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No, FHTM does not fit the traditional definition of a pyramid scheme. Real products and services are being sold to consumers through the network of Fortune Hi-Tech Marketing representatives. These products and services include cell phone plans, internet telephone service plans, nutritional supplements and travel discounts.
However, since reps are independent, it is not known at any given time whether or not certain outlandish income claims are being made. Any company with thousands of sales representatives can potentially find itself misrepresented. There are plenty of representatives in this company who are successful.
MLM business models are a legitimate method for the selling and promoting of consumer goods and services. However, when the company is found to be emphasizing recruitment of new distributors over the acquisition of product customers, this is where the legitimate MLM model can morph into a genuine pyramid scheme.
Pyramid schemes are illegal as they focus mainly on fast money that is earned by selling the business opportunity that is, selling the opportunity to recruit others into the business instead of selling the opportunity to sell actual products and services. (see article by Cathy Yeatts)
You edited the alert to be misleading. The actual alert that was issued clearly states that an independent rep created and distributed unapproved material in violation of FHTM policy.
tHAT IS ###. fhtm USES THE LOGO IN THE BUSINESS PRESENTATIONS PRODUCED TO ENTICE REPS TO JOIN
Sneaky... you edited the alert to support your complaint against FHTM which is false and misleading. Specifically, "Our right to use DuPont’s name, logo and trademark was revoked because FHTM abused the system by creating and distributing unapproved marketing materials that displayed the DuPont logo." The actual alert that was issued clearly states that is was an independent rep who produced and distributed unapproved information using the DuPont logo in direct violation of FHTM policy. It was NOT FHTM who abused the system but an independent rep who did. FHTM was not to blame in any way for this unfortunate event nor did FHTM lose the right to distribute the products produced by DuPont. So, if you are going to report on the company then get your facts straight and stop being unethical. Your actions only serve to further damage the reliability of this website and cast doubt on all posts entered here.
FHTM is no longer authorized to use the DuPont name, logo, or trademark in any way. FHTM should immediately discontinue the use of any materials containing the DuPont logo. Our right to use DuPont’s name, logo and trademark was revoked because FHTM abused the system by creating and distributing unapproved marketing materials that displayed the DuPont logo.
Key points to consider: Being sued is not proof of guilt nor is it a conviction. The lawsuit has been filed. Anyone can file a lawsuit for any reason.
This is a lawsuit SEEKING class action status. That status has not yet been granted.
It is being pushed by Joe Isaacs who was sued by FHTM for unethical practices and trademark violations.
Joe has recruited the law firm representing media company Gannett. Gannett has a huge financial incentive to stop FHTM because traditional media can't monetize word of mouth marketing the way FHTM does for its vendors.
There is at least one glaring falsehood in the lawsuit that alleges that FHTM reps get paid for recruiting. This is not true. No money is paid for recruiting. Bonuses are paid ONLY when reps sell products or services.
The article uses language that describes FHTM as if the allegations were already proven to be true. This is intentionally misleading and is meant to scare off prospects.
The intent of a lawsuit of this type can be simply to frighten people regardless of validity or success.
Things to think about.
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:
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. § [protected] ("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.