ACN: The Debate, Is It a Pyramid Scheme?

hasher22 on 11/02/2018 - 00:52
Last edited 11/02/2018 - 16:54 by 2 other users

Pyramid Schemes are illegal in Australia, no ifs or buts. But how a company is defined in engaging in a pyramid scheme is questionable.

My mate messaged me one day and he advised he started his own business and is looking to recruit people under him to sell his product: ranging from mobile phone plans, landline plans, gas and electricity rates etc…..

He advised every product sold, I will get a percentage of the bill as income. The more people that sign up and stay with the plan, the more money I'll get. The first thing that came to my head, was just being a sales rep, nothing new.

Then he started spilling things that made it obvious it was a pyramid scheme;
1 - Start up fee
2 - I will be recruiting other people under my name, whatever they make, I will get a percentage of what they make plus my customers

Then it clicked to me, I told him I will not engage in any pyramid schemes. I genuinely thought he purchased a franchise or something. Because I asked him what will be my base rate, how many sicks days will I get etc. Normal entitlements if I was hired as a full-time/part-time employee. This was not the case, I would need my own ABN and technically I work for myself but under a company….

We had a little debate stating it is or isn't a pyramid scheme and I did respect his decision. Then I asked what is the company, he said "ACN". Straight away, from memory, I've heard bad stories about employees being lured into ACN into a pyramid scheme.

So I looked online if ACN is a "pyramid scheme", in 2004 an investigation was made by ACCC onto ACN if they were engaging in such illegal acts of a pyramid scheme, turns out they're not. But to me they are, they just found a loophole, in my opinion.

Thoughts in ACN or Pyramid schemes in general? Have you been lured or even signed up to one?

Related Stores

ACN Global

• theHMASfriendship on 11/02/2018 - 00:56 Comment score below threshold.
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  trustnoone on 11/02/2018 - 01:13

  +2

  I don't know much about it, but I think they're technically called MLM (Multi Level Marketing) though I think some people still call them pyramid schemes. I think there is a slight difference though which is why they're still found as legal? Something about how in pyramid schemes all about making money off others (typically scamming) though the pyramid. While MLM is technically about selling a product to below you that sells that off to others i guess? Which I don't think is illegal.

  As you say though, I've seen places online where people lose friends due to making them fall for this, typically you never are able to sell what you need to buy so you end up with too much stock and start really pushing the people around you to buy something, and a lot of places have premade pre fabricated messages to send to friends to get them to buy stock or become a "guru" or "leader" or similar to teach others.

  Anyways I hear it never works, but I've started getting a lot better in noticing when an "old friend" contacts me after years of never saying hi, to bring me in on a "great investment or scheme" lol. I'd stay away.

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  Cluster on 11/02/2018 - 01:24

  +3

  The definition of a pyramid scheme is if most of the income comes from recruiting more people, rather than an intrinsic product at the core of the company. I like the Norwegian definition of a pyramid scheme: if 50% or more of your revenue comes from getting new members, it's a scam.

  Pyramid scheme operators are of course smart enough to avoid the classic pitfall so put some worthless product or near useless service at the core to skirt by the laws.

  I've brushed up against several quasi pyramid scheme promoters over the years. One lady in a language class tried to get people to sign up for Amway. "I believe it's the future of shopping" she said, as she parroted the sales brochure. That was in 2005. As far as I know, Amway has yet to crush Woolworths, Coles, and Aldi.

  In another case a group tried to get me to join World Ventures to pay $300 and then $60 per month (yes, seriously!) to potentially save money on group package holidays and airfares. Members are desperate to sign up more members so they can stop paying the monthly fee. It's an obvious pyramid scheme but manages to skirt the law because it has a dubious product being sold through members.

  Maybe it's just my experience, but it seems recent immigrants to Australia and foreign students are more likely to get tied up in these things. Maybe it's the limited job prospects for traditional employment and wild claims from spruikers that anyone can earn millions by pushing a pyramid scheme that attracts vulnerable people.

  When people push a dodgy service on you, just say no. Everyone else is. Don't give in to desperate pleas targeted at family and friends. Just say no. The victim will quickly run out of family and friends to push their wares onto and ultimately give up. The victim may dislike you, think you're stupid by rejecting their Super Offer(TM), or threaten to break off relations, but by saying no you're helping them in the long term.

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  Davo1111 on 11/02/2018 - 01:54

  +2

  if you have to ask, yes it is

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  [Deactivated] on 11/02/2018 - 01:59

  +3

  yup scam.
  nothing good comes from ACN.
  your friend isn't a friend if he is selling to you.
  end of story

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    Flying Ace on 11/02/2018 - 09:18

    +1

    Not a scam, but you need to really be at the top of the pyramid (sorry, not pyramid - let's call it a triangle, because people who are in these schemes get very sensitive when you mention "pyramid"), to be successful.

    • 

      RockyRaccoon on 11/02/2018 - 09:34

      +1

      Agree. BTW where are you in the scheme of things (given your triangular gravatar)

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  Elwes on 11/02/2018 - 08:11

  +3

  https://youtu.be/uuVh36vQkSI
  First let me assure you that this is not one of those shady pyramid schemes you've heard about. Our model is the trapezoid!

