Atlanta Newspaper Examines MLM Scheme Stream Energy / Ignite

By Robert FitzPatrick of Pyramid Scheme Alert

In a feature report, a major metropolitan newspaper, the Atlanta Journal-Constitution, examined the MLM scheme, Stream Energy/Ignite, focusing on the question of whether the company is operating a disguised pyramid scheme. Stream is a reseller of utility services, gas and electricity, and operates in several states. Ignite is the multi-level marketing  sales division.  

The company uses a pyramid pay plan to enroll salespeople, each of which pays several hundred dollars to join the plan and then an additional  monthly charge to participate.  The newspaper asked Pyramid Scheme Alert president, Robert FitzPatrick, to analyze the company’s payout disclosure. The analysis revealed that less than 2% of Ignite salespeople make any profit. Stream Energy/Ignite is the subject of a class action lawsuit brought by consumers claiming the company operates a pyramid scheme.

Stream officials told the newspaper that it has 400,000 customers and 172,000 salespeople, an apparent  ratio of less than two retail customers per salesperson.  The company did not divulge exactly  how many of the salespeople are also “customers”.

To gain commissions from “downline” purchases and sales each salesperson is required under the pay plan to have four customers, (called Energy Accounts). However, in order to qualify for rewards, the plan allows the new recruits to count their own personal purchases as two retail sales. Personal purchases, therefore, become an additional investment made by new recruits to get in on the recruitment-related rewards.

The analysis also showed that less than 2% at the top of the Stream/Ignite sales pyramid received 55% of all commissions. The article noted that the Governor’s Office of Consumer Protection… “will investigate the matter again, due to issues raised by the AJC (Atlanta Journal-Constitution).”

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Comments (5)

  • Real Investor

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    What a bunch of absolute clowns, ripping off the public like that.

    Anyone who joins that group is an absolute fool. Less than 2%. Don’t people learn from the past? Enron, Amway, Excel Communications.

    STAY AWAY FROM THKIS COMPANY. They are nothing but trouble for all but them.

    Reply

  • Also a real investor

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    This story is totally false! I checked into this when my friend showed it to me. I did a lot of research on it. After I had been trying to decide if it was for me or not he got back in contact with me. He had already made a profit!

    Reply

  • Not the point

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    Fine that they made a profit, but how much? The article merely points out that the top 2% make 55% of the money. It’s called a pyramid scheme.

    Reply

  • Jamie

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    Im a police officer and a woman named Blanca Lopez approached my fiance, who was treating Blanca’s son in the ER and gave her a business card. She tries selling this mess to my fiance so my fiance turned it over to me to investigate. I looked at the website and its the same old pyramid scheme. I called Blanca and she was extremely rude and wouldn’t shut up long enough for me to ask questions. And the number she provided sometimes rings to a phiser research center. Something shady there. Then Blanca said she was an attorney. I immediately asked her for her state bar ID number and as I suspected she didn’t have a damn clue what I was talking about. What a load of crap. I then advised her to keep her scam away from this town.

    Reply

  • myers McCray

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    I reconized this as a pyramid scheme as soon as my friend called me to look at it but wouldn’t elaborate. As a retired LAPD officer, I read and listen to the scam videos. The immediately reminded me of Organo Gold and another scam that required recruiting more members.

    You are immediately asked for your SS# and all your banking info to pay them a monthly fee.

    It never said how you make money selling energy. Without recruiting new members you are dead in the water at $0.50 a member. If you need money that bad, go to Walmart, Mickie Dees, or sell peanuts. You will see a profit and won’t have to get your friends in a ripoff scam. It stinks hi heaven.

    Reply

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