a new scam – American Direct, Inc.
We are slowly realizing all of the perks that come with living in a working-class neighborhood. While I don’t think the whole Universal Promotions/Travel Universal thing was tied to our zip code (I think I did actually fill something out online), we were contacted a few months back about a new promotion a company was having. The company is called American Direct, Inc. and they told me they were just opening their store in Fairfield and were having a promotion that included a drawing for a new truck or $10,000 cash. I thought that was kind of interesting, but wary of scams after our earlier experience, I didn’t really pay them much attention. They said they were going to ship me a key to try out in the truck and I’ll I’d have to do is show up at one of their appointments to test my key to see if I had won. I said I’d call them to set one up and promptly forgot about it. When the key came I threw it away.
Well, this past Monday I got a call back from the people at American Direct. This time the person’s name was LeAnn (probably not her real name). She said they were “sweetening” the deal to encourage the remaining few people who had keys to come by: they’d give me a $500 shopping spree just for showing up. I asked if they had an appointment in the evening so it wouldn’t really disrupt our work and stuff and they said yes, so I set up an appointment Thursday night at 6:30. They wouldn’t tell me anything about their company and when I asked if they had a website they said it wasn’t accessible unless you had the password. All of these things were making me wary, but I figured I could avoid giving them anything but my time and was determined to simply walk out if there was a problem.
So, along came Thursday night and Debi and I made our way to 325 Commercial Drive in Fairfield, OH. The building is located in a business park. It was a single-storied, stripmall style building where you’d expect to find a scam. As we walked in, our fears were confirmed. The place had clearly been in business for quite a while, which means I had already uncovered their first lie – this was not a grand opening and was not some special promotion. This is how they lure in the unsuspecting and prey on them. We arrived a little late and they were already taking all of the unwitting participants into the back room to try their key in the truck. Since I had to get another copy of my key (I threw the original away), I had to register and stayed behind for a few minutes. While one of the receptionists logged me in, I pulled out my phone and tried to secretively snap a few photos. When we got our phones I didn’t think I’d ever use the photo feature, but I occasionally find it very useful. I snapped these two photos before I went back to the “special rooms”:
The first one is just a sample of the wall decorations. They had these all over the walls in the front room. Seriously, there must have been 200 of them or so. Poor Roy Sipe… He actually looks happy. I think the U.S. flag in the background is a good touch; I’m sure it has great appeal for the demographic they target.
This second one was the real kicker. In case you can’t read it very well it says, “Due to the confidential nature of our business ALL RECORDING OR PHOTOGRAPHIC DEVICES ARE PROHIBITED in this building.” Any honest company would not have this type of sign posted, unless they are literally trying to protect trade secrets (e.g., the Toyota plant my father-in-law visited in Japan didn’t allow photography of the factory floor). Clearly American Direct, Incorporated has something to hide – their dishonest business practices.
Once I had finished “registering,” I walked back to where all the other victims of the scam were and caught up to Debi, who whispered under her breath, “Look at the demographics here.” I hadn’t had time to do that until now and when I did, it was telling. There were a total of 18 “marks” or victims, and of those, all but two were working class – Debi and I. There were a lot of old, deteriorating t-shirts; lots of hairsprayed and oily, stringy hair; stained jeans; and a lot of poorly behaved children. Don’t get me wrong, they are all nice people; we talked to a bunch of them and they were very kind. But you could tell they weren’t coming down from West Chester or stopping by from Wyoming or Hyde Park. These are the type of people who live in our condominium complex – blue collar, working class. I don’t claim to be wealthy – au contrair, I’m a poor graduate student and probably make a lot less than a lot of the people who were there. But there was a clear educational difference, which I’ll touch on a bit more later.
Anyway, we all tried our key in the truck to no avail. No one won the truck or cash. We were then herded like mindless, unwitting sheep into the “sales pitch” room. Our salesperson, an African American, former military guy I’ll call “Asswipe” (’cause I forgot his name) was telling jokes and working his angles the whole time. Once we were all settled, he started in on his pitch. I have to admit the person who called me didn’t say how long this would take, but I was hoping it wouldn’t be very long as I had other things I wanted to do that night. Well, I’m beginning to realize that length of time is an important factor in these scams. Rather than jump right into how much money they want to take from you, they start by “building relationships of trust” (an old phrase from when I sold Mormonism door-to-door in Costa Rica). Asswipe pretended to teach us all about how we were mistreated by retailers like Sam’s Club and Wal-Mart (again, think demographics here). He talked about how much they mark-up the merchandise they sell to us. I particularly enjoyed his discussion of Sam Walton’s personal wealth and his claim that it came directly from his marking up of products, which was one of the first places where I shook my head in disagreement (exploitation, exploitation, exploitation…).
The really scary thing about the presentation was that Asswipe was so ebullient and charismatic that 16 and a 1/2 of the people in the room were really getting into his presentation (Debi did half the time). When he would ask, “Who cares about their money?” Everyone would answer in unison, “We do!” And when he’d ask, “How many people agree with that,” Everyone would raise their hands. For some reason I just couldn’t get into his pitch.
I was, however, quite impressed by the use of manipulative techniques. He spent the first hour or so pretending to educate the people. What better way to build confidence in his marks than to actually make them feel like they are more educated now than when they walked in? Quite a brilliant tactic, actually. I also liked how he directly referred to other, classic scams (e.g., timeshares, Amway, etc) as scams. He mad fun of those other scams and spoke directly to the fears of the marks he had in front of him. He said stuff like, “How many of you, on the way here, were thinking, ‘It doesn’t matter what they say, I’m not buying anything’?” Again, 16 hands went up. He then tried to alleviate their concerns by saying, “This is not a scam.”
So, what is the scam they are trying to pull off at American Direct, Incorporated? They claim they can save you money by helping you buy the merchandise you would by at a retailer direct from the factory, saving the retailer’s markup. One example Asswipe used was Blue Blocker sunglasses (which I had never heard of). He claimed the cost to make them was $0.95. He then said the cheapest you could buy them retail was $9.95 from Sam’s Club and that most places sold them for anywhere from $14.95-$49.95. He used several additional examples, including some cheap ass knives and grandfather clocks, showing the markups on them. In short, he claimed you could save money by affiliating with American Direct, Inc. and buying stuff direct from the factory.
