• Report: #323485

Complaint Review: HMI, HMI Industries, Filter Queen, Filterqueen, Healthmor

  • Submitted: Thu, April 03, 2008
  • Updated: Mon, September 19, 2011

  • Reported By:CLEVELAND Ohio
HMI, HMI Industries, Filter Queen, Filterqueen, Healthmor
13325 Darice Pkwy Strongsville, Ohio U.S.A.

HMI, HMI Industries, Filter Queen, FilterqueenHMI, HMI Industries, Filter Queen, Filterqueen, Healthmor NATIONWIDE EMPLOYMENT SCAM THATS BEEN GOING ON FOR YEARS - TAKE 2 MINUTES TO READ THIS!!! Strongsville Ohio

*UPDATE EX-employee responds: Independent contractor/employee definitions will soon be over

*UPDATE EX-employee responds: April's situation is an exception

*UPDATE Employee: Response to Tim

*UPDATE Employee: Good for you April

*UPDATE Employee: I will answere those question-Shame on you!!!!

*UPDATE Employee: Thank you John

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If you are just interviewing or have been recently hired by a local Filter Queen distributor as a sales associate, you should definately take what I have to say in this report into consideration. I gain absolutely nothing by what I am writing and am not pursuing the company legally in any way. As a matter of fact, I am just as guilty as anyone in the company and it is my fiirst hand experience that gives me the ability to "out" what Filter Queen and HMI are really about. I spent 8 years working with the company and owned a distributorship in the midwest for 4 of them. In my tenure with the company I was taught how to effectively lie, cheat, steal and take advantage of employees and consumers alike. I am not proud of this and the least I can do is begin to be honest and attempt to explain how things really work. If you are considering working for the company or currently are, take the following things I write down to heart and ask your interviewer, sales manager or distributor to explain the things I have brought up. I can guarantee you with absolute certainty that there are no good answers for these questions.

1. You probably answered a "customer service" ad or something to that effect. That is absolutely false. The position is a "raw sales" position. You will not make money or advance whatsoever unless you can flatout produce 3-4 credit apporved transactiuons per week.

2. Most distributorships tell you in the interview that you will be paid for simply completing presentations. Typically you are promised around $1800 for completing 40 - 60 demonstrations in a given 30 day period. This is again a complete scam and is simply used to get you through the interview and excited about the job. LESS THAN 3% OF ASSOCIATES EVER RECEIVE PAY FOR COMPLETING DEMOS EVEN JUST ONCE, LET ALONE CONSISTENTLY. It is a commission job and chances are, the manager will have a sit down meeting with you your first week or so and give you a "profit sharing" promotion. It is not a promotion, it is their way of putting you on commission. ASk for a promise in writing that you will receive appointments every day and are guaranteed the salary.

3. The gas allowance you are offered is a joke and only counts to appointments that are actually home and let you do atleast a 90 minute demonstration. My office wa a fairly productive office and it took 4 appointments to get one done. Many times customers are not there or have been told that the demo only lasts 30 minutes. When this happens, the demo does not count.

4. You are not an employee of the distributor - you are an independent contractor and once you have signed the independent contractor agreement you have signed away everything. That agreement does nothing whatsoever to protect you. I am sure that your manager has told you that it saves you money in taxes but that is a joke. Ask an accountant about that one. It makes your taxes very confusing on a year to year basis and ultimately costs the same. The following are the real reasons you are an independent contractor.
- They can let you go and take back your gear at any time and for any reason which terminates your position.
- They are not required to supply you with any appointments. It says just that in the contract so if you get close to your monthly quota and are about to meet your salary requirement they can simply not give you anymore.
- They have no obligation to pay any of your taxes and quite franklly could care less if you do.

5. The distributors primary income is not from typical consumers. It is from the friends and families of its employees. The first thing you will be told to do is present the product to 10-15 of your friends and family your first weekend at work to get accustomed to presenting the product. They will also only allow you to show to people that are "creditworthy." This is because nearly 40% of transactions are to friends of associates and they don't want to waste time with your friends and family that don't have money. Your frineds and family will probably get a few hundred dollars off the inflated sticker price but you will only be receiving $50-$100 for each sale instead of the normal $400-$500 because you are "new." What has just happened is simple, the distributor took a few hundred dollars out of your commission and discounted it to your family member and still made the same profit.

