Archive | Fortune Hi-Tech

74% Of Fortune Hi Tech Reps Earned Less Than $10 A Year – Paul Orberson Earned Over $20 Million Since 2007

74% Of Fortune Hi Tech Reps Earned Less Than $10 A Year – Paul Orberson Earned Over $20 Million Since 2007

LEXINGTON (AP) — A court-ordered report shows the top two executives of a Lexington company accused of running a pyramid scheme made almost $40 million in the last few years.

The Lexington Herald-Leader reports the document also shows almost all independent representatives for Fortune Hi-Tech Marketing made less than $1,000 per year in commissions.Federal authorities shut down the company’s operations in January, alleging it was an illegal pyramid scheme because it rewarded representatives more for recruiting than for selling products.Attorney Stephen Amato, who represents the company, denied that it was running a pyramid scheme. Amato said Fortune Hi-Tech was a legitimate business.

“Fortune was not operating as a pyramid scheme and in our opinion, Fortune Hi-Tech Marketing was operating a safe and legal business in the marketplace,” he said.

The report says founder Paul Orberson received $21.2 million in salary and dividends since 2007 and CEO Thomas Mills made $18.1 million in the same time frame.“Other shareholders, many of whom appear to be family members of either Mr. Orberson or Mr. Mills, received approximately $9.5 million in dividends and salary,” the report states.Meanwhile, the report said 98 percent of representatives got less than $1,000 a year and 74 percent received less than $10 annually. -

See more at: http://www.centralkynews.com/amnews/news/amn-report-says-hitech-execs-netted-millions-20130301,0,4968048.story#sthash.xnt4OMO7.dpuf

Posted in FHTM, Fortune Hi-Tech3 Comments

Fortune Hi Tech Marketing: FTC Tells 100,000 Reps to STOP SELLING!

Fortune Hi Tech Marketing: FTC Tells 100,000 Reps to STOP SELLING!

scamFortune Hi Tech Marketing is in the long downward death-spin as they face legal battles in court of being a illegal pyramid scheme. Recently, the FTC has told around 100,000 representatives that were marketing Fortune Hi Tech’s products to cease and desist all promotions of the product or opportunity.

Even though Paul Oberson claims that Fortune Hi Tech sells products that people use every day, the real priority with the company was recruiting wholeheartedly. Authorities are now estimating that distributors lost around $1,500 a year on fees and required purchases they had to make in order to stay active.

Fortune Hi Tech was also attacked for their questionable payment structure and compensation offered to representatives.

“No matter how hard you work or would work, there’s little chance you could break even,” said FTC Midwest Director Steve Baker. “In fact, when people were doing their best, the plan is set up so that 96 percent of people must lose money to keep this whole enterprise functioning. Fortune knows that and has set this company up to produce those results.”

This is another example of network marketing taking a hit due to someone else’s greed. Fortune Hi Tech never really had a business model planned for acquiring customers, only for duping people into a false opportunity.

Sadly, the industry must pay the piper now as the DSA and other large organizations launch transparency campaigns showing network marketing as a legitimate business where REAL products and services are actually sold.

Kentucky authorities say that Fortune Hi Tech’s President Paul Obserson, Vice President Thomas Mills and others in the higher echelons could face felony charges for violating Kentucky’s consumer protection laws.

Posted in FHTM, Fortune Hi-Tech, Scam Alert0 Comments

FTC Shuts Down Fortune Hi Tech Marketing – FHTM

FTC Shuts Down Fortune Hi Tech Marketing – FHTM

fhtm-1Word came down today that Fortune Hi Tech Marketing has been shut down by the FTC and three state attorneys general.

We reported that FHTM came under fire back in 2010 with North Dakota and Montana.

A receiver appointed by the U.S. District Court of Northern Illinois raided the headquarters and warehouse in Lexington, Kentucky.

The court also froze Fortune Hi Tech’s assets.

Here is a snip from the FTC site:

“At the request of the Federal Trade Commission and the states of Illinois, Kentucky, and North Carolina, a federal court has halted an allegedly illegal pyramid scheme pending trial.  The FTC and the state attorneys general seek to stop the allegedly illegal practices of the Fortune Hi-Tech Marketing (FHTM) operation, which claimed consumers would make substantial income by joining the scheme.  The operation affected more than 100,000 consumers throughout the United States, including Puerto Rico, and Canada.  In some areas, including Chicago, the scheme targeted Spanish-speaking consumers.”