Of course that seems like a good idea. The problem, however, is that nothing is ever that easy. It’s not like the people at American Direct, Inc. are just going to sell you a $5.00 guide to buying factory direct or anything; they have a different goal. I think the goal of American Direct, Inc. is best seen in something Asswipe kept saying. He was really fond of asking, “What are retailers in business to do?” Everyone in the room was smart enough to realize the answer was, “Make money!” But the question Asswipe never asked was, “And what is American Direct, Inc. in business to do?” The response, of course, is, “To make money!”
So, how does American Direct, Inc. profit from “helping” people buying factory direct? There are three clear ways they do. First, they charge a 10% handling charge on everything you purchase from the factory through them. That’s in addition to the shipping you pay for. So, even though they claim to be getting rid of the middleman, in reality they become the middleman. Second, they charge a one-time lifetime membership fee of… get this: $1,999.00. Yep, that’s right, that’s almost $2,000.00. On top of that, and yes this makes no sense, you have to pay an annual renewal fee of $199.00. So, the one-time, lifetime membership fee isn’t the only fee – you have to pay $200 per year to stay a member.
Let me recap:
- 10% markup on everything you buy (in addition to shipping)
- $2,000.00 up front to join
- $200 per year to stay a member
And they claim you’ll save money by joining. Well, let’s think about that… While we were sitting in the “sales” room I saw at least three other sales people walking around, sitting on their thumbs, studying the marks, etc. There were also two secretaries/receptionists up front. That makes for at least 6 employees, if you include asswipe, all who take home paychecks. Hmmm… So, what they really mean with the phrase “saving you money” is “making them money.”
I particularly loved it when he said that they are not in direct competition with retailers. He even said that they don’t want to take all of the retailers’ customers away, which didn’t make any sense to me. If they really had a good deal for people and wanted to help them, they’d want everyone to convert. Truth be told, if too many people find out about this scam, they’d be run out of town. So, they don’t want too many people to know about it. In saying this, Asswipe actually claimed that everyone in Cincinnati was given a chance to participate in the program, but that they only contacted 10% of the population at a given time and that they dialed numbers randomly. Yeah, right. Remember my description of the demographics of the people there?
Oh, and about those demographics… At one point, in talking about the wealth of the Walton family, Asswipe said they were worth about $27 billion. He then asked if anyone knew how much a billion is. Two of the fathers in the room said, and I’m not making this up, “One hundred million?” I’m not sure if I was more shocked or appalled. Asswipe was kind enough to correct them, but I thought that was particularly telling. Asswipe really wanted these people to feel special, thus the, “We only invite 10% of the people around here to participate.” American Direct, Inc. is likely targeting people in lower-income and working class neighborhoods. They probably think they are less likely to see through the program and recognize the scam that it is. And because Debi and I are poor and bought our condo as poor graduate students we fall in the right zip code!
It was pretty clear from the get go that I was going to be the group’s only skeptic. I didn’t buy into the charisma and didn’t answer his questions. I didn’t raise my hand. In fact, I spent most of the time writing notes and doing ethnographic field work. But there were a few points when I had to pipe up and question his bullshit. For instance, he kept insisting that we are “forced” to buy retail. Everyone else agreed and I said, “No.” He said, “What do you mean no. You have to.” I said, “You can make it yourself.” To which he responded, “Yeah, good luck with that.”
Later when he insisted that retailers are a monopoly I had to pipe up again. I said, “No, retailers are not a monopoly and they can’t be due to anti-trust laws in the U.S. What’s more, because they are not a monopoly and compete for our money, that actually drives prices down.” He said, “Look, I took an economics class in college. I know how this stuff works…” I cocked an eyebrow at him as he continued, angrily, “I don’t care if you agree with me or not. The point is, I’m here to help you save money.” He got really angry and intentionally tried to avoid talking to me the rest of the time. His anger boiled over when he asked the people in the room if they thought $199 was too much to spend per year to buy factory direct. Everyone else said no, but I said yes. His response, “You think that’s too much to spend to buy factory direct?” I nodded my head. Then he said, “Then leave. You can leave right now.” I said, “I want to see how much the one time membership fee is.” He responded, “Why? It doesn’t matter to you. You don’t want to pay the $199 so why do you care?” I said, “I just want to see. So, do go on.” I think he was pretty upset, but I really didn’t care.
It was at about this point that the sales pitch ended. They then took us out of the “sales” room, divided us up into individual couples, and brought in “the closers.” I loved they way the closers worked. Rather than ask if we wanted to buy a membership or not – they went straight to, “So, how many memberships do you want, 2 or 4?” What a manipulative scheme. The whole thing is designed to manipulate, pressure, and deceive. It was absolutely appalling! We said we weren’t interested and the guy tried for a while to convince us we should be, but he didn’t get anywhere.
He then said he was sorry we weren’t interested, but that they were going to give us our $500 gift certificate and a travel voucher just for coming. Woohoo! When I got home I checked out the gift certificate and voucher in detail. The gift certificate claims to give you $500 worth of cash on this website: www.KEShoppingSpree.com. Since I didn’t use my code, you can use it to get into the site: KE0293712. KEShoppingSpree.com is another scam site. Yep, they rewarded our attendance at a scam presentation with an invitation to another scam. You can, in fact, buy shit on the website, but they charge you exorbitant shipping and handling fees (e.g., $15.00 to ship you an XBox game). I looked through the site and compared some of the prices to actual retail prices. They have the XBox game “The Hobbit” listed at $49.95 plus $14.95 shipping and handling. You can buy it at Wal-Mart right now for $19.95 and can probably get it used on Half.com for about $8.00. All of the kitsch on the site is set up this way. The price they give is way, way over retail. Then the shipping and handling charge is about what you’d pay retail. In short, the $500 gift certificate is worth a whopping total of $0.00, and is more likely to cost you money than save you money! My favorite part about this is that on the back of the voucher it has directions that tell you to enter the URL directly into your browser and not to use Google to search for it. Guess why? ‘Cause now that I’ve posted that it’s a scam, Google will return my URL too ;).