6. The turnover rate is staggering. Trainers are taught to keep you happy through your training and friends and family weekend and as soon as your sales clear, it is feast or famine. THE AVERAGE DISTRIBUTOR WILL CONDUCT 40+ TRAININGS A YEAR. If every training averages 8 people, that is 320 new assoicates a year. Let me ask you this . . . if there are 300+ new recruits a year, why does the office only have 5-6 veteran assocites? The sad news is unless you are a cutthroat sales person willing to work 80 hours a week for maybe $2500 on a good month, YOU WILL FLAT OUT NOT MAKE IT. You will have simply wasted a couple weeks of your life and sold your friends and family something for an outrageous price that they could have gotten on EBAY for $200 bucks. (check it out)

7. Once training is complete and you are ready to start office appointments, it will be nothing like you thought. It is not a 9-5 job. You will be expected to work from the early morning until late at night and you better be ready to work on the weekends because that's when people are home. If you are lucky, you will be handed 2-3 appointments a day but as you will soon notice, just because you have an appointment slip in your hand it does not mean you have an appointment that will be completed. At the last National distributor meeting I attended the national figures were staggering. Less than 25% of scheduled appointments actually held up and the average associate was only completing 4-5 a week!

8. A good closer in the business will close 20% of actual appointments ran or roughly 5% of apopointments handed to them when you take into consideration the "no-shows." Of the sales that actually do happen, only about 75% of them will clear the credit check and that is if the office is in a nice neighborhood. Of the ones that actually do clear the credit check an additional 10%-15% of the customers will cancel. These numbers make it very difficult to make a living especially when you consider the hours you put in.

9. Most distributors will pay you $400-$600 on a sale but read the fine print in your profit sharing contract. You will only receive this if the customer has "a-line" credit which is about 75% of the customers that buy the machine, pass the credit check and do not cancel. If it is a b-line deal, you will only receive $50.00. An old trick of the trade is for a distributor to tell the associate that the deal went b-line when it actually didn't and then they keep your commission so if you sell in a real nice house and it goes "b-line" make sure to check it out. The other problem is that the big commission check only is received when the machine is sold at full price. As you will find out, any discounts come out of your check. That means of you give a customer $300 off, you actually gave them the $300 out of your check and the office made the full amount.

10. You will be told that the office has tons of appointments but the truth is they don't. As a matter of fact it is very common practice for the sales manager to "hide" the appointment book form the sales staff on a daily basis so they don't figure it out. Let's do some simple math. An average associate is going to want to complete atleast 4 appointments every day and the average office has about ten associates. That means that every day, 40 appointments should be completed by the sales staff. Lets also say that 50% of the appointments actually hold up (the real number is 25%) which means it would take 80 apoointments on the books every day for you to complete only four demos. Does your office have 80 appointments tomorrow? I bet it has 15-20. Even if you cannot get access to the appointment book to prove this consider this simple math. I bet you were told that the offfice closes 25% and if thats the case, a day of 40 office demos would result in 10 sales. Did your office sell 10 yersterday? I bet your office maybe sold 1 or 2 and with 15-20 appointments on the book, thats about right.

11. Have you ever wondered about the markup? Is it not weird to you that sometimes you will sell a system for $2500 and sometimes you will sell it for $1500? The markup is unreal and it has to be for these offices to even attempt to stay in business. I will make a lot of people mad by saying this but it should be public knowledge. A regional distributor pays $550 for a majestic and $292 for a defender. How much did your mom pay?

12. Will your office succeed and how is the health of HMI financially? Do some research on this topic. HMI as a company is doing horrific with some of its worst numbers in years. This is all public information so look it up. Not only is the manfacturer sucking wind but so are the local distributorships. 90% of offices fail in their first year and their are currently only 5-10 individuals that have had an office for more than three years. This is scary because since 2000, HMI has opened over 500 offices with 450+ failures and counting. How long has your office been in business? This can be proven simply by looking at all the posters of past achievers in the business that I know are hanging all over your office and then trying to match the names with the most current national standings. You know what you will quickly discover? Only a few of the names still exist. If thos people we're so good, then why are they out of the business?

If you have read this and are now concerned I am also going to quickly outlline some great questions for you to ask your ditributor, trainer or interviewer?