You can read the full complaint here.

Posted in FHTM, Fortune Hi-Tech10 Comments

How To Cancel FHTM – Fortune Hi Tech Marketing

How To Cancel FHTM – Fortune Hi Tech Marketing

I had a reader send me a message to ask me how they can cancel their FHTM business. 

I scoured the FHTM web site and couldn’t find anything about canceling, so I turned to the web and found and “eHow” article about how to cancel.  

Here is what I found:

Submit a written requests for a refund within 10 calendar days of the date of purchase. This is the process for purchasers who are at the manager level. Manager positions are purchased by individual representatives who have purchased the Optional Special Services Program. (You can find this policy in Section 11.4 of Policies and Procedures)

Return the Managers Sales Kit to FHTM within 20 calendar days after submitting your written request for cancellation. The kit has to be in excellent condition so it can be sold again.

Allow for a $40 reduction of your purchase price refund if you have attended the FHTM manager training program.

Wow.  10 days to cancel and even then you don’t get all of your money back?

What do you think of this kind of return/cancel policy? Fair or unfair?

Update: A very angry reader emailed me, telling me that FHTM actually offers a full refund within 3 days.

Wow.  Three whole days.  Shame on me for getting my facts wrong. 

The reader went on to tell me to “Get you facts right and instead of dumping on the one MLM company in the industry which has the highest integrity…”.

Not trying to pick a fight here, but you would think that the company with the “highest integrity” would have a lot less trouble with Attorney Generals and class action lawsuits:

FHTM Lawsuits and Attorney General Investigations

——-

Ty Tribble
Founder, MLMBlog

Free Webinar: How to make six-figures on Facebook.

Struggling to learn the Internet Marketing ropes and create leads?

Check out “The Factory

Posted in FHTM, Fortune Hi-Tech3 Comments

fhtm

FHTM – Fortune Hi Tech Marketing California Class Action Lawsuit

Fortune Hi Tech MLM is in the news again.  This time for a Class Action Lawsuit filed in the State of California.  It is now very clear that FHTM has a target on it’s back and it may be time for a reality check if you are currently involved with the company.

The newest lawsuit in California (see PDF) comes on the heals of the following:

Fortune Hi Tech Under Fire In Canada

North Carolina Attorney General Investigating Fortune Hi Tech Marketing

FHTM Class Action Pyramid Scheme Lawsuit (Kentucky)

Montana Shuts Down FHTM

North Dakota Files Cease and Desist against Fortune Hi Tech Marketing

Posted in Companies, FHTM, Fortune Hi-Tech, Lawsuits9 Comments

canadian-flag-640

Fortune Hi Tech Under Fire In Canada

A user submitted article:

By Matthew Claxton, Langley Advance

A multi-level marketing scheme expanding into Langley is under investigation in the U.S. and is facing allegations of unsavoury practices there.

Fortune Hi-Tech Marketing calls itself a “network marketing” or “relationship marketing” company, using personal connections and social networking to sell a variety of products.

The company has come under fire for its practices in the United States, largely because it pays its members for signing up new members.

That’s a warning sign that a company may be a pyramid scheme, say government and business watchdogs.

Gabrielle Tasse of the Competition Bureau of Canada said standard multi-level marketing companies make their money selling products.

“[Pyramid schemes] make their money off recruiting others,” Tasse said.

She couldn’t comment directly on FHTM, or say whether there have been complaints or if there are any investigations at present.

The Langley Advance sat in on a recent FHTM meeting, held in the Langley Township’s council chambers on a Wednesday evening. The first portion of the meeting was held to recruit new members. The emphasis for much of the hour and a half meeting was on signing up still more members.

A top rep for the company in B.C. said reps undertake a two-step process: step one is selling products and services, step two is introducing the program to others.

“New guests in the room, your job is to build teams of 12,” said Derek Sheane.

Along with Jessica Ward, Sheane told the crowd the couple joined 10 months ago and have quit their regular jobs to focus on FHTM full time.

Sheane and Ward emphasized that “anyone can do this business,” and encouraged those signing up to then go out and sign up more people.

“Then we help them do the exact same thing,” he said.

New members must pay $250 to join. Members then get a $125 direct deposit payment for each new recruit they sign up.

The company does sell a number of products online, including vitamins (from a firm owned by the FHTM founder), travel services, a roadside assistance package, VoiP services, and cellphone coverage. When a product is sold, the sales rep gets a percentage of the value of the sale. For an ongoing contract such as cellphone service, the percentage is received every month.

