Does a Utility Warehouse scam exist?
The opinion about a utility scam seems to be divided with some saying categorically it is and others saying it is a perfectly legal and above board business.
You can read this article and make up your own mind.
First you need to distinguish the company from it’s sales force.
The discount club is part of telecom plus, which is a British plc company because of this it has to pass certain tests and I don’t think that the company is anything other than an above board straight up enterprise offering utility services at a fair price. I don’t believe a scam exists.
The main company Telecom Plus plc, is listed on the London Stock Exchange, and it is licensed by energy regulator Ofgem and regulated by Ofcom.
Where the thinking comes that a utility warehouse scam exists is in the selling of its services.
While it is true that the company doesn’t have a conventional sales force, it does have independent distributors and customers who get rewarded for selling the uwclub services.
The feeling that a rip off or utility warehouse scam is in operation has arisen because many people have been approached on the street, at home, in shops and at outside events by folk who are pushing the utility warehouse broadband and other services.
Many have been handed the little cards up and down the country and seen the flyers.
It is sometimes because of this that people have the perception of a hard sell utility warehouse scam.
Then as you are approached the usual question is “Would you like some … extra money each month? more free time? or to be able to choose your future?”. You are further told that …It’s “the opportunity of a lifetime”, “no experience necessary”.
Some folk will have had a newspaper-style sheet or DVD delivered to their home or business. The mini newspaper and dvd tells stories of ‘all those’ ordinary folk, just like you, who have been able to make lots of money and purchase their dream home, super cars and are enjoying all-expenses top class holidays. All this can be yours if you only sign up for the “opportunity”.
I personally do not think there is a utility warehouse scam because everything has to be backed by the plc company. – it is all entirely legal and above board. The problem of people thinking it is a scam, if any, exists when people are invited to become members of the discount club by a “distributor” or a customer who gets rewarded as they are a sort of salesperson.
They earn a commission, fee or reward by encouraging people to become members of the uwdc. They also make money by “introducing” new distributors into the telecom plus business. There are tens of thousands of distributors and only a small percentage make money. To be fair the website carries a statutory warning urging people “not to be misled by claims that high earnings are easily achieved”.
To become a distributor or representative, you have to enroll with an existing distributor or representative who becomes your sponsor.
This is why every piece of advertising carries contact details for a particular distributor including uwclub webmail.
There is a signing up fee, which the company says is refunded if you recruit a certain number of customers in your first two or three months.
Distributors earn a commission for every customer they sign up and for how many services they take.
Some services pay more commission than others. Distributors also earn a monthly payment from each member they sign up based on how much that member spends on services.
They can also make money by introducing other distributors to the utility warehouse business by earning a smaller amount of commission on what each distributors customers spend.
This is often why people think there is a utility warehouse scam, the view of this review site is there isn’t a utility warehouse scam!
The pitch to recruit other distributors is something like….
”Every time your customers make a phone call, switch on a light, turn on the heating or surf the net, you could be getting paid”.
The T+ website says. “Every time your customers make a phone call, switch on a light, turn on the heating, or go online… you could be getting paid. And you don’t just earn money from your personal customers.
As an Independent Distributor you can introduce other Distributors to this business and earn commission on what their customers spend too. As they follow your example and build their own successful business, you can gain promotion and earn an increasing share in their success. We call this the power of duplication.
Anyone who wants to earn some money and has drive and enthusiasm can become successful with the Utility Warehouse. The residual income you build will continue to be paid as long as your customers continue to use our services, providing that you have at least six active customers. That could be long after you have stopped building your business.
There are forum posts that are manipulative and designed to get that particular distributor a lead but this is not endorsed by the company. This type of promotion does lead to a lot of complaints and misunderstanding and is done because of the way UW distributors earn their commissions.
Another reason that people think a utility warehouse scam is happening is because distributors earn promotion when they meet certain targets, and pick up bonuses ranging from a few hundred pound to thousands of pounds.
In addition to earning a residual income distributors also benefit from a range of incentives and bonuses. Such as owning their own Utility Warehouse branded BMW Mini, earning share options in Telecom Plus, driving one of the company’s fleet of Porsche Boxsters, qualifying for luxury all-expenses-paid holidays, earning vouchers to spend in Marks & Spencer and John Lewis, receiving significant cash bonuses by introducing a certain number of customers and distributors. When people see these rewards they often think a utility warehouse scam is in operation.
The business methods may not be to everyone’s taste but it is not right to say a utility warehouse scamis happening.
The distributors and customers eagerly promote the club to homes and small businesses and its range of utility services – gas, electricity, broadband, and home and mobile phone. Because they get paid. I think many people join the club initially from a recommendation not realising that the person recommending the club will get paid.
The club is also promoted by Dawn French and Jennifer Saunders in a number of short, jokey videos promoting the utility warehouse brand. I guess they to will have been paid a great lump of money!
Customer service and promotions says that “you may not have heard of the Utility Warehouse before”… “It does not advertise, does not have shops, and does not seek out national press coverage or have a sales force” but relies on the best advertising there is “word of mouth recommendation by existing satisfied customers”.
In truth it does have a highly cash motivated sales force and lots of the recommendations come from customers who are rewarded from the company, which puts the word of mouth thing into perspective. This by some people could be construed to be a bit of a utility warehouse scam.