As for the travel voucher… Remember how they talked about timeshares being a scam? Yeah, well, it’s a travel voucher that goes through a timeshare sales company. You may get 2 nights free in a hotel, but you have to go through a timeshare pitch. What absolute and total assholes! American Direct, Inc. is a scam. And when we didn’t buy their scam, they tried to reward us with two more scams. All told, we threw away 2 hours of our life to American Direct, Incorporated. Assholes!
A couple of things I didn’t mention earlier but are worth touching on:
- Asswipe claimed he wasn’t a salesman but was a “consumer consultant.” Consumer consultant my ass!
- Asswipe intentionally exaggerated the differences between factory direct and retail by not including shipping and handling costs, which you’ll pay no matter what; he just reported the manufacturing cost.
- When Asswipe mentioned the 10% markup fee, he glossed over it as though it wasn’t really anything.
- Most factories don’t sell directly to consumers because it is too costly for them to manage the shipping, ordering etc. They use distributors. What do you think American Direct, Inc. is? You still don’t buy factory direct, you buy through American Direct, who is just a distributor/retailer.
- At one point Asswipe said, “There is no catch.” That was before he talked about the one time fee… ;)
- Asswipe mentioned a lot of well-known manufacturer’s names to make people feel like they would be buying namebrand merchandise. I’d bet my left kidney most of the shit they let you buy through them is kitsch and knockoffs.
- In a sheet they had us fill out, one of the things listed that you could buy factory direct was, and I’m not making this up, “psychic readings.” Debi and I laughed about that one for about 5 minutes straight. We almost put it down just to see how much money Asswipe thought we could save on it.
- If everyone who attended that night had paid the fee, that would have been about $20,000 (couples only pay one fee, not two). That’s probably about half the amount they pay one of the sales reps per year…
There’s another important thing to keep in mind here about why this program is a scam. I’m guessing most of the people who pay the fees never buy anything through American Direct, Inc. They get lulled in by the slick sales pitch and the deception, but then realize it was a mistake and go back to shopping like everyone else does – retail or wholesale. Keep in mind that Bill Gates doesn’t shop through American Direct, Inc. He shops retail, just like everyone else.
Anyway, I’ve come to love our zip code. It really brings in the scams. This is my new favorite, replacing the bi-annual Jesus Prayer Rug from St. Matthews’ Churches. Why? Well, it’s clearly marketed towards working class people and it really will bend you over and fuck you long and hard.
A couple lessons learned about scams:
- If they claim it is not a scam, it is. Any company that has to try to distance themselves from a scam is a scam.
- If they are trying to sell you something and won’t let you take pictures of them trying to sell it to you, it’s a scam.
- If the person trying to sell you the scam says they are not a salesperson, they are and it’s a scam.
- If they mention other scams or make fun them, it’s a scam.
Update 6/5/2006:
I just realized I should mention this company can also be checked out via the Better Business Bureau of Cincinnati. You can see a report on them here. I’m guessing the low number of complaints is the result of the small number of people who fall for the scam and not that the company is a nice one. Just my two bits, though… Also, if they contact you and you’re on the “Do Not Call” registry for telemarketers, you can actually lodge a complaint against the company with the BBB.
Update 6/20/2006:
John Matarese from Channel 9 interviewed me about my experience. You can see the clip below:
Update 7/13/2006:
Amazingly, I just got another call from American Direct, Inc. inviting me to come visit their recently opened store. The call came at 7:25 pm, on 7/13/2006. The number they called from was 1-270-762-9905. The woman on the phone said (and I’m paraphrasing), “Hi. We’ve just recently opened a store in your area and would like to invite you to come visit it. We’ll send you an invitation with a key in it. If you’re key turns on the truck when you get here, you can drive the truck home or win $10,000 cash. Have you ever heard of American Direct, Inc. before?” I, of course, said, “Yes, I’ve been to one of your presentations.” To which she quickly replied, “Oh, okay, I hope you enjoyed your presentation.”
Hmmm… Recently opened store my ass! And do you really think they call people randomly? I’ve received two calls in the course of just a few months. They are clearly targeting people living in working class neighborhoods. Bastards!
June 2008: They are still calling!! Same “win a Truck bait”. I live in Austin, Texas in an upper middle class neighborhood. I told the lady i had heard about American Direct (actually i knew about Direct Buy – same sort of scam) and told her she better be looking for a new job because everyone now knew they were a scam outfit. GREAT blog – GREAT info!!
Just got a call today here in Austin, TX. Same pitch as previously reported, including “just opened a location in your area” which is great considering you have reports that are 2 years old from Austin. I just told them not interested and hung up. then googled them. Glad I didn’t waste my time.
Hi Ryan,
A search for information on buying factory direct led me to your blog. We need to make some major purchases over the next year or so and hoped to save some money buying directly from the manufacturer. The list by priority includes new furnace – new mattress set – windows for the entire house – sofa bed – stove/range – and kitchen floor covering.
To give away $2200 just to find out we get nothing in return except a useless membership would be a significant hardship. I’ve been searching to see what’s out there to save money yet purchase good, reliable, durable and long lasting the tests of time merchandise. It’s very difficult to make an informed decision when folks like Tracy from 6/12/06, Patrick from 9/22/06, Jason from 5/16/07, and Penny from 5/18/07 refuse to provide credible information to substantiate their claim that they are satisfied customers of American Direct, Inc. I hoped that Joe from 10/11/06 would have made progress on his quest to utilize his membership and report back. Since his last post was 10/31/06 maybe he just gave up and requested a refund or decided to let dogs lie and all that. Did Michael Rocker from 2/16/07 ever send you the copy of his contract for your review? Just curious what the contract provides in the way of their actual guarantee.
Using the $2200 ourselves, taking care to research and wait for sales, we could purchase the mattress set, sofa bed and stove instead of a membership. The furnace will cost $3400 and we haven’t even tried to price replacing 18 all natural wood windows for this 110 year old house. Thankfully, the original windows use a chain link instead of rope for the pulley. The problem with the windows is that the wood has warped and multiple cracks around the wood frame, between the wall and the wood frame, of each window means it is far from energy efficient not to mention the dust and bugs that can sneak into the house. This house was made to last but is in need of some major maintenance and repairs. The furnace is the original that was converted from coal to gas. The kitchen flooring is considered a luxury when looking at the big picture of things. It is still in very good condition; fully intact and functional with some pitting and yellowing but for linoleum that’s probably over 40 years old it’s not so bad.
