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A flat-rate cell-phone deal sounded good until the phones stopped working and company executives stopped talking


You've just perfected the dream cellular phone: Talk as much as you want to your friends in Fargo, New York, Los Angeles and all points between for $100 a month. Do you pitch the idea to AT&T and MCI and get rich in the ensuing bidding war? Start your own company and try for a new IPO record on the stock exchange? Or would you use the Internet to market your phone, Amway-style, to thousands of people who dream of a flat-rate cellular phone the way Ponce de Leon yearned for the fountain of youth?

If you're International Communications and Computers, you go the Amway route. For prices ranging from $275-$45,000, IC&C has been advertising distributorships for a so-called flat-rate cellular phone. Sales agents are supposed to get commissions as high as $35 for each phone sold, plus a percentage of sales made by agents underneath them. The company has also been offering phones for a $99.95 activation fee and $99.95 for each month of service.

There's just one problem: The phones don't work. And folks across the country who've paid for distributorships and service are starting to get nervous about a company that, from all appearances, has used a mailbox in a Maryland Heights Mail Boxes Etc. as its national headquarters.

A flat-rate cellular phone has taken on trappings of urban legend. Several companies advertise such a phone over the Internet, but no one seems able to deliver. Officials at the Cellular Telephone Industry Association in Washington, D.C., have never heard of anyone offering unlimited cellular service for a flat rate.

Charles Hill of San Diego knows all about the hunt for the elusive flat-rate phone. He's heard of IC&C, but he hasn't given them any money. He's still trying to get back the $200 he gave a different flat-rate cellular company last summer for a phone that didn't work. "I've talked to people who said they were talking to me on one," he says. "I've physically held one, but it never worked."

Since April, Hill has collected names and addresses -- but no money -- from nearly 3,000 potential customers eager to buy flat-rate cellular phones from the first company that comes through. He said he's been in touch with four different flat-rate companies, all of which offer distributorships for a price. None has come up with a phone that works. "I've talked to someone from each one of them," Hill says. "They're all good song-and-dance guys: "Yeah, it's coming. Boy, it's right there. We're all ready to go.' It's a joke."

IC&C in October began shipping phones to people across the country who had paid for their first month of service plus a $99.95 activation fee. One thing was a bit odd: All the phones had 314 area codes. But they worked fine until Nov. 18, when they were all shut off.

Marty Kincaid of New Jersey, who helped recruit agents for the company, says a customer-service representative at AT&T's fraud division told him the phones were shut off for reasons of "fraudulent subscription." AT&T confirms that an investigation is under way but will release no details. "It is under investigation, and that's as far as I can go," says AT&T spokesman David Hale. Kincaid, who has been a critic of IC&C since it rejected him as an agent (because, he says, he was asking too many questions), suspects IC&C bought a block of minutes from AT&T but didn't have a proper contract to resell the airtime.

Explanations are hard to come by, because it's tough to talk to a live person from IC&C, a company that would have you believe it's on the cutting edge of telecommunications technology. Contacted by e-mail, company officials wouldn't grant repeated requests for phone interviews. Susan Grogert, who replied to interview requests sent to IC&C by e-mail, insists: "There is no ongoing issue with AT&T or any of the other companies providing access. Those issues have been settled." However, she provides no details. She says the company has contracts with many wireless providers but will not name any.

No one can point to a case in which the company has refused a refund. In response to e-mails sent to the company, Grogert, whose position in IC&C isn't clear, says by e-mail that most folks aren't asking for their money back, preferring to wait until IC&C works the bugs out. Ann Stagner, a trucker from Jacksonville, Ark., who bought an IC&C phone and a $275 distributorship, says she thinks people will be waiting a long time.

Stagner says company officials have told her that the phones will work again within three weeks but that phone purchasers first must send their phones back to the company. "I'd be willing to bet you we never see those phones again," Stagner says. "I think it's a scam."

Stagner isn't alone. "I guarantee that everybody out there right now thinks this is the biggest scam since you're not going to believe when," says Chris Ryan, a Pennsylvania man who paid $5,000 for the privilege of marketing IC&C's phones and also convinced several friends to invest. "You would not believe the rumors that are out there right now. This is the biggest up-and-down roller coaster."

For now, Ryan says, he's 90 percent sure the company is legit, especially since he and his friends hired a private investigator after the phones went silent. "The people that I have in this are big players," he says. "These people don't take getting screwed lightly. I've had these people checked out. I have, with my friends, hired a private investigator. I have the addresses of where people live. Trust me. I'm the first person that'll take a bag of cement and stick it around their feet and give them a nice swim in a long, deep river if this doesn't come out."

Ryan won't go into detail about what the private investigator discovered that has reassured him about IC&C. He says he can't talk much about the company because of a nondisclosure agreement he was required to sign as a condition of becoming a sales agent. "I am not allowed to give out too much information," he says.

Others are more than willing to talk. Glenn Bacon of Lafayette, La., says he sent $200 to IC&C on Sept. 7 and didn't get a phone until early November. "I had about two weeks of use when the phone went down," he says. The company hasn't responded to four or five e-mails, he says. He laughs when asked whether he thinks the company is legitimate. "I have very serious doubts," he says. "I mean, if the company was on the up-and-up, we would have gotten information from them long before now." Bill Waller of California, who bought a phone and paid an additional $275 to become a sales agent, says he's reached the same conclusion: "Scam City," he says.

