International Profit Associates (IPA) International Tax Associates (ITA)

I received a call the other day from a representative of International Profit Associates (IPA). I visited with the representative for a minute and, sure enough, they're still "doing their thing." I also occasionally hear of IPA's sister company, International Tax Associates (ITA). I have never heard anyone say anything positive about these guys. To the contrary, I've heard many horror stories.

I first alerted you to IPA in our September/October 2003 issue. At a business presentation, I had heard a businessman named Elvis Davis tell how IPA convinced him that it could improve his business' profitability and lower his tax bill. Davis hired IPA on an hourly basis but with a total cost estimate of $11,000. But the bill grew to $35,000 and the results were far worse than useless. Damage to his company's morale, productivity and bank account took years to correct. In hindsight, he thinks it was a scam.

Inc. magazine featured IPA in its January 2000 issue. The writer, Joe Rosenbloom, said he wrote the article after receiving complaints from Inc. readers about IPA and its tactics. The article reported that a disbarred lawyer named John Burgess, a former George S. May employee with a conviction for attempted grand larceny, owns IPA. His two founding partners also had criminal records.

According to the article, IPA was founded in 1991 and posted 2001 revenue of $105 million. With an average client fee of $18,000, it served approximately 6,000 small-business clients that year. Although IPA purports to be a consulting company, only 20% of its employees are consultants. The majority of its employees are telemarketers and sales people. In researching the story, Rosenbloom had no trouble finding disgruntled clients through Better Business Bureau complaint filings.

According to the article, IPA relies heavily on:

• Massive telemarketing force and very aggressive sales tactics

• Use of credibility-garnering "signals" such as paying for high-profile spokespersons and IPA's inclusion in Inc.'s list of fast-growing companies

• Avoiding the need to provide referrals by explaining that its clients want their names kept confidential

Inc. readers wrote to the magazine's website about IPA:

Having worked there (IPA) for 60 days and participating in the unethical hard core sales pitch, my only remorse is for the two clients whom I convinced to part with a lot of money for no value."

Walt Marino

Orlando, Florida

"I signed their pressured deal. At the time it all made sense. Now I realize the huge mistake I made."

Tim Shea,

Escondido, California

I recently spent one week in Chicago training to be an IPA senior advisor. After seeing firsthand their sales tactics (very heavy handed, strong arm, aggressive techniques), coupled with the old bait & switch approach, I have decided to pass on this opportunity."

Bob Thompson,

Detroit, Michigan

Once the sale was made, a very unqualified person came in to do the work. Nothing went well."

Elvis Davis,

Memphis, Tennessee

From what I've heard of International Tax Associates (ITA), its business model is basically the same as International Profit Associates (IPA). It has terrific salespeople who are highly skilled at dealing with your concerns about their credibility, including helping you get past negative postings that you may find on the Internet. They'll argue things like:

Any large company will, over time, have some bad customer experiences. Toyota at times will have unhappy customers, but you wouldn't say that they're a scam, would you?"

Granted, you would not. But that does not address whether IPA or ITA is a scam or not.

If you have any experience at all with IPA or ITA, we'd greatly appreciate it if you'd share your experience with us. Ditto if you have paid a "business brokerage" firm or "investment bank" a large, non-refundable up-front fee but received very little of what you really wanted - buyers that were willing and able to buy your business for the prices or "multiples" that the firm led you to believe were possible. Unfortunately, people who fall victim to scams, or think they may have been scammed, rarely tell anyone about it. But this only benefits the scammers. Please resist the urge to protect yourself and help us protect other business owners like you. Call me on my cell (918-760-2715) or send me an email (David@TheBusinessOwner).