US Utility Direct Review: Power rebates and MLM?
There is no information on the US Utility Direct website indicating who owns or runs the company.
The domain ‘usutilitydirect.com’ was registered on the 15th of April 2012 however the domain registration information is set to private.
The only public name I’ve seen associated with US Utility Direct is “VIP Founder” Steve Gewecke. Gewecke credits himself as the President and Owner of ‘Morningstar Marketing and Consulting LLC’ on his LinkedIn profile and has published a few videos on Youtube where he mentions he is also the Marketing Director of US Utility Direct.
Back in late February Gewecke wrote on Twitter wrote:
Can’t wait to get my new project started! BIG things happening in the next 90 days! More details coming soon!
One month later he then began promoting his involvement in Network Marketing VT:
Network Marketing VT is of course a cash gifting scam launched in late January 2012 and not surprisingly, doesn’t appear to have worked out for Gewecke.
At present Gewecke is the only person I can see publicly promoting US Utility Direct which is definitely odd (why would an executive of the company be recruiting on YouTube?). Moreso when you consider that Gewecke doesn’t mention anyone higher than him (an owner, president or CEO) in any of his US Utility Direct marketing material.
Throw in Gewecke’s ‘can’t wait to get me new project started!‘ tweet and I’m starting to think that there might not be anyone higher than Gewecke himself.
A silent partner (or partners) is possible of course but with Gewecke running his own marketing company I’m not really buying it. That said, without further clarification public ownership of US Utility Direct Review is currently unknown.
As always, if a MLM company is not openly upfront about who is running or owns it, think long and hard about joining and/or handing over any money.
The US Utility Direct Product Line
US Utility Direct has no retailable products or services. Instead members of the company are required to market company membership to prospective members.
The US Utility Direct Compensation Plan
There are two main components to the US Utility Direct compensation plan, matrix commissions and an annual electricity rebate.
The bulk of US Utility Direct’s compensation plan commissions are paid out via the use of a 2×1 matrix. A 2×1 matrix places you at the top with 2 member positions directly under you:
Each time both membership positions are filled underneath you (via the recruitment of new members), you earn a $25 cycle commission.
In addition to cycle commissions, US Utility Direct also offer matching bonuses on the cycle commissions of all members you directly recruit. How much of a matching bonus you are paid is dependent on how many members you have recruited:
- Qualified Affiliates earn no matching bonus (1 member recruitment requirement)
- 1 Star Affiliates earn a $5 bonus (must recruit at least 5 Qualified Affiliates)
- 2 Star Affiliates earn a $10 bonus (must recruit at least five 1 Star Affiliates)
- 3 Star Affiliates earn a $15 bonus (must recruit at least five 2 Star Affiliates)
- 4 Star Affiliates earn a $20 bonus (must recruit at least five 3 Star Affiliates)
- 5 Star Affiliates earn a $25 bonus (must recruit at least five 4 Star Affiliates)
Finally there’s also a cycle bonus paid at the end of each month. For each matrix cycle company wide, US Utility Direct put aside $5 into a bonus pool. Each 5 Star Affiliate has one equal share in this pool and at the end of each month are paid their share of the bonus pool.
After registering your electricity provider with US Utility Direct, the company then claims that, if members record their power bills 4 times a year in their backoffice, they will payout an annual 15% rebate on member’s electricity bills up to $200.
Joining US Utility Direct
Membership to US Utility Direct is $99 a year.
The US Utility Direct compensation plan is heavily dependent on the continual recruitment of new members to keep matrices cycling and commissions rolling. This in itself is a big enough of a red flag to raise about the business but their electricity rebate only raises more questions.
The big question of course is ‘how are these guys paying a $200 rebate?’
US Utility Direct claim that the rebate they offer members is the result of a
proprietary partnership with a Venture Capital and Market Research Group that helps subsidize the rebates through their customer acquisition programs.
That by itself sounds reasonable enough… until you take a look at the requirements of the US Utility Direct’s rebate:
In order to claim the annual rebate there
are NO Credit Checks, NO Contracts, and NO requirement to switch your current power provider.
So naturally, how are a “venture capital” and “market research group” coming up with $200 annual commissions when they apparently make their money on “customer acquisition”, when through US Utility Direct no actual customers are being acquisitioned (you don’t need to change your provider to claim the rebate)?
How’s that gunna work?
The answer of course is that it doesn’t and effectively the electricity rebate just winds up being a $200 bonus for joining the company. Where this money is going to come from though remains a mystery.
The rest of the US Utility Direct compensation plan has nothing to do with electricity companies or rebates and read like any other pyramid scheme scam out there. So with the only money coming into the company being $99 annual membership fees, unless I’m missing something when you take into consideration cycle commissions and the bonuses, the numbers simply don’t add up.
If just 1000 members joined, paid their membership fee and claimed the full $200 annual rebate, that’s a pay out of $200,000 – with only $99,000 going into the company via membership fees.
Anyone want to have a crack explaining this one?