ATLANTA – Consumer advocates say a multilayered marketing plan used by a company peddling gas for Stream Energy is actually a pyramid scheme and that many investors will lose money.
Robert Fitzpatrick runs a watchdog group called Pyramid Scheme Alert. He examined the most recent income disclosure from Stream’s website for The Atlanta Journal-Constitution.
He told the AJC for a story Sunday that his calculations show 90 percent of Stream’s sales force lost nearly all their investments and only 0.1 percent earned substantial income.
Paul Thies, senior director of communications for Stream, denied the company is a pyramid scheme. He said Stream uses a legitimate multilevel marketing strategy and pays its sales force on their own sales as well as those of the people they recruit.
At a recent marketing event in a hotel conference room in Peachtree City, people were asked to image making as much as $2 million in a year selling natural gas for Stream Energy through the marketing company called Ignite.
A Texas lawsuit claims that Stream sells energy as cover for a sophisticated pyramid scheme designed to take money from the vast majority of sales recruits and funnel it to the top.
The Texas case has just started and Stream is vigorously defending itself. A similar lawsuit filed in Georgia by the same attorney was dismissed this year on procedural grounds.
Scott Clearman,