Rewards and promotions within the company’s structure include a strong emphasis on developing a large network of recruits. Free trips, and even leased Lexus sedans, are available for people who hit certain targets.

Sheane and Ward recently qualified for a Lexus.

The reps also encouraged people to sign up for many of the products themselves.

Susan (not her real name) never got anywhere near a Lexus in her brief time with FHTM. Unemployed since she was laid off several years ago, Susan was invited by a friend who was already a member.

The Maple Ridge woman signed up two months ago, paying $299 to become a member. She then had to immediately accumulate three “customer points” to begin selling and recruiting.

She paid for the company’s online office system, which has a video site and telephone service, and keeps track of sales.

“It came to another $150 bucks on top of that,” she said.

“At first, they seemed very helpful,” she said of the company’s reps.

Susan quickly realized that the system was not for her. Within a week of joining, on Sept. 30, she had decided to leave the company, and she tried to get her money back.

She had been told she could get her $299 fee back within 10 days, and when she phoned a rep, she was told it would be no problem.

Then she received an email saying she would have to return the binders and info packages she’d been sent, and that she would have to fax in a signed statement saying she was quitting.

Susan said she believes she sent everything back in time, but she still hasn’t got any of her money back.

She said she’s going to keep trying to get her money returned.

John, a Langley man who asked that his last name not be used, attended one of the FHTM meetings at Susan’s invitation.

He said he was immediately suspicious, and he didn’t think most of the products were worth the price.

“The prices were just horrible,” he said.

While the reps talked about how they’re affiliated with big-named companies such as Starbucks, Travelocity, and Best Buy, they are essentially just referring or re-selling when making most sales.

But the biggest issue for John was the emphasis on signing up new people, as opposed to selling products.

John estimated about 90 per cent of the time at the meeting he attended was devoted to talk about signing up more reps.

John said he’s worried that many of the young people he saw at the meeting won’t know the warning signs and will put their money into the company.

FHTM settled with Montana’s state securities commissioner recently, paying $1 million, including $840,000 in reimbursements to many of its members.

The company did not admit to any wrongdoing as part of the settlement.

FHTM also had to agree to change its business practices in Montana. It now only charges $75 there to become a representative.

The firm has a C- rating from the Better Business Bureau, recently raised from a D. It had an F a few months ago.

The firm has more than 50 complaints from across the continent, although none of them come from B.C., and about 80 per cent have been resolved.

In Langley, the firm has been holding its meetings in the Township hall’s council chambers for about a month.

David Leavers, who oversees Township facilities, said that after he was contacted by the Advance about FHTM, he checked to see if they have a local business licence. They didn’t, so a letter has been sent asking them to apply for one in the Township.

Local FHTM reps did not answer questions about the firm’s marketing practices, and referred all questions to their Lexington, Ky. head offices.

A written list of questions has been forwarded to the company, as per chief operations officer David Mills’s request. He did not respond by deadline Monday.

Read more: http://www.langleyadvance.com/Marketing+company+questioned/3763457/story.html#ixzz18BE6LkN2

Posted in Companies, Fortune Hi-Tech2 Comments

FHTM-crop-header

Fortune Hi Tech Being Invesigated By North Carolina Attorney General

Another State Attorney General is investigating Fortune Hi Tech Marketing (FHTM) as a Pyramid Scheme. At some point, the reps in the field are going to become weary of the story about several former attorney generals saying everything is OK at Fortune. North Carolina is the third state in a very short period of time to investigate FHTM.

StarNewsOnline:

A spokeswoman for the attorney general, Noelle Talley, said investigators with the consumer protection division are concerned about Fortune Hi-Tech Marketing’s operations in North Carolina. Investigators are reviewing more than a dozen consumer complaints to determine if the company’s activities violate state laws, and the office was contacting other attorney generals to exchange information and review what kinds of complaints they had received, Talley said. The investigation began earlier this fall.

This is after Montana and North Dakota shut down Fortune Hi Tech for periods of time.

Posted in FHTM, Fortune Hi-Tech0 Comments

Fortune Hi Tech – FHTM Pyramid Scheme Class Action Lawsuit

Fortune Hi Tech – FHTM Pyramid Scheme Class Action Lawsuit

Kevin Thompson, The MLM Attorney has posted information about a new Class Action lawsuit against Fortune Hi Tech Marketing (FHTM).