Because the furnace and windows require on-site installation how would American Direct, Inc. be able to make guarantees on services provided by outsourcing? Just one more of the multiple questions we all have and for which we can’t seem to get an honest, forthright and credible answer.
I’ll keep searching on my quest to find good values and reasonable prices for the necessary items. Hopefully, I can avoid the Tracy’s, Jason’s, Penny’s, and Patrick’s who are bent on bad attitudes instead of helping all of us who truly want to make an informed decision based on facts not fiction or fantasy. We all agree that salespeople can be fast talkers and pushy even when the product is good, that’s why I rely on solid info with actual facts and figures before spending a lot of money. These are purchases I hopefully won’t make again in this lifetime!
Thank you for taking the time to share your experience and allowing others to share as well so we can see the big picture. Making an informed decision is too important.
Hi Fran,
I never did hear back from Michael Rocker or any of the others.
As per American Direct providing on-site installation, I don’t think they did stuff like that, but I could be wrong.
Glad you find the site helpful.
Best,
Ryan
They’ve moved into Austin, Texas. I just got at least one phone call from them. The phone rang twice before and left no message. I don’t have Caller ID, so it might have been someone else.
These kinds of businesses (and I use that term loosely) do prey on those who are less astute. If you could save 20% on every purchase you made through them, you would have to spend at least $11,000 in the first year to break even. I don’t spend that much on groceries and certainly don’t spend that much on home furnishings, office supplies, etc.
Real businesses are in business to make money. Legitimate manufacturers deal with wholesalers or large retailers. Most have agreements with wholesalers that prevent them from selling direct to preserve the wholesaler’s ability to sell. The idea you can save significantly with a “club” is very unlikely.
This pitch is pretty old. I remember a door-to-door solicitation when I was in college (living in an old blue-collar neighborhood in an efficiency apartment) that was pretty much the same deal promoted with colorful graphics in a looseleaf notebook presentation. Even then, I knew enough to know it was a bad deal.
Any ideas on how to shut these scum down?
Hi David,
The best suggestion I have is to file a complaint with the Better Business Bureau in your area or a state regulatory agency (contact your local department of commerce, they may have some numbers for you) and see if you can file a complaint. That’s about all we can do, unfortunately.
Best,
Ryan
I work for the call center in Murray,Ky. I’m one of the people who keep calling over and over. Many of you have probably spoken to me. I know Clayton very well and it is his real name, he’s a very nice guy. The business is not a scam, however, the promotion is another thing. You’ll get a vacation. The truck is given away in a drawing once a year, the keys won’t work. We cut them in our call center. As for the do not call list… we are unaffected by that. We have folders full of numbers, (no names or addresses) that are computer generated (therefore random #’s) they are listed in order. We call them all, then we start over and over and over. The pitch is printed up by a lawyer,so it’s legal, barely, but still legal. And since we aren’t selling anything over the phone, the DNC list does not apply. My advice to you that do not want the repeated, and they will be repeated, is not to simply say “not interested” and hang up. you won’t be removed from our list. Ask the person nicely to remove your # from our call list. Don’t piss them off or your number most likely will stay there. We have a lot of teens working there, as young as 14-15. Sorry for the constant calling, we’re just doing our job. Remember, if you just hang up, we can’t take your number off. I use my better judgement and scratch a lot of numbers off just being nice. not everyone does that.
Hi Ammi,
Thanks for posting. Your advice is pretty good and it’s nice of you to give it.
That said, I have to wonder if your company really is not obligated to follow the Do Not Call Registry. I just read through the FAQ on their website (http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt107.shtm) and your company is definitely calling people trying to sell them something, even if they purchase it later and not on the phone.
For anyone who follows this website, here’s what I suggest: First, register your phone number with the Do Not Call Registry. Then, rather than just file a complaint with the Better Business Bureau, the next time you get a call from American Direct, Inc., write down the name of the company and caller, write down the time they called, write down what they said, and get their contact information https://complaints.donotcall.gov/complaint/complaintcheck.aspx?panel=2). Then go file a Do Not Call complaint https://complaints.donotcall.gov/complaint/complaintcheck.aspx?panel=2). Several thousand Do Not Call complaints will get this company investigated. Each violation is a fine of $11,000. A few hundred of those and American Direct, Inc. will be out of business.
I hate to turn your offer of good will into a tool for ruining your company, Ammi, but it may just work.
Best,
Ryan
I understand your frustrations, but you have no idea how many people have asked me for the same information that you have asked people to get. It won’t work. When anyone asks for my info, I gladly give it to them, tell them to have a nice day, and go to the next # on my list. All of us have heard the ‘I’m on the do not call list’ As I stated before, it’s a fine line, but we are on the legal side of it. We have a pitch drawn up by a lawyer that’s inside the legal bounds. We are only “advertising our store”. If you will just ask to be taken off the list, most of us do that without a problem. It’s when we get cussed out and phones breaking our eardrums as the slam down that those numbers stay on the list. We are human, not robots. We have feelings. Just take 15 seconds of your time to be nice, be polite and I can just about guarantee we’ll leave you alone. Oh, one more thing… We are REQUIRED to take you off of our list if you’ve been to the store before. Tell them you went and saw the presentation before and you’re not interested. That’s the fastest way to come off the list. We aren’t supposed to send out more than one invite to a household. The drawing in Austin for the truck and prizes is in a couple weeks. If you do want a shot, go out to the presentation, you don’t have to accept the membership in order to be put in the drawing. The reason you “have to be on time to be registered in the bonus drawing for $1000. in gas” is that’s how we know who came to the showroom for the presentation. They are the ones who have a shot at the truck and prizes, so if you went, you do have a chance.
Ammi, makes sense. I think I’m still going to encourage people to file complaints with the Do Not Call Registry, but they can also just ask to be taken off your list. You sound like a very nice, reasonable person. Why are you working at American Direct?
