People recruited by sales company ACN ‘losing money’
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BBCA number of people recruited by a sales company offering the chance to make money “most people only dream about” said they have been left out of pocket.
ACN, a so-called multi-level marketing company based in the US, has recruited hundreds of people in the UK.
It costs about £400 to join and people can make money by selling utility contracts – often to friends or family.
ACN said it made it clear there was no magic formula for success and it depended on an individual’s talent.
The BBC has spoken to some people who signed up after attending one of ACN’s “dynamic training events”, regularly held in towns and cities across the country.
Who is joining?
The BBC has been told ACN has made big inroads in British Asian communities in the north of England.
The BBC has been told that ACN’s meetings in Bradford, Sheffield and Manchester are highly popular with British Asians.
Many of the people the BBC spoke to did not want family and friends to to know they had lost their money.
One woman, who asked to be identified only as Aysha said: “People from this background, they’re first generation British, their parents come with nothing and that’s one reason they want to give this a go.
“We were naive to think it might be an opportunity for us.”
Robert Fitzpatrick has long campaigned against multi-level marketing companies such as ACN.
He said because multi-level marketing companies relied on members’ personal contacts, they sometimes made a big impact in “ethnic communities”.
Mr Fitzpatrick said: “ACN, like all MLMs, tries to commercialise your private social capital, your relationships with family, closest friends.
“They get you to exploit these by propositioning all those people and they’re doomed to failure.”
More than 400,000 people in the UK are said to have signed up to multi-level marketing companies, according to the Direct selling Association.
Dr Alan Duboisée de Ricquebourg, a lecturer in accounting and finance at the University of Leeds, said this multi-level marketing company was “absolutely not a pyramid scheme”.
He said: “The people recruited are also selling products. This is a legit business model, no legal problems.”
Pyramid schemes, which bring in new members on the promise of payment for recruiting other people rather than selling goods, are often illegal.
What are people’s experiences of ACN?
ACN uses a model called multi-level marketing, or MLM, which means that anyone who encourages someone else to sign up gets a small commission on whatever they sell – this is known as “residual income”.
For about £400, recruits get to sell ACN’s products and use the company’s branding and promotional materials.
Every week, ACN sales people gather in conference rooms to watch inspirational speakers and sign up new recruits.
ACN’s contracts warn people they might not make any money but people who have been to their meetings claimed they had a different focus.
One man, who asked to be identified only as Immy, went to a meeting in Bradford.
He said: “They were saying people made this much, that much money, I thought nothing can go wrong but I didn’t make any money, not a penny.”
The BBC has spoken to a number of people who failed to recoup their initial subscription.
Aysha got involved with ACN after her friends started attending meetings in Sheffield.
She said: “I was in a dead-end job and wanted more money. A friend said, ‘you can see how much people are earning, you’d be good at this’.
“I’m not the type of person to go out there and tell people to sign up for things.
“It was hard for me. People said, ‘I’m not buying gas and electric off you’.”
Some of the people who have got involved with ACN said they ended up selling to their friends and families.
Liam Day, from Manchester, said: “I recruited a friend into the business who I’m amazed is still speaking to me.
“My grandma, my aunt, my mum all signed up for things with me.
“My grandma ended up in a lot of debt which obviously brings a lot of guilt.”
What does ACN say?
ACN’s website boasts it “bypasses traditional, expensive forms of marketing and instead goes directly to customers by working through people just like you”.
“The result is a better value on services for customers, and a remarkable income-generating opportunity for you,” the website says.
“Whether it starts out as just enough to pay a few bills each month – or over time grows to provide a level of financial security most people only dream about – residual income can and will enhance your life.”
Some people claimed to have been successful with ACN.
Former Sheffield taxi driver Danyal Islam is now an ACN entrepreneur.
He was approached by the BBC but did not want to comment.
Another ACN success story is Mohammad Abubakr Qasim from Bradford.
Speaking via Facebook, he told the BBC: “I hope it is not your agenda to make multi-level marketing look bad because of the incompetence of people who purchase a licence and decide to do little or nothing.”
ACN said their business model of “direct selling” was a respected method.
The company said its “independent business owners” followed industry codes of practice and were prohibited from using high-pressure sales tactics.
ACN members do not earn money for recruiting other business owners, only when they in turn acquire customers.
Inside Out (Yorkshire and Lincolnshire) investigates multi-level marketing on BBC One at 19:30 GMT on Monday 9 March and can be seen afterwards on BBC iPlayer.
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