(WHAS11) At 6:00 p.m., we took you inside Kentucky-based Fortune Hi Tech Marketing.
The fast-growing company sells products and services, but former members tell us that they made most of their earnings from recruiting new members.
Fortune is believed to have 200,000 members and revenues of up to $500 million a year.
But the company has also been the target of plenty of complaints, from the Better Business Bureau, to the Kentucky Attorney General’s Office, to consumer protection offices in other states.
By most accounts, Fortune Hi Tech Marketing is thriving.
Its members and recruits fill up hotel meeting rooms, churches and even auditoriums nationwide; thanks largely to get rich pitches and relentless pressure to recruit.
“Don’t leave this business! For your children’s sake! For your wives and husbands,” pleads Fortune founder Paul Orberson in a video.
“Let’s get you in the system right now,” Pentecostal pastor Kevin Mullens said in a recorded sales pitch. “Get your game plan. Get your system. Get your business paid off. How soon can you have 5 to 10 people in your house?”
“They announce it at the meetings,” said a former Fortune Regional Manager that WHAS11 interviewed. “They talk about how much they’ve grown. Right now, I believe it stands at 200,000.”
But there’s also a growing disillusionment among many Fortune members. The former Fortune rep quoted above said she sold her business to join the company.
“It’s not right,” said former Fortune Regional Manager Joseph Isaacs. “There are a lot of people in a recession that are getting burned. There are a lot of people who are getting hurt,” said Isaacs.
Isaacs said most of the money he earned came from recruiting dozens of new members, not from selling products.
“I filed a complaint with the Better Business Bureau of Kentucky. Two weeks later, I got a letter from Fortune telling me I was terminated. I wasn’t wanted as a rep anymore and it told me to go away,” said Isaacs.
They are not alone in their complaints.
North Dakota and Montana both filed Cease and Desist orders against the company.
In Montana, the state auditor describes the company as a “pyramid promotional scheme”, in which most members they contacted earned little or no money.
Fortune had to pay about $1 million as part of a consent agreement reached last month.
Fortune C.E.O. Tom Mills said those incidents were caused by a few people who didn’t understand the business.
“We can’t control everything, though we try, everything that’s said throughout the country,” said Mills.
Mills didn’t tell us much about his company. “I don’t really know the number of active reps in the country and Canada and the United Kingdom,” he said.
But when pressed, Mills named his top selling product. “With Dish, we’re one of their top two or three sellers.”
A letter from Dish’s legal department said the company is not a partner of Dish, but a third party contractor, which anyone can become.
GE, Travelocity and Home Depot have written similar letters denying any direct relationship with Fortune.
Some representatives of Fortune claim sales of $500 million a year. Yet only five dozen people actually work in the rented suite in Lexington, KY which serves as the company’s headquarters.
Employees there aren’t on the phones talking to customers, but to Fortune sales reps from all over the world.
“Kentucky’s our home state and it’s a matter of pride and honor that we stayed here,” Mills said.
The state of Kentucky is now starting to take notice of Fortune, including the Attorney General’s Office.
“We work in conjunction with federal, state and local law enforcement, and with agencies at the federal, state and local level,” Conway said. “We’re aware of the situation. We’re monitoring it. Besides that, I really can’t say much.”
The Better Business Bureau, which gives the company an “F” rating, has received more than 40 recent complaints.
“From all I can tell about this operation, it’s primarily about recruiting other people into the network,” said Louisville BBB President Charlie Mattingly. “So I would say people should be cautious.”
“Can you make money in this business? No doubt about it,” said Joseph Isaacs. “You’ve got to recruit tons and tons and tons of people. If you can’t do that and you want to just sell products, you won’t make very much at all.”
“…this company, you cannot make an income just on your own by selling these items,” said the former rep, who didn’t want to be named.
Former representatives said there are constant recurring fees.
From $299 to sign up, to training costs, to website fees, to mandatory purchases and even charges of up to $30 a month just to get paid.
They quickly add up to several hundred dollars a year. That’s bad news for the growing ranks of the unemployed who turn to Fortune.
“People, they’re having some tough economic times and there is the possibility that if they’re willing to work hard, that they can come with our company and make some money,” said Fortune C.E.O. Mills.
“Most people that become involved go broke,” said Isaacs.
But a handful of top Fortune managers are also faring well; earning up to $480 for each new recruit who signs up. Former reps told us that National Sales Managers can earn tens of thousands of dollars on a good night.
“The problem with pyramid plans is that the people on the front-end make money, but the larger number of people on the back-end always lose money,” said Mattingly.
Only time will tell if Fortune will face more governmental actions or keep on growing.
“My goal, obviously, would be to be the biggest, best network marketing company ever,” said Tom Mills.