Here’s a snip:

I cannot predict if the allegations will prove true or not because I know very little about the FHTM model; however, it seems like the complaint focuses squarely on the FHTM policies and the pay plan, which means there’s not much wiggle room for FHTM. It will be hard for them to defend their practice of paying commissions on training fees, which I think is their largest problem.

FHTM reps habitually say “we have former state attorney generals on our legal team.” Allow me to address this point: simply because a company has hired “former AGs” as their attorneys, it does not mean that those AGs understand the industry.

Read the rest of Kevin’s post including a copy of the lawsuit.

Here’s more on the lawsuit:

A class action lawsuit was filed against Fortune Hi-Tech Marketing (FHTM), its officers, directors, Presidential Ambassadors and all National Sales Managers claiming fraud, pyramid scheme and RICO violations in the Eastern District of the Federal Courts on September 2, 2010

Defendants listed in the lawsuit include: Fortune Hi-Tech Marketing, Paul C. Orberson, Jeff Orberson, Thomas A. Mills, David Mills, Billy Stahl, Simon Davies, Ruel Morton, Todd Rowland, Ashley Rowland, Todd & Ashley, Inc., Mike Misenheimer, Steve Jordan, Joel McNinch, Chris Doyle, Ken Brown, Jerry Brown, Bob Decant, Joanne McMahon, Terry Walker, Sandi Walker, Sherri Winter, Trey Knight, Kevin Mullins, Scott Aguilar, Molly Aguilar, Nathan Kirby, Dwayne Brown, Aaron Decker, Susan Frank, Ramiro Armenta, Angelina Armenta, Alexis Adame, Teresa Adame, Darla DiGrandi, Matt Morse, Matt Barrett and Roberto Rivera.

This is an action by plaintiffs on behalf of themselves and those similarly situated to recover damages caused by the defendants’ operation of an inherently fraudulent pyramid scheme. The pyramid scheme is fraudulent because it requires the payment by participants of money to defendant Fortune Hi-Tech Marketing, Inc. (“Fortune”), in return for which participants receive (1) the right to sell products and (2) the right to receive in return for recruiting other participants into the program rewards which are unrelated to sale of the product to ultimate users.

This action is brought on behalf of a national class of persons who serve or have served as independent representatives for Fortune, pursuant to the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961-1968 (“RICO”), the Kentucky Consumer Protection Act, KRS Chapter 367, and the laws of Kentucky.

Under the Compensation Plan utilized by Fortune until at least July 1, 2010, IRs are able to earn compensation from two sources: (1) bonuses for recruiting and sponsoring new representatives; and (2) commissions from sales of products and services by themselves and by recruits in their “downline.

Fortune operates as an illegal pyramid scheme because this compensation plan affords IRs the right to receive in return for recruiting other participants into Fortune rewards which are unrelated to the sale of products or services to ultimate users outside of Fortune. Fortune’s compensation plan involves an elaborate set of bonuses which are effectively the only way to earn money in Fortune and which are all tied not to real sales to outside customers, but rather to recruitment of new IRs.

To perpetuate the fraudulent pyramid scheme described above, Fortune claims to have special relationships with or to be a “partner” of several large major national companies whose products and services Fortune offers. These companies include, but are not limited to, AT&T, Verizon Wireless, Sprint, Dish Networks, General Electric Security (“GE Security”), DuPont and Home Depot. Fortune has used the trademarks of these and other companies in marketing materials and business presentations in order to convince prospective customers that Fortune is a legal business. In reality, Fortune does not have any sort of special relationship with these companies. Fortune is not a “partner” with Dish Networks. Rather it is a third-party independent contractor authorized to sell Dish Networks service. There are numerous other such third-party vendors of Dish Network.

All of the defendants in this action collectively form an “enterprise” under RICO, 18 U.S.C. § 1962, in that they are a group of individuals and entities associated in fact, although not a legal entity.

The defendants’ promotion of an illegal pyramid scheme is a per se scheme to defraud under the mail and wire fraud statutes; thus, the defendants have committed racketeering acts by promoting an illegal pyramid scheme by using and causing others to use the mail and by transmitting and causing others to transmit, by means of wire in interstate commerce, writing, signs, signals, pictures and sounds, all in furtherance of and for purposes of executing a scheme or artifice to defraud, namely an illegal pyramid scheme.