1. Am I guaranteed in writing that I will receive appointments every day?
2. Am I guaranteed any money if I do not sell anything?
3. Can I be let go for no reason whatsoever?
4. Do I have to come to the meeting everyday?
5. Why am I an independent contractor?
6. How many demos were completed by the office last month?
7. Can I see the sales report to prove that?
8. Why do we train every week?
9. Can I do training without a frineds and family weekend?
10. CAn I Listen to the marketers talk to the customers and actually hear what they promise.
11. How much do you pay for the free gifts and what do we tell the customers they are worth?
12. Would you mind if I contacted local agencies to verify that the company has paid all applicable taxes?
13. How come no one drug tests?
14. What makes someone qualified? Does anyone with friends and family qualify?
15. Can I see the payout sheet from the bank on my last second line deal?
16. How come discounts come out of my check and not yours?

I could have probably gone on and on about the daily scam that takes place and like I said earlier, I myself did all of these things at one point in my career and it is my duty to expose what is going on. I am more than confident that this will make many individuals mad and thatr there will be many responses to this calling me a liar for putting this on paper. Remember that I have no vented interest in the success or failure of these offices and I simply want to put the truth out there. It is up to you to decide what is best for the financial security of you and your family. However, if any of what I have said rings true, I would certainly look into it.

Lastly, if you are right now in the unfortunate situation of being screwed over by a local distributor, here are a few things that you can do to potentially be reimbursed and definately make it public what has happened to you. It was the constant barrage of these type of matters that made me get out of the business and realize what I was really doing.

1. Call the BBB and file a complaint. They won't do much but the distributor has to respond.
2. File a formal complaint with the Attrorney General. This is a business owners nightmare and the attorney general is an agency that can shut a business down. This can be done online and sometimes you will get lucky and a distributor will try to pay you off. I did countless times.
3. Contact all local radio and news stations and tell your story. They love this kind of stuff and there is at least one distributor a month that makes the news in a buyer beware type of story. There is nothing more embarassing than being on the 5:00 news
4. Contact Labor and Industries and explain that you were an Independent Contractor for a fraudulent company that didn't pay you hourly or salary even though you didn't meet the "7 steps for criteria" that an independent contractor needs to meet. Trust me, you don't.
5. Contact the IRS and explain what has happened. Be sure to tell them that you never had taxes taken out of your checks.
6. Contact the department of revenue if you have ever seen green cash come through the door. It is a well known joke within the inner distributor circle that cash deals go right in your pocket and off the books.

Thank you for your time reading this and I wish you the best of luck with wehatever you do. Before you commit your life to being a vacuum salesman, definately consider what I have said.

-EX FQ Distributor


This report was posted on Ripoff Report on 04/03/2008 05:23 PM and is a permanent record located here: http://www.ripoffreport.com/r/HMI-HMI-Industries-Filter-Queen-Filterqueen-Healthmor/Strongsville-Ohio-44149/HMI-HMI-Industries-Filter-Queen-FilterqueenHMI-HMI-Industries-Filter-Queen-Filterque-323485. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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#1 UPDATE EX-employee responds

Independent contractor/employee definitions will soon be over

AUTHOR: Tim - ()

Yesterday, a federal district court case in New York between nationwide exotic dancing company Scores and it's former employees, the definiations between a contractor and an employee have been clarified resulting in the company paying back three years worth of back wages as well as other damages since rules and guidelines concerning their employment leaned more to the dancer being treated as an employee than an independent contractor.  It is not known if Scores is appealing the decision at this time.

 This leagal decision could apply to the indepent contractors working for Filter Queen if:

1. They signed a contract classifying them as an independent contractor

2. They have to report to an office on a daily basis sitting in designated areas for meeting, telephone conversation, or other clerical tasks that they would get paid for at a regular job.

3. They are not being financially compensated (under state and/or federal guidelines) by the independent representative and/or Filter Queen when representing the business during sales calls or outside training activites.

With this posting, this could implement the frameworkd to establsh the possibility of a class action lawsuit between former employees (or contractors), independent distributors, and Filter Queen itself resulting in millions of dollars in legal fees, backpay, and damages. 

