Mike Lammons, an international director for Ijango, recruits potential members at a San Jose event. The Better Business Bureau has issued warnings about Ijango's practices. (Published Friday, Sept. 25, 2009)
That's the message the Better Business Bureau wants to spread about Ijango, a self-described "online community" which is recruiting marketers in face-to-face sessions across the country.
In pitch sessions, Ijango "directors" promise potential members that if they pay $149 to sign up and $20 a month thereafter, they'll make money when people they recruit search and shop online. The BBB says Ijango's plan has "red flags" and could potentially be a pyramid scheme, since its revenues may rely mostly on signups of new members.
Since Ijango launched in August, the Bureau has received 3,400 inquiries about the company. It gives Ijango an "F" rating. And Internet critics have lobbed savage reviews of its business. Here's what company cofounder Steve Smith told us about those bad notices on the Internet: "Mainly it's just been one guy named clicksniper and he's made an awful lot of money developing an awful lot of traffic from an awful lot of people who like hearing news that's not as good of news as you might like to hear."
Smith and other Ijango representatives have strongly disputed the Bureau's claims.
"It's a little different concept because we're bringing in customers who produce revenues for us," Smith told NBC
But he was vague about how they produced those revenues.
Asked about partners like Netflix and Pricegrabber, Smith said those are "companies that we either have a relationship with, and it's probably not a direct relationship.
"This development team we've brought on brings a lot of relationships, so for us it would be a third-party relationship with these people that help monetize the customers that we bring to the site."
It's common for companies large and small to make money online by directing traffic and transactions to partners. Google
pays a cut of advertising revenues to publishers who let it sell ads on their Web pages. Amazon.com and other e-commerce sites pay websites to refer online shoppers to its store. Subscription services like Rhapsody and Netflix pay a bounty on new subscribers.
And there are myriad middlemen like ValueClick which broker these relationships and commissions in complex business webs.
But the Better Business Bureau says Ijango's claimed relationships with companies like Google, Pricegrabber, and Rhapsody simply don't exist.
The Better Business Bureau also says the No. 1 complaint among users is that the site really doesn't work at all. In two weeks of trying by NBC Bay Area, Ijango has never functioned as a search portal -- and it hasn't even allowed us to join as a member. As part of the pitch, Ijango reps tell you not to worry if the site doesn't work, saying it's constantly being updated to improve performance.
"We don't make money through the recruitment of members, but bringing more members in provides us more customers," Smith explained. He then stated that Ijango pays "what we call ... a member-gathering bonus."
Paul Best, an Ijango user, says he still believes in the company despite these apparent technical shortcomings.
"They haven't started paying out yet because of the problems with the server," Best told NBC. "Even if I was duped and even if they got my $149, that's not a lot of downside risk and the upside potential."
It's that "potential" that may be the real power of Ijango: People who believe in the product because they think they will make money. But how much money? Michelle, an Ijango user, refused to say, claiming it was a "private matter."
"We've settled all of the complaints that have been brought," Smith said. "There are no issues."
The Better Business Bureau says it is alerting people in areas where Ijango is holding seminars. It's a rare measure for the organization to take, but spokeswoman Erin McCool
says there's little else it can do to warn consumers.
"We can't shut them down, and it's a painstaking process for government agencies," McCool said. "Sometimes it can take months, and they may be gone by then."
Ultimately, McCool said, consumers need to spot red flags for themselves, and steer clear of any business that promises to pay you solely for recruiting others.
Here's a Better Business Bureau video about Ijango:
Published at 5:52 AM EDT on Sep 25, 2009