Is ACN A Pyramid Scheme? [2020 Review]

Welcome to my ACN review! If you are wondering is ACN a pyramid scheme or a scam, you've come to the right place! I'm here to help you find out.

I'm not going to keep you in suspense ACN is not a pyramid scheme but it's an MLM business. MLM businesses are not the same thing as a pyramid scheme, even though they employ a similar pyramid recruitment structure. For the time being MLMs are completely legal in the US, even though it seems the FTC has been tightening their guidelines on what constitutes as a pyramid scheme.

What Is ACN

ACN, Inc. is an American MLM company. The story of ACN begins in 1993. The company was originally a marketing division for a long-distance reseller LCI communications. ACN stands for American Communication Network.

LSI communications were acquired in 1998 by Qwest Communications and ACN became an independent company and focused on retailing gas and electricity through its own subsidiaries ACN energy and ACN Utility services.

During the 2010s ACN has expanded its operations to 26 countries on five continents, so the company has seen consistent growth. According to their website, they are the world's largest direct seller of telecommunications, energy, and essential services for home and business.

One of the more interesting facts about ACNs history is its past business relationship with Donald Trump. Trump acted as a spokes' person for the company from 2006 until becoming a presidential candidate in 2015.

ACN has a philanthropic community program that includes things like the Feeding Kids project that the company is running with Feeding America and Food Banks Canada. They also support the Ronald McDonald House Charities and several other causes.

ACNs core values are Integrity, Commitment to giving back, IBOs and customers above all else.

People Behind ACN

ACN was formed by Robert Stevanovski, Greg Provenzano and brother Tony and Mike Cupisz in 1993. They remain still at the helm of ACN overseeing its business ventures.

They all had a strong background in direct selling before forming ACN and they apparently decided to team up together to form a different kind of direct selling company. One that would but integrity in front of every decision.

Their key strategy was to offer products and services that people not only want but need. I.e. everyday necessities.

ACN Services

So what does ACN exactly sell? Well ACN seems to have a vast array of residential and business services that are modern-day necessities, true to their founding strategy.

Basically the services are all subcontracted from other companies and ACN just offers to sell the products at high volumes at competitive prices.

Services they offer for households:

• Bundles: AT&T, Frontier and Spectrum internet TV and phone bundles.
• Home Phone: Phone services from AT&T, Spectrum and Frontier
• Gas & Electricity: Heating gas and electricity plans from XOOM energy.
• High-Speed Internet: Internet connection services from AT&T, Frontier and Spectrum
• Satellite TV: Satellite TV services from Dish and Frontier
• Security & Automation: Smart home and home alarm systems from Vivint
• Wireless: Data plans for 4G LTE wireless networks from Flash Wireless
• Identity Theft: Identity theft protection from IDSeal
• Refer-A-Friend: A program from Flash Wireless that can get you free service if you manage to refer 5 friends

Services they offer to businesses:

• Gas & Electricity: Gas & electricity from Xoom
• Payment processing: Merchant payment processing services for independent contractors, online stores etc. from Sphere
• Identity Theft: Identity theft protection for employees from IDSeal
• Security & Automation: Security & surveillance, smart business control, monitoring, etc. from Vivint
• Satellite TV: Satellite TV services for offices, lobbies, restaurants, and stores from Dish.
• Wireless: Wireless cell phone service for businesses including unlimited talks & text, shareable high-speed data, etc. from Flash Wireless

So as you can see ACN has quite a lot of services but they are actually offered by several well-known service providers. ACN provides them the customers and takes a piece and don't seem to have any products that actually their own. Simple as that.

How Can You Make Money With ACN?

So how can you make money with ACN? ACN is an MLM business, so there are essentially two ways to make money with ACN if you become their independent representative.

The first is by selling their services. Direct selling is the core of MLMs and the idea is that all the sales reps and their recruits will form an army of salesmen that are constantly looking to close deals with consumers.

So you can make money by selling the telecommunication products to consumers and businesses. You will earn a commission of all the sales you make.

The second way to make money is by recruiting other individual sales reps under you. You will earn a share of their commissions as well. Since this is a multi-level marketing company, you will also earn shares from the people they recruit several levels down as well.

This means that if you recruit just a few people, you can still have thousands of people in your downline after just a few levels.

Even though the commissions get smaller as you move down, you don't need to be a rocket scientist to understand there is huge potential for passive income. But getting a thousand of people into your downline is not as easy as the people recruiting might tell you.

The compensation is complicated like with al MLMs, but the main thing you need to understand is that it's multi-leveled. You will earn more the more people you have in your downline.

You can find the full compensation plan for North America here.

Is ACN A Pyramid Scheme?