I'm not a lawyer but I do have a background in business law with my college degree and I am a former contractor for the company as well.  Clearly Filter Queen has walked a very fine line between its customers, distributiors, employees, and it's so called contractors that perhaps enough legal attention in our federal jurisdiction will put an end to the foolish door to door sales practices that aren't necessary in the 21st centruy.  Filter Queen can then focus on better competition by selling it's products more effecfively on the sales floor of Wal-Mart, Costco, and Best Buy where the companies buyers can dictate the true value of the cleaning machines worth (unless they decide to file for bankruptcy).

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#2 UPDATE EX-employee responds

April's situation is an exception


April's situation with Filter Queen is probably an exception to the rules.  I see her website is still running but hasn't been updated in a couple of years.

I would hope that if April's situation with the company changed since the last thread she posted, that she would step up to the plate and tell what happened.

As a business student myself, we are taught that would be the professional thing to do unless Baker College doesn't teach you ethics but I doubt that.

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#3 UPDATE Employee

Response to Tim

AUTHOR: A.smith - (U.S.A.)

I understand that there are always going to be some one in any organization that dose not treat there people right. But, I feel that I do.

I am not going to discuss to price that I pay for equipment because I feel that is between the manufacture and myself. But, also remember I am a small piece of a huge corporation. I pay the rent, phone, utilities, taxes, corporate, quietly, monthly, and now the new small business tax, all the advertising. My people never have to wait on there money.
I do offer benefits for my reps and my office help in both office such as health, dental, vision and life insurance. You are correct most people can afford to offer.

Not every one loves every company and that is fine but, you have to also we are teaching people how to have the American Dream and help people along the way. I am so proud of the FilterQueen and HMI.

Thank-You for you comments and I wish you the best of luck.

April Mason
Greater Air of Michigan Inc
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#4 UPDATE Employee

Good for you April

AUTHOR: Tim - (U.S.A.)

You're probably one of the few active distributors on here who has probably stepped up to the plate. I know the economy is pretty bad in Michigan and I wish you well on your business.

Filter Queen, HMI, Healthmoor, it distriubtorshipis, or any other names that they have gone by has been very unfavorable not only on this website but by the media as well. I was interviewed by a television station in Ohio about a distributorship who wasn't treating their employees properly although in reality their not employees.

It isn't even just the distributors that have tarnished the company though. It started with the CEO and worked it's way down. CBS Marketwatch contains a lot information over the years about problems with the company when they were trading publicly.

The problem I have is this. The equipment is marked up high enough that you are selling as a distributor that you could treat your independent contractors as employees, give them benefits, wages, and a fair gas allowance. Until enough distributors can convince me of that, then I guess I'll be getting the phone calls from consumer reporters accross the country. We had three distributorships in Seattle when the economy was bad back in 2001-2004. All three of them are reported on here by their own employees and independent contractors as treating everyone unfairly. I'm happy to report they are no longer in business.

As far as customers go and sales go, why lie about the 30 minute presentation you tell them on the phone and tell them its a 90 minute presentation?

There seems to be a pattern going on here that distributorship pop up in econimically depressed areas with high unemployment, take advantage of people in the community, and shut down after a year or two.

If Filter Queen wanted to clean up their image they could get rid of their distributors altogether and sell there machines at Best Buy and Wal Mart and make plenty of money doing so while making Dysan nervous at the same time.

That would be the best way for a cleaning company to clean up their act.
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#5 UPDATE Employee

I will answere those question-Shame on you!!!!

AUTHOR: A.smith - (U.S.A.)

Every once in a while some one finds what they were doing wrong to people and wants to put the blame on some one else.

So, let find out who John is because all the distributors of this amazing products actually cares about there people. You got numbers coming out of left field but you could not keep your business going. That's a shame!!!!

Shame on you, if you were with your company for 8 years then you have to know that HMI dose a lot for there active distributors and associates.

I was a single mom when I started this company had less than $2.00 to my name, I answered an ad for customer service-( we are in the business of helping people)I started has an associate. My first year working 20-25 hours a week making $600-$1000 a week. (I worked as a nurse would have to work 60-80 hours a week to make that kind of money) We have great incentives my first year I was in the top ten associates by the second year I was in the top five. I love what I do. I love what I am to provide for my family. I love that the people that work for me are able to provide for there family. I don't know how people make a living off of min. wage.

Now, I owned two offices in the great state of Michigan. I have been with the company for over 5 years. We make good money at every level at my offices, I am not going to apologize for that!!!!!!!

Our machines help people get a cleaner home and a healthy living environment.

