $16,615.08 in commissions by ACN.
  • That is an average income of $53 each, a net loss of about $700 a person, just from fees and other direct costs to participate.
  • However, from actual sales to end-users, they earned only $896 in total.
  • That is an average of $2.82 per person in revenue from sales.

In addition, complainants report that the phone service ACN marketed was largely not available in Montana.

Montana’s Securities Commissioner stated, “ACN operates an illegal pyramid scheme that only benefits members if and when they find enough new members to join the scheme.  Once enrolled, members who join the program earn compensation for each new person they enlist.”

ACN has also faced controversies in Australia, New Zealand, and Canada, where pyramid schemes disguised as MLMs are vigilantly monitored.

It’s Not Too Good, Though

Although it’s a fact that fraud is rampant in the sales industry, a good number of MLM companies operate legally.  Whenever you get into unfamiliar, even familiar territories, you need to carefully study and do your homework.  ACN has a compensation plan available online.  With it, together with some research on statistics and a little math, you can make an informed decision.

Basing on ACN’s Personal Commissions table, you can receive a commission ranging from 2% to 10%.  Common sense would tell you that at this point, you should start pulling out a calculator.

If you have only ten friends signed up for ACN Advantage Home Plan at $33.99 per month that would be a total bill of $339.90 for ten persons.  According to the Personal Commissions bracket, you receive a 2% commission, which in this case is equivalent to $6.80.  That means if you want to earn at least $1000 in a month, you need to have 295 customers for the same plan.  That’ll bring you to a total bill of $10,027.05, qualified for the 10% commission bracket.  That is not quick money at all.

MLM is not a get-rich-quick pitch.  ACN presents their compensation plan complete with more specific details, which would actually make you carefully choose your options.  The best thing would be not to rely on what representatives say, but to read their contracts, plans, and any more materials you could find.  One thing’s for sure, MLM is not for everybody.

ACN MLM compensation plan pays you for two things: acquisition of new customers and recruitment of representatives.  The acquisition helps in the movement of ACN products and services, but so does the recruitment part.  More representatives mean more ways to make the brand known in the market.  A well-known brand equals more customers.  Needless to say, more customers means a more stable and successful business.

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