Exactly where the company is located is unclear. According to Network Solutions, the company's Web site is registered to IC&C at the Mail Boxes Etc. address in Maryland Heights, but the Missouri secretary of state has no record of such a corporation. Grogert says the address on the Web-site registration isn't accurate and that the company is filing an address change. The fax number on the company's Web site carries a Massachusetts area code, which Grogert says she can't explain. In an e-mail, Grogert first tells The Riverfront Times that the company is in the Washington, D.C., area. In a subsequent e-mail, Grogert writes: "IC&C is a foreign corporation and is a dba of another company based in another state." She will not say which state, which company or which country. In a Friday conference call with Stagner and other would-be sales agents, company officials provided a new address for IC&C: a Baltimore post-office box.

Ed Martin, a sales agent for the Mid-Atlantic states, says the company is moving to Washington. Where exactly? "They don't know yet," Martin says. "We don't know yet where it's going to be. I know now they're aggressively seeking real estate."

The move may save IC&C from a crowded mailbox. According to the Missouri secretary of state's office, five other companies share the same Mail Boxes Etc. address with IC&C. Grogert says she can't explain why so many companies use the same mailbox. All five -- Wholesale Communications, Consumer Business Services, Consumer Business Network, CB Properties and CB Auto Resources -- have the same agent, Mike Stockdale. Stockdale was once national sales agent for IC&C but has been terminated, Grogert says in an e-mail to The Riverfront Times. "If I can be of further assistance, please let me know," Grogert says in closing.

So The Riverfront Times asked for an interview with a Bob Blanc, who has e-mailed several IC&C sales agents concerning the status of orders and rules for marketing phones. Blanc has told Kincaid (by e-mail, of course) that he works not for IC&C but for Wholesale Communications, which tested the wonder phones for IC&C. "I'm sorry, but Mr. Blanc will not allow me to release his home phone number and wants to maintain his privacy," Grogert says in an e-mail to the newspaper. In a subsequent e-mail, Grogert says Blanc has been blacklisted from the company. Blanc also does not respond to an interview request sent directly to his e-mail address.

Stockdale is difficult to find as well. The Riverfront Times sent him an e-mail last Friday seeking information and asking him to call the newspaper. He replied, "I would be more than willing. Tell me when, I have a lot to say." Within minutes of receiving Stockdale's answer, the paper responded that a writer was at his desk that very minute. We waited all weekend. In a Monday e-mail, Stockdale said, "Name a time." The paper replied that a writer would be at his desk throughout the day. The paper has yet to hear from him.

When The Riverfront Times sent an e-mail to Jonathan Roberts, IC&C president, Roberts responded, by e-mail, that he would "be happy to help you in whatever way that I can." The paper replied that a phone interview would be most helpful. Roberts has not called. Grogert, in one of her e-mails, says Roberts decided not to talk to the paper "because of your intended slander and misrepresentation of the facts." In his e-mail, Roberts said the company is "re-structuring and upgrading everything. Please understand upfront that we are not open to the public and are still in a ... testing phase and we are not in a position to offer you a sample phone to test for yourself."

Grogert echoes that. She also says IC&C's flat-rate cellular service isn't for public consumption. "The service is not and has never been available to the public and is being tested by "beta testers' only," Grogert writes in an e-mail to The Riverfront Times. "The (IC&C) Web site is not advertised to anyone except our beta testers and we are not and have not been accepting applications for the service for quite some time." Grogert also writes that the company is paying refunds to anyone who asks but is under no obligation to do so because it isn't selling services to the public. "Given that we are not offering any services to the public, this (refunds) is not an issue anyway," Grogert writes. "Everyone who is participating in this private services test signed an agreement going in knowing that it was not open to the public and was not refundable, even though we have done so anyway."

An Oct. 25 e-mail from Blanc addressed to "future agents" sure makes it sound as if the company is peddling phones to the public. Sounding as if he were an executive for IC&C rather than Wholesale Communications, Blanc wrote: "We have completely sold out of phones for the first public shipment of 15,000 phones. All orders received prior to (Oct. 20) will be included in that shipment assuming all paperwork has been completed and all payments have been made." Blanc also wrote that sales agents could advertise, and though the company isn't taking Canadian orders, agents in Canada are allowed to market in the U.S.

On order forms distributed to agents and would-be agents last month, IC&C says the testing is complete and IC&C's contract with Wholesale Communications is in its final stage. "The final phase of the remaining contract is to assist in the opening and ramping up of the services to the public for the first 45 or so days and then turning everything over to IC&C for the final ramping up to full capacity," reads a form labeled "U.S. Contact Form." "We anticipate no further delays in completing this phase of the project."

Grogert sounds optimistic in a Nov. 30 e-mail sent to sales agents, even though she writes that the company, effective immediately, is not accepting applications for service. "We are moving forward with a solid and dedicated team," she says.

Ryan, who's still waiting to collect the first dime from his distributorship, says he thinks it's a case of IC&C offering more than it could deliver. The solution will come in January, he says. By then, the company should have solved all its problems, he predicts. "It's a crazy, screwed-up, big, huge mess," Ryan says. "And the biggest mess is this should not have been launched until the first of the year."