  • 

    holdenmg on 11/02/2018 - 09:10

    +2

    I want a Monorail…

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  brentl on 11/02/2018 - 09:18

  +1

  Know people that have been involved with Herbalife and Amway.
  They lose friends very quick and fill their feed with non stop advertising. Their friendship is built on gaining your trust and trying to sell their product and getting you to go to meetings ect. I laugh when they tell me they are earning $150K at their main job, then earning $15K per month "on the side".
  I have no problem with people involved with MLN, however if you are not involved "at the top" you will never become rich from doing so.
  Also, don't tell me you are an Airborne "consultant".

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  monkeybusiness on 11/02/2018 - 12:16

  Yes it is a Pyramid scheme in nature just getting around the legal definition of one by classifying itself as a Multi Level Marketing company.

  Sound familiar?

  "Its shaped like a pyramid but its not a illegal pyramid scheme"

  https://www.youtube.com/watch?v=s6MwGeOm8iI

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  Baghern on 11/02/2018 - 12:19

  technically no.

  This is how a lot of sale businesses work. But they're generally a lot flatter.

  As someone else above said, the earnings from recruitment shouldn't be a big part of the income.

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  Yttrium on 11/02/2018 - 12:27

  Yes, ACN is a scam.

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  LC1 on 11/02/2018 - 19:32

  I got messaged by two people to join under them for the ACN. When i got the name I did research and found out as you did the ACCC tried to stop them in 2004 and also saw lots of people against ACN. A couple months later another i knew gave my number to some ACN person who also tried to sign me up. She did a video chat with a few other people and I joined just to see how they present the case. Most of the presentation was just the only way to make money is to sign other people up below you and the examples she gave was so bad. I feel sorry for the few people i knew who fell for it. ACN is a outright scam.

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  Raphael25 on 10/03/2018 - 01:05

  I agree with you, can't believe how they are even allowed in Australia where has such strict work laws.
  I had the misfortune of going to one of their "recruiting events" through someone known to me that was baited into it. I wasn't informed of anything before getting there, so i was under the impression that it was a legitimate business opportunity and gave it a shot to hear about it.

  Once you get there it feels like you are at church, but its the business church, and they are not only trying to brainwash you 24/7 but also will teach you how to brainwash other people. If it is not enough they still have the face to always voluntarily mention that it is not a "pyramid scheme", just the fact that they feel the need to mention it, shows how shady it is.

  You see a few presenters telling how the scheme changed their lives, and if you are just slightly skeptical you won't buy into these peoples stories and presentations. It's like a nest that drags vulnerable people with no investment knowledge who are desperate for any income and gets them stuck into a promise that will never happen. Not only that they also transform these people in sellers, but it's not a normal seller, they have a manual to keep on baiting the people, including the smart ones and not letting them know about the whole information or start fee, or annual fee, and only dump that on you when you are in their little church being brainwashed by dozens of them.

  It is very invasive, and you feel really bad when you are approached by other people cause they are really insistent and usually is someone you care about and can't just tell them to "fu*k off" as i would have done if it was someone else trying to sell me a scam.

  Im curious how can this still be a thing here in Australia?

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  itonez on 17/09/2018 - 19:00

  I had someone offering me cheap electricity if I were to join ACN.

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  [Deactivated] on 18/09/2018 - 16:24

  I was sold CLICK ENERGY by a friend. He showed me a comparison that how much more I am paying with Origin. When the first bill came to us. Our jaws dropped!!!

  Never ever entertain anyone selling gas/elec through these ACN scammers.

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  [Deactivated] on 26/10/2018 - 13:04

  This is a fraud scheme and I got scammed by friend. He came to my house and sold me a gas connection and didn't provide me the nitty gritty detaisl for example that the discount will be applied on the next bill. The first came soo high that left us in shock because the rates were higher and the company said discounts are applied in next usage and will reflect on the bill. We are not friends anymore and he has left ACN bullcrap MLM.

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  AssociatedKraftykoala @ ACN Global on 16/09/2019 - 13:52

  Hi All,

  Yes let me say firstly that YES I am Associated with ACN but here is why people don't make money from ACN, yet I do !!!

  The ACN training is yes CRAP !!! and teaches us to just get the Bare Minimum amount of services ( currently the target is 6 points for 3 services ). But the REAL money is made with ACN when you reach 75 points to earn 10% of the customer's monthly bills ( hence higher than 6 points ). But the training says achieve the Bare Minimum ( 6 points ) and then try and recruit other people.

  So having achieved this 6 points and potentially you are now earning ONE dollar per month, after 12 months you have earned 12 dollars. ACN computers don't generate a Commission Payment to your Bank Account unless the Amount owing to you is over $ 20 and after 12 months of just being owed $ 12, they therefore don't see a Commission Payment to their Bank Account. Hence after 12 months and not seeing any money, they walk around thinking that ACN is Crap !!!

  Nobody is going to be Motivated to achieve with ACN, unless they are seeing money but the ACN training, just teaches ACN IBO's to do the basics ( 6 points ) as mentioned above. Hence if no money is seen, then yes people will walk away disgruntled / ripped off etc

  Just my two cents for what it is worth .. Cheers and Thanks Sean ( a Current ACN IBO myself and happy with the money that I receive every month ) and other people could earn this as well etc.

  Cheers and Thanks Sean Richards
  ACN IBO.