 

Posted in FHTM, Fortune Hi-Tech, Lawsuits27 Comments

ACN MLM Shut Down In Montana Called A Pyramid Scheme

ACN MLM Shut Down In Montana Called A Pyramid Scheme

I received an email alert from Len Clements tonight regarding the shut down of A.C.N. in the State of Montana.

Here is the full MarketWave alert from Len (posted with permission):

Earlier today the Montana Commissioner of Securities and Insurance Monica Lindeen (D) announced the issuance of a Cease and Desist Order and Notice of Proposed Agency Action against ACN, Inc. and several of its founders for allegedly operating a “pyramid scheme.”

One of the primary concerns cited in the announcement was the allegation that Montana participants “must personally buy” and sell a phone service that is “largely not available for use in Montana”.

The Commissioner also cited the low average earnings of ACN reps based in Montana. Allegedly, in 2008 ACN recruited 91 Montana participants who “paid approximately $61,741.69 to be a part of the program”, averaging $678 each. All but two lost money, with one making $696 and the other making $700. In 2009 “over 300″ Montana participants joined ACN and paid about $234,800, averaging about $775 each. According to the Commissioner’s Office ACN’s records show $896.86 was paid out to these participants, in total.

The Commissioner’s announcement can be viewed here:

http://www.sao.mt.gov/news/20100803ACN.html

Commentary:

(click the dots to read more)

Continue Reading

Posted in ACN, Companies, FHTM, Fortune Hi-Tech, Network Marketing News9 Comments

FHTM To Pay $1 Million To Settle With Montana Over Pyramid Scheme

FHTM To Pay $1 Million To Settle With Montana Over Pyramid Scheme

Helena- Kentucky-based Fortune Hi-Tech Marketing (FHTM) agreed today to pay nearly $1 million to settle an allegation by Montana Commissioner of Securities and Insurance Monica Lindeen that the company was operating a pyramid promotional scheme in Montana.

On March 4, 2010, Lindeen ordered the company to stop operations in the state and filed an action against the company, arising from consumer complaints that her office received and investigated. “This agreement sends a clear message to businesses operating illegally in Montana that I am committed to protecting consumers,” Lindeen responded. “Montanans work hard to support their families and I will not tolerate the sale of false promises to them.”

The Order and Proposed Action alleged that FHTM representatives were marketing the company as income potential to participants who agreed to recruit new participants. Those individuals were asked to pay $299 to join the program. FHTM representatives also lured new participants by claiming it offered huge income opportunities through partnerships with large companies such as Travelocity, General Electric, and The Home Depot, when such partnerships did not exist.

Details of the Consent Agreement and Order with Fortune Hi-Tech Marketing (FHTM):

• FHTM agrees to refund up to $840,000 to more than 3,400 Montana participants.

• FHTM and the company’s founders, Thomas Mills and Paul Orberson, will pay a fine of $100,000 to the Montana’s general fund. Dianne Graber, a Montana FHTM representative, will pay a $5,000 fine to the general fund.

• FHTM will contribute $50,000 to the Investor Protection Trust, a non-profit organization that provides investor education in Montana.

• In addition, FHTM will be required to change its business practices in Montana:

-New participants in FHTM will only be required to pay $75.00 to become a representative,

-FHTM will conduct training seminars along with representatives of the Commissioner’s Office, in Billings, Bozeman, Great Falls, Helena, Kalispell and Missoula, and will conduct web-based training that is mandatory for all current or prospective representatives,

-FHTM will provide a disclosure brochure to each current and prospective representative outlining FHTM’s program, including the average amount of income achieved and the average amount of time in the program required to reach each level,

-FHTM will reinforce with representatives that product sales are not primarily for self-consumption but for sale to non-participants, and

-FHTM will require its representatives to maintain records of non-participant customers and submit those records on a monthly basis.

Approximately two weeks from the settlement, Montana FHTM representatives entitled to refunds will be receiving letters from Commissioner Lindeen outlining the requirements to get their money. The refund amount is equal to the participants’ cost less any earnings they received from FHTM.

The settlement agreement can be found at http://www.csi.mt.gov. For more information about FHTM, call the Montana Commissioner of Securities and Insurance at 1-800-444-2040.

Posted in FHTM, Fortune Hi-Tech5 Comments

Last updated by at .

Ty's New Book: Double Your Income

Double Your Income - Ty Tribble

Categories

Archives

* First Name
* Email
  * = Required Field
 
Email Marketing You Can Trust