This as been an amazing opportunity , I love giving some one the same opportunity that I was given.

So now lets answer those questions that John has said to ask:

1. Am I guaranteed in writing that I will receive appointments every day?
Why in the world would we have people here to set appointments and associates to run, if we weren't going to get people on them.

2. Can I be let go for no reason whatsoever?
If some one is let go, there has to be a reason!!!

3. Do I have to come to the meeting everyday?
No! But, my question is why would you not want to for more product knoledgement and usually there pretty fun. I know my people like our Breakfast meetings!!!

4. Why am I an independent contractor?
Every organization is different so that is a question to talk to your dist. But, I know when I was a rep I personally loved it for the following reasons. I could take a vacation any time I wanted, I never missed any of my son's sporting act ivies( he is in 3 different sports), and tax benefits. It is a plus-all the dang write-offs!!!

5. How many demos were completed by the office last month?
Every office is different, we had over 500 demos that month

6. Can I see the sales report to prove that?
We get standing that we hang in our offices, so that every one can see how well were doing!!

7. Why do we train every week?
We Don't!!!

8. Can I do training without a friends and family weekend?
I am sure you could but, your weekend dose not determined your success with our company. Our customers are expecting some-one professional and knows what they are doing. Who not to practice on then the people that love you, even if you stumble through the presentation, after you do a few, you just keep getting better and better! And feel more confidante with your presentation. If you walked in and did a presentation before practicing that would set you up for failure. That not what were in business for.

9. Can I Listen to the marketers talk to the customers and actually hear what they promise.
You should that way you start learning every position.

10. How much do you pay for the free gifts and what do we tell the customers they are worth?
That depend on the Thank-You gift, do you ask some one when they buy you a present How much did you pay for that?

11. Would you mind if I contacted local agencies to verify that the company has paid all applicable taxes?
That is public information, you don't even have to ask the distributor.

12. How come no one drug tests?
Not all company's drug test

13. What makes someone qualified? Does anyone with friends and family qualify?
When I hire some one they have to be ready to start a career. Who cares if they have friends Hopefully they will gain some with our company. I met my husband through this company.

14. Can I see the payout sheet from the bank on my last second line deal?
If they are a manager, but just because some one works for me dose not give them the right to see all my financial records. That's any where you work.

15. How come discounts come out of my check and not yours?
They don't.

So, for any one that has any doubt that there working for the wrong distributors , Please do not worry, all the bad ones have quit or were asked to leave our growing organization. I for one feel I am an open book. Even though I would like to be the number one office every month, which I am not. I know that I work for the number one organization. You have to make up your mind in any thing you do.

Take Care,

PS For all the people that know me personally and has helped me through the years Thank-You
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#6 UPDATE Employee

Thank you John

AUTHOR: Tim - (U.S.A.)

I like your honesty John.

I worked for a distributorship called Sound Filtration in Tukwilla Washington five years ago (there is a blog on here about it that I contributed to). It's everything that you say it is. It's a dishonest company from top to bottom. HMI has several negative stories about themselves on line by most leading business reporting websites (such as CBS Marketwatch) since at one time the company traded publicly.

I like that you do call it a vacuum and not the "sugar coated" surface cleaning machine. I'm sure that was some marketing gimick to justify the high price of the machine.

There are a few other trends that are killing the industry as well. Now that fewer people are carpeting thier floors and going to wood flooring, it's probably overkill to have a machine do that type of cleaning work. The other thing that is happening has to do with the air cleaning business in general. The Sharper Image has finally went bankrupt due to reports that those "ionizers" they were selling all these years were ineffective for cleaning the air. As a result, they offered a $35 rebate for the machines. I'm sure the same thing will happen to Oreck since they offer a similar product. I recall mentioning the same thing in my sales pitch about these products. I wouldn't be surprised in the future that government regulation may happen to get the air cleaning business under control similar to what they have done in Canada. While the Defender doesn't contain an ionizer in it I do believe it is an effective filtration system and noticed an improvement using it. Now that I know that they can sell for E-Bay for less than $300 perhaps I might get one that way.

A word of caution to those who are looking for work. I got sucked into this for four months in 2003 when the recession hit us hard in Seattle. These distributorships love to rear thier ugly heads when times are tough. Stay on the unemployment if you can and don't take the distributor position.

It's better to flip burgers than to deal with this foolishness.
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