My husband and I are owners of a small lighting manufacturing company.In September, 2005, we fell victim to a scam of major proportions. A fraudulent consulting service, named International Profit Associates (herein referred to as "IPA")arrived at our offices and touted their expertise and assistance in multiplying our profits and preparing our business for a future, healthy sale. Unbeknownst to us, IPA makes it a practice to prey on small businesses and financially cripple them. They took us for $45,000.00. I have written numerous letters to IPA, but to no avail. IPA initially informed me that should I wish to pursue this, I must fly out to Illinois and appear before an arbitrator. Most recently, they tell me I can arbitrate in California or file a law suit in Lake County, Illinois, even though the fraud was committed in the avenue of the U.S. District Court, Eastern District of Sacramento. In my investigation of this corrupt service, I have uncovered the fact that there has been more than 436 complaints filed against them on www.ripoffreport.com and over 470 complaints with the Better Business Bureau. Interestingly enough, the New York Times' lead cover story on May 7, 2006, reported on the fraud and deception that IPA practices daily. There was also an expose'on IPA featured on FOX NEWS 6 in San Diego by investigative reporter, John Mattes, who has proved quite sympathetic to our plight. I recently was interviewed by Bob Mattox on our local radio station KFBK and the interview was aired on May 29, 2006, in an attempt to warn other businesses to beware of IPA's high-pressure tactics and false promises of a 3-to-1 profitability assurance for a return on their investment. We have also posted a complaint to the California Attorney General Department of Justice on June 2, 2006, and on June 9, 2006 we mailed a complaint to the Illinois Attorney General, Lisa Madigan, who has recieved more than 200 complaints and is investigating the company.
We have lost over $45,000 in exchange for non-industry specific advice. We had to pay for these fraudulent "professionals" to be flown in from various parts of the country and housed at our expense for the duration of their consulting assignment, because they were supposedly the "best match for our business." One example of the advice we paid for was to improve our cash-flow by postponing payments to vendors as long as possible.
They failed miserably to fulfill any part of their agreement and there was no value in their "consultation." Moreover, when it came to collecting money each week, their high-pressure tactics were unethical and stressful. This is a case of premeditated deception from beginning to end. For example, they spent considerable time interviewing our employees (something that was never agreed to by us) and gathering information to construct an employee incentive program, which we never received because they then determined we were not profitable enough. They re-aligned our chart of accounts, in such a manner that it upset our CPA, which thrust more work upon us to straighten it up. They created a tremendously time consuming cash-flow program which requires us to retrieve data from our existing cash-flow reports and re-enter the data into theirs, adding no new information. They created a Bill of Materials ("BOM") using a program which we do not use, and again requires us to manually and laboriously retrieve and re-enter information when a BOM is available using our software and draws the information directly from within our database. They emailed us an employee handbook they had promised, after their false services, yet once again, it was not designed for our company as originally promised. Everything they produce is from a boiler plate template, as evidenced by incorrect information in their "custom" documents. During the sales presentation a verbal assessment detailing our areas of interest and need are ageeed upon to determine the best analysts to send. It seems that the next analysts on the rotation are sent, with no regard for a match since they all are trained to reproduce a one-size fits-all program, and with no intention of fulfilling the needs we agreed to during the sale.
We were let to believe throughout the grueling experience that they were working on our five year pro forma for budgeted values, the exit strategy and the plan for succession which was in our consulataion outline and the reason we had hired them. They did not even touch on these consultations because they ran out of time performing menial duties, which we never agreed were a trade-off at a cost of $235/hour. They also charged us to fly in their "experts" at an added cost for airfare, hotel, car rental, miscellaneous expenses and per diem allowance. They said that their huge volume useage ensured reasonable rates and that we would not be "gouged". That was a complete lie also. The salesman even went so far as to borrow our phone book to call and get rates for the Red Roof Inn and reported back to us that they were $49/night. Our consultants did not stay at the Red Roof Inn and their rates were double the represented rate. They did not rent an economy car, but a mid-sized luxury car. One week our consultant showed up in a Cadillac, assuring us we got it for the same "bargain" rate. We would have been better off booking the airfare ourselves because it was no bargain either and at least we would have benefitted from the mileage.
All fees are collected prior to the completion of the service. They left us with a binder containing their programs, to flouder on our own, with the expensive advice to purchase "Excel for Dummies" since it was known we did not utilize that particular software in our company and did not know how to use their programs.
After my second letter to IPA, they offered to send consultants back to our place of business, at no charge to us, to perform what they had promised to perform in the first place. Their presence was disruptive and set us back several thousand dollars. We do not trust this organization and do not want them anywhere near us to complete their swindle. Not only did it cost us $45,000 in fees, but we have lost three and one-half weeks of production time, equaling at least that amount. In addition, I have a stress-related health complication that I have developed as a direct result of the trauma this has caused.
I feel that other businesses need to be protected from these predators. Even if a business attempts to check them out on-line, the countless sites that are available for review are clearly IPA sites, which one may not be aware of unless they have become victims and are familiar with their tactics. By then it is too late. These sites, as well as their sales brochures display "case histories" and client satisfaction comments for every imaginable category of business, which never list any actual client or business name. They simply say, "President of a Plumbing Company", or Job Shop Owner".
The New York Times' lead story of May 7, 2006 quotes IPA owner, John Burgess, a disbarred New York lawyer with a criminal record for attempted larceny and patronizing a 16-year old prostitute, as saying, "We make it a point at I.P.A. to judge people on their performance, not their past". With his past it is not surprising to see that character is not a qualification for employment at IPA. Conversely, this would provide a welcome environment for those who lack ethics and perhaps have a shady past.
This is a matter of national interest as small businesses are the backbone of our American economy. Many people depend on small businesses for employment and this organization is killing the goose that lays the golden egg. Each complaint against them counts. We were one of the uncounted, unknown victims until now. Without doubt, there are countless others. Make your voice heard and stand up agaist this corrupt organization!