In FHTM "Pyramid Scheme" only a small percentage earn much money

In FHTM "Pyramid Scheme" only a small percentage earn much money

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by STUART WATSON / NewsChannel 36

Bio | Email | Follow: @stuartwcnc

WCNC.com

Posted on December 15, 2010 at 10:05 AM

Updated Wednesday, Dec 15 at 10:10 AM

CHARLOTTE, N.C. -- Fortune Hi-Tech Marketing, Inc., a Lexington, KY multi-level marketing company which one state regulator called a “pyramid promotional scheme,” attracted some well-known names in the Charlotte area as sales reps.

But an “Income Disclosure Statement” posted on the company’s own website shows that in the best case only about five percent of FHTM’S independent sales reps average an annual income over $3,100.

FHTM recruits independent sales representatives in hotel ballrooms, arenas, even churches with a message of prosperity.

In videos posted to websites like YouTube, one recruiter tells his audience, “the Lord wanted you to be here today.”
 
Fortune Hi-Tech Marketing dangled the idea of riches in a desperate economy and tens of thousands took the bait.

Another FHTM rep in a video told his audience, “You’re gonna get paid $100,000 for doing exactly what you’re doing today.”
 
Donna Lewis, the wife of former Bank of America CEO Ken Lewis, signed up. She was introduced to FHTM by veteran Charlotte TV personality Barbara McKay.

“She said, ‘I don’t really need the money but I do want to help,’ ” McKay said.

Ms. Lewis said she joined FHTM to find work for others in what she called “this horrible economy.” 
 
FHTM encourages its independent sales reps in turn to recruit others.

Bob Fitzpatrick, a Charlotte author who operates a website warning of pyramid schemes said, “So there’s a missionary zeal, meantime no one is looking at the actual results.”
 
Before FHTM posted its “Income Disclosure Statement,” actual results were hard to come by.  But now the company’s own figures belie its temptations of riches.

Posted on FHTM’s own website, the statement shows 94.8 percent of all independent sales reps averaged $3,072 a year or less.
 
According to FHTM’S chart, another 4.74 percent of sales reps in a level called “Executive Sales Manager” averaged $31,524 a year.

Less than half a percent of sales reps with the titles “National Sales Manager” and “Presidential Ambassador” earn hundreds of thousands, or in rare cases millions, annually.
 
But there’s a caveat in the reporting.
 
In the paragraphs under the chart, FHTM notes that during the reporting period covered in the chart (January 23, 2009 to January 20, 2010) “…71.85 percent of all active independent representatives earned at least one commission or bonus payment.”

That leaves 28.85 percent of sales reps earning nothing.

Additionally, the statement says the reported average monthly income only includes the months that sales reps received some payment.
 
FHTM has not reported exactly how many independent sales reps have signed on, each paying hundreds of dollars to start, but some top sales reps have put the number at between 100,000 and 200,000.
 
Earlier this year the state Auditor in Montana filed a Cease and Desist Order against FHTM, calling it a “pyramid promotional scheme,” and FHTM agreed to pay almost a million dollars in refunds and fines to resolve the charge.
 
To this day, the Better Business Bureau of Lexington, KY, the company’s home, rates FHTM with a grade of “F.”

 

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