Consumer Fraud N2 Publishing scam

Good morning,
I know this was mentioned on this forum before, but there was not that much there because the person creating the thread did not provide enough detail.

N2 Publishing created a model that unfortunately results is "scamming" (but not really) small business owners and I am one of them.

This is the process:
Area director (independent franchisee they call them) reaches out to the small business and presents themselves as working with affluent local neighborhoods and is looking for local businesses that would be a great fit for their residents. These are the neighborhoods where flyers are prohibited, gates, front gate-guards etc. Obviously as a small business you jump on the chance to reach to that market.

You get one on one meeting with the Area Director and he/she asks about you, your business, your experience, etc. It feels like an interview the whole time. He/she describes you how he/she has close relationships with the residents, he/she puts out monthly get together's in the neighborhood with the residents where the businesses he/she works with get to have one on one conversations. In about 40 minutes he/she pulls out an agreement; N2 Publishing agreement. This comes out of nowhere.

I signed, hundreds of other business owners signed as well. This agreement is generally for a VERY LONG term. I was able to negotiate mine for only 18 months, but most businesses are stuck for 3-5 YEARS! The agreement itself has this language:

"All agreements received and signed by Merchant are non-cancelable by Merchant unless full agreement price has been rendered." You place your initial by this.

After about 6 months you find out that this magazine is not doing a single thing for you so you try to cancel. After you raise hell for weeks of them refusing to cancel they give you one option and one option only, pay 2 months forward (on longer term agreement it looks like they ask for 20% of remaining balance; we are talking several thousands of dollars $500-1,000 per month charges) and we will let you go. Most of us pay to move on with our lives.

Are there any legal steps to take against this company and/or its Area Directors?

Reasons I signed:

1. I assumed she was an HOA representative
2. Having monthly events in the neighborhoods was very appealing (THIS IS NOT PART OF THE AGREEMENT HOWEVER)
3. I did not have a chance to research prior. (I've signed 100s of agreements and this caught me so off-guard I must have been out of my mind to sign this)

I am generally in the boat of live and learn, but they've done this to 100s of businesses. All the reviews (not the fake positive ones) have to the letter same experience as mine. Their scam is always the same.

Any recourse, us and several other businesses filed with Texas Attorney General, BBB and Federal Trade Commission but that won't do anyone any good.

The BBB is largely ineffective because it presumes that the business cares what the BBB file says (they are a private entity).

Your direct recourse is to sue them for the money you paid them. I suspect it's small enough to pursue in small claims.

flyingron said:

The BBB is largely ineffective because it presumes that the business cares what the BBB file says (they are a private entity).

Your direct recourse is to sue them for the money you paid them. I suspect it's small enough to pursue in small claims.

Click to expand...

About $7,000 from my business. I thought about that. They are based in North Carolina so I can't sue them in Texas correct? I am thinking if I can sue the Area Director since they are independent and selling this. I know I will never get the money even with a judgment but at least it will make her think twice about selling to another business.

You can sue them in Texas (up to $10,000). The downside is you may have a hard time collecting on that judgment (information here: Guides: Small Claims Cases: Pro Se Resources)

If the salesperson who "did you wrong" is indeed an independent contractor for them you most certainly can sue them directly (and likely win).

flyingron said:

You can sue them in Texas (up to $10,000). The downside is you may have a hard time collecting on that judgment (information here: Guides: Small Claims Cases: Pro Se Resources)

If the salesperson who "did you wrong" is indeed an independent contractor for them you most certainly can sue them directly (and likely win).

Click to expand...

I will reach out to other businesses this happened to as well. We might be able to bring something together. The more data there is the better.
Thanks

LTLA said:

Reasons I signed:

1. I assumed she was an HOA representative
2. Having monthly events in the neighborhoods was very appealing (THIS IS NOT PART OF THE AGREEMENT HOWEVER)
3. I did not have a chance to research prior. (I've signed 100s of agreements and this caught me so off-guard I must have been out of my mind to sign this)

Click to expand...

Those are just three reasons that you are guaranteed to lose any lawsuit you filed.

You willingly signed the agreement without investigating the offer. As long as your business was featured in the magazine and the magazine was distributed to the residents of the community then there is no breach of contract and there is no fraud.

It's just a bad decision on your part that you have to live with. That hundreds of other business owners made the same bad decision doesn't guarantee a successful lawsuit.

What area of Texas are you in? I just recently met with these people, and signed. But luckily my credit card that I used was compromised and they never got to run my card. So you never received any business from the magazine? Thank you so much for your post!!

EmilyS1984 said:

What area of Texas are you in? I just recently met with these people, and signed. But luckily my credit card that I used was compromised and they never got to run my card. So you never received any business from the magazine? Thank you so much for your post!!

Click to expand...

Please don't post to old threads...If you have a question start your own thread. Thank You.

I've worked with these guys and my experience is that most of the residents aren't going to mention the magazine when they call, because they don't care about cashing in on discounts and promotions. It's an organic thing that takes some branding and time. If you're trying to break into a luxury neighborhood, this can be an effective way to do it, but you have to be patient and let it do its thing. I know other folks who have been advertising for years and things seem to be working great for them.

If you're used to running bulk mail coupon campaigns and those seem to be getting the clients you want, maybe you're just targeting the wrong crowd.