-Ryan
Honestly, I needed a job, they were hiring and the pay is okay for this area. I average about $8-9/hour, which is good for Murray. However, we have closed our Ohio markets, at least for a while. Be aware of another “new store” in the area with a different name, same location. That’s probably what will happen. By the way, if you need them, the owners are Paul Guy (here in Murray) and Scott? Scarbrough (in Ohio). I enjoyed reading your blog, it gives me different insight to the people I’ve been calling and hopefully gives them more insight to us. It’s not personal, so sorry, it’s just one of the larger jobs located in a town that’s overrun by college kids and retirees.
Oh my..i’m only 17 years old and only a senior in high school, but over the years i have found that my parents are prime victoms of these things. I know they are scams, and I tell them that they are scams and they never believe me..We live in central Texas and so far, they have bought a $9-12 thousand dollar lot in brownsville (got a $500 walmart shopping spree with this one)..and to my huge surprise, we have NEVER been back to visit our tiny patch of land that will someday be in the price range of modern day orange county real estate. Also they have not only fallen for 1, BUT TWO timeshares (one for anywhere in the world the other for only a few diff. places in florida and we’ve been to ONE of them ONCE)(by the way the 2 free nights in a hotel they gave us for the first timeshare was to a microtell inn..and i dont know if it was just this one in san antonio but it was so bad that my mattress fell through the bed and we got up and left in the middle of the night so they gave us another free night in galveston that we never used), and a Lonestar direct buying service (like ADI, they cancelled this one shortly after signing up) and I may be mistaken, but it always seems like I’m smarter than the people selling to my parents (and smarter than my parents in some ways)..and I always tend to drift them away but the salesperson always brings them back to the sale and they fall for it..So here recently they were out for an entire day and weren’t answering their phones and got home and told me about the key they received in the mail to go to austin and try to win a truck and i thought to myself ok hopefully they know by now that they shouldn’t be doing this but they did and they fell for the ADI thing (because its going to save them over $900 on the Omega watch i’ve always wanted)..
i’m dissapointed in them..i have asked why save $900 when you could have saved $2000!? and they just get mad and tell me to go away..We live in a really nice newly-built suburb, and I love my parents to death, but I hate to say that they are the people you see in those trailors in the nascar t-shirts and jeans that are 5000 years old..oh well i guess i’ll just have to learn from their mistakes and try not to make my own in the future..
ps: I’m getting the Omega watch as my graduation present/class ring type thing..now after reading this all I have to hope is that its not made in China!!
I just got a call from American Direct. Thanks so much for sharing your story with us, because now I know what they’re up to. You made one mistake though that hurts your credibility. It was the cheap swipe at the LDS church. I’ve never heard anyone use the phrase “Building Relationships of Trust” as a prelude to “selling” people the gospel, although that sounds like a pretty good idea. I also kind of doubt you went to Costa Rica. Anyway, your statement was an asswipe thing to do, since the rest of what you had to say was spot on. In a way this makes you the moral equivalent of an American Direct consultant.
Um, “The Skeptic,” did you serve an LDS Mission in the 1990s? That phrase is literally right out of the Missionary Guide – they recommended that you “build relationships of trust” before trying to teach people about Mormonism. The new manuals may not say it, but the old ones did (I still have the manuals; if you really don’t believe me I guess I could scan them in to show you). It was part of the “commitment pattern.” You’re welcome to doubt my serving a Mormon mission, but the thousands of pictures of me in Costa Rica with my name tag on sitting next to investigators and my detailed journal would disagree with you.
As for that being an “asswipe” thing to do, you’re welcome to your opinion. But you should also keep in mind that I have to put things in the framework that makes sense to me. The Mormon missionary framework is very familiar to me, so it made sense to me to put what they did in that framework.
As for that reducing me to the moral equivalent of an American Direct consultant, well, I guess you can think that way, but I fail to see the connection. That’s also very denigrating and I’m not sure why you felt like you had to include this after I went to the trouble to tell people about my experience. Is this how you return all favors – thanks for all your help and f*ck you!?! Not really the moral high road…
Ok, I believe you about Costa Rica. You’re right, I guess I went way overboard with the moral equivalent statement, but it irked me that you had to work your swipe into an otherwise well-founded and brilliant report about the American Direct scam.
Oh yeah … I’m sorry – I didn’t mean to be so denigrating and see your point about returning favors.
The Skeptic, thank you. You’re right that a swipe at Mormonism is unnecessary in my post. At the same time, as I suggested above, the American Direct pitch did seem similar to me: get friendly with people before you try to persuade them. That’s what I was taught to do as a missionary and so when I saw the salesman doing it, it triggered memories. It’s not necessarily a bad thing to do, it just seems a bit sneaky. But, I guess if you’re goal is to sell something, sneaky is as sneaky does.
Again, thank you for the apology.
that is …. “and I see your point…”
Taking that a bit further … many relationships are first built on establishing some degree of trust. From your description, it’s easy to picture how American Direct attempts to build trust and soften their marks for later exploitation. This seems to be all too common with people in sales, marketing, politics, stocks, banking, and, yes, with misguided purveyors of faith.
Once, when I was in the military, I agreed during a telemarketing call for a vacuum cleaner “representative” to come to our home to demonstrate his product. The con was that we would receive a new 35mm camera worth $200.00 at the end of the presentation, whether we purchased the product or not. I was deep into photography and thought it would be great to pick up a new camera for just watching a presentation about a vacuum cleaner that I had no intent to buy.
When the big night came (for receiving my new camera), my wife and I sat through the hour long sales pitch, learning more about vacuums than we cared to know. The salesman was talking up a storm like he was our best friend. He thought that he had us hooked because my wife acted like she liked the vacuum and I kept nodding politely. At the end, he tried to close the sale with pen in hand, refusing to tell us the price of product, which we later found was over $1,200.00 (1986). When I said, “No thank you, we’re not interested,” he went completely silent and started packing his things like he was offended. (I think I was supposed to beg him to sell me the vacuum at this point.)
As he was leaving, it seemed like he had forgotten to give me my camera, so I followed him out the front door to where his car was parked in the driveway. When he opened his trunk to stow the vacuum, I asked, “Hey, what about the camera?” He groped around in the trunk and came out with a clear plastic bag with something heavy inside. He then threw it at me with an underhanded pitch and said, “Here’s your damn camera.” I caught it a few inches from my face and said, “Thank you, you’re very lucky I caught that.” Really, it was all I could do not to make this guy eat the camera after he tossed it at my face with no warning in the dark. (I had him bested by several inches in height and maybe 85 pounds of muscle and special tactical operations training and experience.)
