stable job with a future, or a scam that will leave you penniless?
Sometimes it's not so easy to tell!
expansion, nationally respected firm is seeking career minded
individuals who desire training in all aspects of operating
a branch office. Excellent career opportunity to earn $50,000
first-year management income. Prior experience
desirable but not necessary. Call (XXX) XXX-XXXX for immediate
above ad is NOT real. The sauthor made it up as an example.
Any resemblance to anyone's actual ad is coincidental.
reasonable enough. You apply. Your interviewer advises you that
the average rep in the industry makes over $100,000 a year,
not just the low-end $50,000 advertised, and the firm will
help you get there quickly. The risk sounds reasonable.
You agree to pay over $700 for your licensing/background
check, and in spite of your lack of experience, you are
hired. You note upon the first day of the training class that the
ten other new hires are primarily young and inexperienced. You stick
it out and pass your exams; now you are told to create a list of
friends and family that will serve as your leads, and you memorize
a sales script. After six months of being a "star performer"
slaving 60+ hours a week, you have grossed less than $5000, and
a good portion of that has been depleted by "business
costs" revealed to you only as they cropped up. Your
leads are drying up. The help you were promised is now minimal as
your manager focuses on attracting and training new reps. The vast
majority of your original class has left
(as well as even many reps hired after you), and you
finally decide that the job involves far more risk than was represented
to you. Although you signed a Non-Compete Agreement indicating
that you must leave your clients behind when you leave, you still
expect the commission trails from those clients' investments to
continue to help support you while you seek new employment. You
quit. The commission trails never come.
just described one victim's experience*.
fact, this is one of the less extreme examples.
reps leave heavily in debt because they've been convinced
to pay as much as $75,000 for the licensing/background check as
well as the firm's "exemplary" training classes. They
may even have been advised to "fake it till you make it"
and maxed out credit buying expensive business attire and a car
beyond their means just to project a successful (but false) image.
am not describing the many legitimate financial services positions
in which it takes months to establish a clientele but ultimately
pays off. In a legitimate job, the risks are disclosed up front.
With a scam job, the scammer deliberately misleads reps
about the job's true earning potential and then profits
on them till they are forced to quit for lack of income, and then
continues to profit even after on their commission trails. In fact,
it sets up the recruits to fail, much like many of today's illegal
MLMs and pyramid
schemes, continuously mining an inexperienced work
force who is willing to pay to get "trained"
to make a "fabulous" income and leave their hard-won clients
behind as they fail. When the above-mentioned
rep and over a dozen others sued the firm for fraud, the firm defended
itself by pointing to its official corporate literature, which described
an average rep being expected to earn only about $12,000 his
first year!* Of course, each rep claimed to have never been
informed of this.
the scammers don't just mine new college graduates and similarly
inexperienced job hunters. Victims have included seasoned former
attorneys, IT professionals, and even financial industry professionals
seeking an exciting new opportunity. Perpetrators of these types
of scams have become increasingly clever to avoid detection, and
ultimately, prosecution. The law has yet to catch up.
goal is to help NEW COLLEGE GRADS and THOSE NEW TO THE FINANCIAL
SERVICES INDUSTRY enter the field forewarned, aid those who have
been defrauded, and do my part to help end the scam.
that if you came here looking for evidence that a particular firm
is involved in the scam, you will not find absolute proof
here. I am not interested in getting sued; I am interested in imparting
helpful information to victims and potential victims. The next pages
describe an overview of the scam and then examine the components
in detail as far as I can make them out.
Cases were found in public court records.
NOTE TO THOSE RESEARCHING MLMs (multi-level
marketing organizations, direct sellers, network marketers,
viral marketers, consumer direct marketers, dual marketers,
etc.) OR SALES JOBS OF
ANY SORT (particularly
in the financial, real estate, personnel staffing,
and auto rental industries):
If you stumbled onto this site during your research,
you might as well read it in its entirety. Many of
the points apply to you as well. At a bare minimum see the
MLM section on the Links page and the Avoiding
The Scam page.