No. ACN doesn't seem to be a pyramid scheme. But it's definitely multi-level marketing, aka MLM business. Many people get MLMs and pyramid schemes mixed because some MLMs have turned out to be pyramid schemes and that's why the whole term MLM has a bad rep.

That's why many companies avoid using the term MLM and try to rebrand the business model with innovative terms like network marketing, referral marketing, social selling, binary, direct selling, etc.

It's important to understand the difference between legit MLMs and pyramid schemes to understand if a company is a pyramid scheme.

Both MLMs and pyramid schemes use a system where each individual sales rep can recruit more people into the system. But the key difference is that in a pyramid scheme the new recruits have to pay to get in the system and the reps earn income from these recruitment fees over several levels.

In a legit MLM, there can be small administrative fees but generally, the individual reps will only earn from the sales their downline makes.

Another thing authorities look for when assessing if a company is a pyramid scheme is if the majority of the revenue of the company is coming from recruitment fees.

When this happens, it's obvious that recruiting is the main business, not selling services or products. If this is the case, the company is essentially a scheme designed for transferring money from the bottom of the pyramid to the top.

A pyramid can't grow forever, so the bottom of the pyramid will always end up losing money. This is why pyramid schemes are illegal in most countries.

With MLMs, your odds of succeeding aren't really that much better, but there is always the possibility to make a profit by selling enough products or services directly to customers.

There are three questions I like to ask when I'm trying to find out if an MLM opportunity is a pyramid scheme:

1. How long has the company been around?

Pyramid schemes are usually short-lived, legit MLMs aren't. ACN has been around since 1993. At the time of writing this article that means about 27 years.

Most pyramid schemes are very short-lived, from a year to 5 tops. This is because people who invest in them get suspicious eventually, it's usually held back by cult like mentality but it inevitable when people aren't getting their money back.

The other possibility is that authorities get the gist of things and shut down the operation. Either way, it seems that there is no evidence pointing to ACN being a pyramid scheme because of its age.

2. Are There Products or services being sold?

Pyramid schemes often have obscure products or investment opportunities. This is because the products are just a front for the recruitment of ne people into the system. That's where the money really comes in.

In legit MLMs there will be actual products or services. While ACN doesn't seem to have any products or services of their own, they have partnered up with well established and trusted brands like AT&T and Frontier to sell their services.

Even though they don't have their own products, it's obvious they are creating a lot of revenue from selling the subcontracted services.

3. Are there any lawsuits?

Pyramid Schemes often have ongoing lawsuits before they go over if they've been around for a while. This is because authorities can't just shut them down, they need to go through the legal system first.

I did some digging around and I did find out that ACN has some lawsuits in it's past.

Most notably in 2002, ACN settled a case with the Bureau of Consumer Services in Pennsylvania about "slamming", aka changing consumer services without authorization.

In 2010 Montana Commissioner of Securities announced a Cease and Desist Order alleging ACN of running a pyramid scheme. It turned out the problem wasn't their business model but actions of their independent representatives' actions and the case was dropped.

Most recently SDNY District Judge permitted state-level charges of fraud, false advertising, and unfair competition against Donald Trump and his children related to their involvement with ACN.

So while there are some run-ins with the authorities in ACNs history, only one of them is about them running a pyramid scheme. That allegation was dropped because it was due to independent reps, not the company and ACN agreed to implement additional training for the reps. Keep in mind that all companies of this magnitude will have some lawsuits in their past.

So there is no real evidence pointing to ACN being a pyramid scheme. That said, it's an MLM, and in my opinion, there are business opportunities with better perks.

I will show you one that you can use to get leads even if you want to stick with ACN or any other MLM.

An Option To MLMs

I personally prefer affiliate marketing to MLMs. More specifically search engine optimization based online affiliate marketing.

Compared to MLMs it has pretty awesome advantages:

• No need to sell directly
• No need to recruit people
• No convincing people directly, face to face or over the phone
• No need to hunt for leads
• Freedom to work from anywhere
• Real passive income from customer sales commissions, not from your recruits
• The minimal financial investment to get started

These are just a few from the top of my head. But make no mistake, this is not a get-rich-quick scheme. This is a legit business model, so it involves quite a bit of work, and to be honest, most people fail.

The reason people fail with this business model is that they don't know what to do and because they give up too early. Just like with most other businesses.

But unlike regular businesses, the financial investment to get started with affiliate marketing is minimal, you can in fact start for free.

But if you really want to succeed, you are going to have to invest in some training. If you want to learn more about this business model, and how I created two income producing websites, check out my number one recommendation through the link below.

If you are serious about getting started with affiliate marketing, you can also join my free 7-day online marketing course that will walk you through the initial steps. But only join if you are willing to work for it, otherwise I'd prefer you to save both our time.

If you found this review useful, feel free to share it on social media! Thanks for reading and see you next time!