When I got back in the house I discovered that my prize was a non-functional 35mm replica worth nothing more than the value of the lead bars inside the plastic camera housing. This taught me a long lasting lesson about the value of the free stuff you are supposed to get for just attending a sales presentation.
I just wanted to say thanks for the heads ups, I got a call from the loonies today, sending me a KEY. So I sent their info to a couple of local law enforcement offices, DoNotCall.gov complaint and like you I will tell all about these scams. Oh just a note if you get tired of strange (previous) writers tell them their friends on LiveLeak are looking for them and they will go away faster. Great Story and keep it going.
i think you shouldnt dog us until you have went to our store and seen for yourself. we dont sell over the phone so we can call you even if you are on the do not call list., lol im so tired of hearing about this do not call list, its rather funny to hear people threaten us like they do. dont they know we are working for someone else and we could care less. we just need a paycheck. at least we are not sitting home on our butts doing nothing to make a living . alot of us have families. yes there are high school and college kids working there to. they need money to. if ya dont want the call ask to be taken off our list. and you can do that in a polite way. no need to get all hateful. we call being nice to you, if you dont want what we have to offer , just say take me off the list please it is not a scam we have alot of very satisfied customers that have saved alot of money, we relize its not for everyone. well thats all i have to say today.thanks for calling us loonies , lol i feel alittle loonie at times !!!!!
Unfortunately, my husband and I attended one of these meetings. It was prior to your blog and the interview done in Cincinnati and we were new to the area. I was the only one working at the time and we have two kids and during the meeting they were acting up reallllly bad so we weren’t really paying that close of attention. What we did see, I will have to admit, we were impressed by the amount of savings and the quality of the items. A lot of the people there were as well as about 10 people stayed behind to join the club. We did start the membership and after about 4 months, we realized that it was a scam. They said to call and give a description of the item that you are looking for and they can get it cheaper than you can get it at the store. Everytime we called they told us they couldn’t get the brand or item we were looking for and the only thing we got out of it was a coupon book that helped us save a few bucks on groceries, but it wasn’t enough to recoup the cost of the membership.
My husband called to cancel the membership and we thought all was well and good until I got a call the other day from a collection agency. They told me to pay up or they would take us to court or they would garnish our wages. I told them my husband had cancelled the membership and the guy on the phone said, and I quote, “Obviously not or I wouldn’t have a record of this debt.” This is when I started doing some extensive research and they are not registered with the BBB of Ohio and I am not sure if it’s due to the number of complaints or if they just haven’t registered period.
Good news though, according to the BBB website, they have reimbursed membership fees to those that have complained and sometimes will let clients opt out of the membership by paying a cancellation fee of $199, which is much better than having to pay $2000. I am going to call the collection agency first thing tomorrow to tell them that I am lodging a complaint and that I am disbuting the debt until my complaint is resolved. Wish me luck!!!
Hi Scammed,
Sorry you didn’t find this site before you signed up. They really aren’t a nice company. I hope it works out for you.
Best,
Ryan
SCAMMED ,I am sorry all that happened to you.i hear the stores in columbus and cinn. have shut down but there is one in Austin TX.I wonder how long that store will last. HMMM, It dont sound good.
Their office in Austin is 4616 West Howard Lane, Building 1,Suite 140. I attended one of their presentations and stayed long enough to see the $2000 membership fee. The whole thing is presented the same way you would expect a scam to be presented. It’s the kind of thing you would see exposed on 60 minutes. It looked like most of the people they invited were elderly. Very creepy.
I read through your entire blog and found it interesting that not much has changed in two years with this scam, even down to the description of “Asswipe” or in this case Mr. Hamilton. My wife and I attended this just to be curious and after an hour and half we still never got to the one time fee and left when we couldn’t get and answer. They shifted from being very nice to being extremely rude. The whole setup is a scam and you can tell as soon as you walk into the place on Howard Lane in Austin. I really enjoyed your post and how accurate it was. I agree with Texan’s post….very creepy.
You’d think they would learn… But, I guess there are still people joining, so they don’t have to learn. Sad…
Thanks for posting!
maybe they should be reported to the better buisness bureau.
or someone should sue them.they havent called me, but if they do ill tell them no thank you and dont call back !!!!
We actually fell for their bullshit in October of 2005. And after our 3-day “grace period” was over- yes, they only give you 3 days to get out of your contract- I fell seriously ill, and haven’t worked since.This was in January of 2006. We’ve changed phone numbers and registered on the Do Not Call Registry. They are threatening to sue us for breach of contract for non-payment. BULLSHIT, they get their money the same time we pay rent. I’ve hired 3 attorneys to help us fight this. Their 3-day “grace period” is against the law in Ohio according to Legal Counsel. Who is going to change their mind that quickly? An if you were, why’d you sign it to begin with?
We don’t have a problem paying them, just with them threatening for no reason.
Hi Wendy,
Unfortunate situation. I can’t say I’m surprised by American Direct – they are all about the money.
I hope it works out for you.
yea its all about the money for sure. ive talked to several people who went there , they said it lasted way over the hour they said it would take. if you go and arent sure about it dont join.but i hear it is a one time offer. good luck to all you people who go there. me myself will not be going. you will only end up with a 3 day 2 night vacation. accomadations only, you have to pay for your airfare, or gas to get there.un less you are refurnishing a house its not worth the membership fees i was told. be careful!!!
Most of these storys and opinions are very one sided. I understand them to a point because if your not a member and have not made purchases it’s difficult to understand the concept and see the saving’s. I have been a member for a little over a year now. I’ve only made one purchase which was a King size bed, I saved a little over 1400 on the bed. I have not saved my 1999 dollars yet but Ive only made one purchase, Im only 28 and I still rent so I’ll be using this program for a long time once I become a home owner. I understand what some people are saying but, the meeting I went to had about 14 or 15 people and I saw older people and people my age. Im sure this program isn’t for everyone, but Im happy I attended and that Im a member. Im sorry you didn’t see the value or couldn’t afford it at that time. Best of luck.
carson, i am so glad you posted your experience with american direct. im glad you are a happy memeber.so many people are. its not for everyone, some people who go to the meetings are just trying to win the truck or cash.and they will be given away!!! of course most people get the vacation. but its a very good program for people just starting out who will be purchasing alot of stuff to furnish or fix up thier home. i hope you continue to be satisfied with american direct.
