Exposing the Ambit Energy Scam: Is Ambit another Pyramid Scheme?
You may have read some of the Ambit Energy Scam reports on the internet and now you’re wondering if they are true. Unfortunately, many people, including ex-consultants of Ambit Energy, report false information about the company and the business opportunity because of bad experiences for one reason or another. This Ambit Energy scam review will examine some of these complaints and try to determine if the company is indeed a scam.
In the process of uncovering the truth about “Ambit Energy Scam” accusations, we will briefly discuss some information about the company, their energy service and how Ambit Energy consultants are compensated.
If you’re considering joining Ambit Energy or just curious if Ambit is a scam then you definitely should read this article in its entirety.
You might also be interested in learning about Ignite Energy which is a similar energy deregulation business opportunity.
So what are the Ambit Energy Scam reports?
I found hundreds of scam reports about Ambit Energy on the internet. People were complaining about a wide variety of issues that I’d like to address at this time.
Henry writes: “Ambit Energy is a complete scam from top to bottom. I got a lower rate the first month. The 2nd month it doubled. The 3rd month it tripled.”
Obviously, Henry was an Ambit energy customer. He felt like he was taken advantage of by his rate increasing each month. Unfortunately for Henry, he was on a month-to-month plan and experienced market fluctuations in energy prices. His complaint was posted online in late 2008 which was at a time that every retail electric provider had to increase their rates due to extreme volatility in the market. My only suggestion to anyone considering switching their energy provider to Ambit or anyone else is to read the terms and conditions. It is favorable to lock in a fixed rate to hedge against energy price volatility. If this claim is true (which I doubt it is) Ambit is legally allowed to raise rates on month-to-month customers.
Gabriel writes: “A former friend sponsored me as a consultant after promising me wealth and positive cash flow residual income with a minimal of effort. I gave my friend names to contact people and sponsor them on my behalf (as he suggested I do) and he insulted them and told them they weren’t motivated then they told him they didn’t want to join the business.”
Gabriel is upset because of the way his sponsor treated him and his friends. This complaint about Ambit Energy being a scam is actually a false claim because it sounds like Gabriel’s sponsor is the problem here. Ambit Energy consultants are independent and Ambit Energy is not held liable for wrong doings of consultants. These types of situations occur in all business types and its unfortunate it happened, but there is really no scam on Ambits part here.
Shawn writes: “I did a research project on Ambit and it appears to be nothing more than an old-fashioned pyramid scheme. It’s quite surprising that anyone would ever fall for this, but it’s like they say: A fool and their money were lucky to meet in the first place.”
First of all, a pyramid scheme is when you recruit or sponsor new people below you in order to make money. Then in order for them to make money they have to sponsor new people below them. A pyramid scheme is fueled by new people paying for the people above them in the pyramid.
The Securities and Exchange Commission (SEC) has deemed multi-level marketing companies like Ambit legal businesses as long as the majority of their income comes from the sale of a product or service and consultants are not paid solely for recruiting others.
Ambit has a viable service they bring to the market in the form of energy. They currently are in Texas, New York, Illinois, Pennsylvania and Maryland.
Ambit Energy consultants pay a $429 start-up fee which gets them in the business, covers any training costs incurred by the company and includes a welcome kit. Some of the Ambit Energy scam reports I’ve read talk about how this $429 start-up fee is being used to pay the consultants above. This is absolutely false information. We will cover the compensation plan in more detail later in this article.
Still think the Ambit Energy Scam reports are true?
Ambit Energy is a Retail Electric Provider in the state of Texas, but also markets electricity and/or natural gas in the deregulated markets of New York, Illinois, Pennsylvania and Maryland.
In 2002, the state of Texas deregulated it’s energy market into 3 separate categories: the power generators, the transmission and distribution companies and the retail electric providers or REPs. Ambit Energy buys energy from the energy grid wholesale and sells it retail to the marketplace for a profit. There is nothing new to this business model but some people have a hard time understanding this at first.
Texas has now become the template for other states to follow which Ambit is now branching in to. There are plans for more states to deregulate their markets which would allow Ambit to expand into these states and increase their overall profits.
In 2010, Ambit Energy was named America’s “Fastest Growing Company” by Inc 500.
Ambit Energy Service
As previously mentioned, Ambit Energy is a retail provider of energy currently in five states. Their service is similar to other service providers in that they provide quality billing, customer service and competitive rates.
There should never be a concern about the reliability of the service as this is handled by the transmission and distribution companies (not Ambit) previously mentioned.
Rates vary based on location and length of contract (month-to-month, 6-month, and 12-month). Ambit also provides a “green” product which is 100% renewable energy. Usually, this rate is slightly higher than the other rates.
You can review current rates for different service areas based on zip code on Ambit’s website.
Ambit’s Compensation Plan
There are three primary ways to earn an income as an Ambit Energy consultant: Immediate Income, Leadership Income and Residual Income.
Ambit knows how important it is for consultants to start making money immediately. You can actually earn two types of immediate income: Jump Start and Team Builder Bonuses are designed to reward new Consultants for taking action immediately. Ambit pays Jump Start Bonuses when you enroll new energy customers and Team Builder Bonuses when you help your personally sponsored Marketing Consultants do the same. Both bonuses are paid every Friday on accepted pending or energized energy customers.
There are five positions within the Ambit Energy compensation plan. As you promote to higher levels you are rewarded for each new consultant who joins your organization. You earn more as you grow your team and are promoted to a higher position. It’s important to point out that you don’t actually earn a bonus for recruiting other consultants. The new consultants must first qualify by enrolling 4 customers within their first 30 days of business in order to trigger the immediate or leadership bonuses.
The most important element in the Ambit Energy compensation plan is the residual income. This is long-term income generated by customers paying their monthly energy bills. Ambit pays consultants a residual commission for every customer in their organization up to 6 levels. In some instances, you can earn commissions past your sixth level as well.
Commission amounts range based on energy consumption and State but usually fall within $.25-$3.00 per customer per month.
I personally know consultants in Ambit who have over 15,000 customers on their team. If you use an average residual commission of $1.25 per customer this is over $18,750 a month or $225,000 annually.
Concerns About Ambit Energy
I have exposed the truth about the Ambit Energy Scam allegations and want to be very clear that I DO NOT think Ambit is a scam. However, I do have some major concerns that I would like to address at this time.
It may be obvious by now that in order to make a substantial amount of money as an Ambit Energy consultant you need to be able to do two things: Enroll customers and Recruit consultants.
Although, Ambit provides great sales training and unbelievably professional websites to help market the business this is not enough to automatically have success. It takes more than just sales skills and good looking websites!
Most Ambit consultants who join are able to enroll a few customers within their first 30 days. They are excited about earning the $100 jump start bonus and may even tell some of their friends and family about the business.
The problem is finding people to talk to after you’ve talked to all of your friends, family members and co-workers etc.
Some have gone so far as to jeopardize the relationships they have with their friends and family just because they won’t take “no” for an answer when attempting to recruit them into the business.
After a few months of struggling they eventually give up and quit the business.
Here is my Solution…
I struggled, like many in this industry, to enroll customers and recruit others into my business opportunity. I know the frustrations first hand and it destroys your spirit and vision necessary to have success.
The good news is I have found a way around this by using special marketing strategies most people have no clue even exist!
I teach people how to STOP chasing their friends, family and even strangers and instead get them to chase you.
This is possible when you implement a marketing system called Attraction Marketing.
Click here to learn more about attraction marketing and why so many people are using it to build massive checks with Ambit Energy!
I look forward to helping you and thank you for reading about the Ambit Energy Scam.