Unfortunately, I did not find your blog before we got suckered in to the American Direct membership. We paid them $1699 ($300 discount for paying on the spot). This was on a Saturday (November 1, 2008). I did a Google search but kept coming up with a lot of junk not related to American Direct. Since they are closed Sunday thru Tuesday, the 3 day cancelation period expired before I even had a chance to test the pricing. I did, however, test the pricing the next week. At our presentation, the speaker stressed the fact all we had to do was go shopping, gather certain information and then communicate that info back to American Direct. Like a few of the responses I read, I wanted to believe this would be good for us.
We did not fall for the stupid key in the ignition lure. We genuinely wanted to get the discounts for home improvement and building materials. There was one response (from Amy?) and she claims she saved some $12,000 on her cabinets and flooring. Well, if that is the case, you can’t prove it by me. I wanted to know what kind of prices we would be looking at when we build next year so I requested pricing on some Armstrong flooring. I did this via their Internet online form. A few days later I got an email response telling me that remodeling items are handled DIFFERENTLY. I had to make an appointment with ONE supplier in Austin. Problem is we live in San Antonio. The travel time is about 90 minutes and if the pricing was as Amy claims it to be, well worth the travel expense…but I have a vision problem that prevents me from driving the 90 minutes and getting someone to drive me is out of the question when everyone else works.
And another thing I discovered that I didn’t see on your blog is that members are LIMITED to the vendors/suppliers listed on their webpage. The webpage has 45 different categories and sub-categories with a little over 600 different companies listed but a vast majority of those companies were unfamiliar to me.
I discovered this when I simply went “shopping”, identified items of interest and requested pricing information only to be told the items were not available thru American Direct!
By November 13 I had requested and then demanded our money back because we had been misled. ADI has refused. I filed a complaint with the Austin Better Business Bureau and the Texas Attorney General’s Office. ADI has responded to my complaint by calling me unreasonable. They have lied several times in their written communications and I have had the pleasure of pointing out the discrepancies, but so far we have gotten nowhere.
I wish I had seen your site before. But let me say this, I found another site today where someone else signed up for the ADI membership with the Austin outlet. Like us, that person was interested in the home improvement and building materials. After he got home, he checked out the pricing (he must have attended the presentation during the week) and determined that the pricing was not as good as he could get by wheeling and dealing with Lowe’s and/or Home Depot. So, he immediately canceled his membership and ADI got ugly with him, claiming he had not canceled within the 3 days. Fortunately for him, he had paid the $1999 on his credit card because he disputed the charge and the credit card company fought the battle for him. His membership was ultimately canceled. So, even if we had canceled within the 3 days chances are we would not have gotten our money back.
We are stuck and unless Amy is correct (and I doubt that she is), we will not be able to recoup our initial membership fee without spending more money than we would have to locally! I can’t see flushing good money after bad just to try and make it look like we have saved.
I have to wonder if the retail prices provided to Amy were inflated. The pots and pans through this B&F System that allegedly retails for $1295 (the set they show in the presentation) can be purchased at several sources online for about $250 but the way ADI tells it, you save more than $1000 on just that one item.
I requested pricing on an island range hood (Boen) that retails for $2834. ADI proudly provided me with a cost of $2163. They calculated the savings based on the retail price of $2834 PLUS Texas sales tax (8.25%) minus the $2163 PLUS Texas sales tax and came up with a savings of $726.36. Thing is, it took me literally MOMENTS to find a site on the Internet where I could purchase the same identical island hood for $1549. Why would I buy it from ADI for $600 more than I would have to pay for it elsewhere just to save what they claim to be $726.36.
And this business of having a guarantee that Amy mentioned? You must spend $5000 thru American Direct in 5 years and then you will be refunded the difference between your initial membership fee and the amount you actually saved. But the amount you save based on their calculations will NEVER result in a refund. Its like the pots and pans…according to them you saved over $1000 even though actual savings based on what you would have had to pay elsewhere is the difference between $181 and $250 (less than $100).
I am so frustrated I could scream. I just don’t see where we will ever be able to recoup the initial membership fee in real savings even though we plan to build TWO homes!
Hi Bonnie,
I’m sorry you didn’t find my site sooner. I wish I had a magic solution that would get your money back.
Given how much you’re out, you may want to consider suing in small claims court. It may be worth trying it.
Best,
Ryan
Yeah, I am considering that option. Their failure to disclose that members are limited to just those vendors listed on their website and the fact they require you physically visit the Austin showroom just to get pricing are material facts that had we known we would not have joined. Withholding material facts can render the agreement voidable. I’m not an attorney, but I did study business law in college and this was one thing that stuck in my mind.
They turned me over to the “operations manager” and in the numerous communications back/forth he said and I quote, “If location is such a big issue now, then I would assume that you would have asked someone to clearify this issue before joining and if you did I assure that none of my staff members would have mislead you to believe that there are showrooms in San Antonio.” No, we didn’t ask that question because there was nothing in the presentation to prompt it. The speaker repeated over and over and over again all you had to do was go shopping and submit the info.
When he responded to the BBB, he claimed that all I had to do was tell him that I couldn’t shop in Austin and they would have made alternate arrangements. Wow, that was the first I heard that statement even though I had told him several times I couldn’t shop in Austin and I even told him WHY…and all this was done in writing so I can prove it. Yes, I have submitted all this to the BBB and AG’s office.
I even tried to put it into a perspective that the AG’s office would find interesting and tempting. ADI operates 208 days a year (Wednesday thru Saturday). If they only lure ONE new prospective member in per day of operation at $1999 per membership, that means $415,792 initial membership fees in one year. I know that this company is located in several states based on what I have seen on the Internet. So, assuming 24 states each have just one ADI outlet that operates 208 days a year, the figure is now over $11 million.
Time will tell if my plea to the AG’s office landed on listening ears. Meanwhile, I’m not sure what we need to do. These people lie and trying to be prepared for their lies can be very stressful. What I want is for a regulatory body to make ADI fully disclose their services prior to the member joining. Granted, that would shut them down, but the public has the right to full disclosure. And I think they should be required to allow 30 days for cancelation. Shoot, we went to the presentation on Saturday afternoon. They closed at 5:00 that day and didn’t reopen until the following Wednesday which was beyond the 3 day cancelation period. Had we tried to cancel during that 3 days, no one was available to notify of that cancelation. They would have denied our refund anyway and as it was I caught on to their scam within days.
Thanks for your words of encouragement. I hope someone reads this before they make the mistake we made…and some of those that have responded with comments that ADI has saved them money should look into whether or not the savings were real or contrived.
I got pulled into this company’s sales pitch by prospect of major home furnishing purchases and minor purchases. However, I had two problems, 1) my monthly payments kept getting returned because the post office didn’t recognize the mailing address in Austin, TX. and 2) After going to the web site and looking for things we wanted, we could never find anything.
So I haven’t paid them an monthly payment in 7 months including the payments returned to the bank by the post office. I have called them locally and told them to cancel my membership. They returned the $199 renewal fee that they somehow managed to charge to my credit card account that had been changed to a different number from the original number I gave them.
Today I received a delinquent account notice, and I called them back locally to tell them to cancel my account because I would not be sending them anymore money. The young lady informed me that I needed to call elsewhere. I told her I would not be calling other numbers that this was the location which I did business with them, and I informed her that they would hear from my lawyer if they turned my account over to a collection agency like the letter threatened.
All that said, I consider the first payments they received as my penalty for being so stupid and gullible. I am frustated by the lack of information on the web other than your blog. I wish I had seen it sooner; I signed up with them Oct. 2007, so your information was available then.
I sure hope I do not end up having to pay them another $1527.20 as the letter states. By the way, I have never used their service where I have been able to purchase anything.
Hi David,
I’m glad you’re not out more money. I can’t give legal advice as I’m not a lawyer, but I don’t think they can make you pay the balance. If they try, I would sue them. Again, that’s not legal advice. I hope it all works out.
Best,
Ryan
We went to a presentation in Jan 2009 in Austin, TX. Almost exactly the same presentation as you described here.
When we went to our little separate room, I asked a lot of questions and the salesperson got flustered. He was mad as we left with our final great prize of a nonsense 3 day scam trip.
I just got the call in Austin. I’m kinda short (but very polite) and told them to remove my name and don’t call in the future…I’m on the no-call list, etc. Your blog was a great read, nice pseudonym! I tend to shy away from anything with America in the name or a flag on the label. Sad, but American can be synonymous with scam. Remember when products had to have the country of origin on the package and everything had a big flag promenently displayed, but the fine print stated that the packaging was made in america but the hammer (or whatever) was made in china? What is it with americans scamming americans? Is america synonymous with sucker? Sometimes I wonder. Good job trying to dispel this myth.
Brand Name,
Kudos to you for being smart enough to run at the first sign of trouble!
I just wish more people would read this blog before they go.
Best,
Ryan
I can sadly say that I used to work for the American Direct “scammers”. The job was horrible, but was a weekly paycheck. It was only until recently that I began doing research on my “employers”. I feel so guilty and used, since I used to the the “telephone specialist” that called the people at home.
I work for the company so go ahead and bring it on i have been there for over 2 years and watch people win the grand prizes. If you look up any company you will see all the complaints no company fits everybody life style. The invitation goes in detail what you are coming into it you dont have a obliagtion to join because we do know this company is not for everybody. So there is people who loves us and people that hates us thats business people. I stand up for the company i work for and i do use my real name and very proud of it. Now that i lit a fire underneath some of your bums im sorry we do everything legal. The “Do Not Call List” you need to read it again we are exempt because when we call we are not selling you anything over the phone im just asking to mail a invitstion for you to look over at your convience, but all you have to do is ask to take you off are calling list and we have no problem and everybody who has threaten me to get arrested i hate to tell you im still here. So, with that everybody has a opinion and that is why we have “Freedom of Speech” let me write this and dont delete give a chance to support my company im not a threat trust me.
Angela, I let anyone who wants to comment on this page comment. So, you’re comment is up and I’m not going to take it down.
That said, I can and will respond. You’re right that your company is technically working withing the laws – it is not doing anything illegal. But it does behavior unethically. With very few exceptions, people lose money by joining your company. That’s how your company makes money. Ergo, you work for an unethical company in my opinion. That’s your prerogative. You’re welcome to try to dispute that, but I’d like to see the hard evidence.
We just got back from the presentation…
When we said we’d have to think about the sales guy was short with us about recieving our free gift and slammed the door.
Luckily during the presentation I did a google search on my BlackBerry and seen this site. I told my wife it may be a scam…after the $1999.00 joining fee I figured it was too good to be true…and you know what they say about that…
This location was in Austin, Tx.
Thanks for posting this Blog, it may have saved us a lot of money and frustration
Dear Ryan,
I am so happy that I found your site. I am originally from the Cincinnati area, so I am familiar with the news program that helped you tell your story. Currently, I am living in Western KY, which houses an American Direct “store”. I have a friend who is need a job, and I tried to find American Direct’s number in order for her to inquire about a job, and I found your report. Thank you for informing me and others about this company, and not only will I avoid their call, if they call, but now my friend will not have to endure another horrible part-time job!
Currently, I am working for a bank, and I have witnessed many scams, and this company is just as bad as the others, even though they have a “legitimate” sales pitch. I will remember this information if a customer comes to me with information regarding American Direct!
GW, glad I could help!
Hey!
I didn’t read all of the posts but as the last person posted, there is an American Direct store in Murray, Kentucky. I had a friend who worked there and he told me that the majority of their calls go to the Ohio and Texas regions. I wouldn’t take it personally against the employees of American Direct – most of the workers are just looking for a part-time job because the store is a few blocks from a university.
Guess what everyone!!! I heard today that American Direct has shut down and has laid off all of its employees. Hopefully the phone calls will stop and noone else is scammed!
I hope you’re right!
There back, they have opened in Houston at 13805 West rd, Houston tx 77041. Looks like there gonna prey on another city.