Utility Warehouse Discount Club – Scam Opportunity? [REVIEWED!]
The Utility Warehouse Discount Club has grown to massive proportions, but is this because it is actually a good opportunity? Or is it because their agents are just really good at getting people to sign up and recruiting in other agents?
Is Utility Warehouse Discount Club a scam in disguise?
In this review we'll explore what exactly Utility Warehouse Discount Club is and what all they offer, the business opportunity they provide, complaints, pros v cons and more.
Whether you are just looking to join as a customer or join the business opportunity... read this first.
What Is The Utility Warehouse Discount Club?
- Website: utilitywarehouse.co.uk
Utility Warehouse (UW) (aka Utility Warehouse Discount Club) is a brand of the Telecom Plus company. The UW brand was launched in 2002 and has since become one of the largest independent energy suppliers in the UK, with over 600,000 customer accounts and over 40,000 independent distributors. But besides just energy, they also supply a range of other utilities.
The idea is that with UW you can manage all of your utilities on one single bill, and of course get discounts.
There is no big consumer watchdog group like the BBB in the UK, so No they are not BBB accredited, but the company does have a good reputation and the fact that they were named one of the 2018 utility brands of the year reflects this.
Lastly, in addition to the utility services provided they have a business opportunity that anyone can join as an independent distributor to earn money selling UW services and recruiting in other distributors--which is where some of the scam complaints come from.
Broadband and Landline
Their broadband and landline services will supposedly provide you with "guaranteed savings on landline calls". Some of the highlights include:
- Unlimited downloads on the main and fibre optic broadband networks
- A free wireless router
Landline services start out at £18/mo and the lowest cost Standard Broadband starts at £27.99/mo, which has a download speed of 11Mbps (not very great) and has no minimum contract (now this is good).
They make a big deal about providing free landline and mobile calls to other Utility Warehouse members but I don't see why this is such a great benefit. How often are you really going to pick up the phone and chat with other members anyhow? Probably not much.
Mobile plans run on 4G connectivity and start at just £10/mo, but this only provides 1GB of data, 450 minutes, and unlimited text messages. However, that is very cheap and even their most expensive plan that provides 20GB, unlimited minutes & text messages, is only £25/mo.
- 450 minutes
- Unlimited texts
- 900 min
- Unlimited texts
- 1800 minutes
- Unlimited texts
- 3000 minutes
- Unlimited texts
- Unlimited minutes
- Unlimited texts
There is no doubt the rates are low here, and they claim so much so that they are 70% less than competitors.
In addition to the service plans they also offer a number of iPhones available for purchase through them where you will pay a low monthly fee until they are paid off.
Energy Warehouse also provides gas and electricity at discount prices. They make the claim that their prices are lower than the "big 6" and from what we can tell this has been, and is, true.
However, there are cheaper deals out there from other discount companies that aren't part of the "big 6".
Some highlights of their energy deals include:
- Guaranteed savings. They guarantee that their rates will be lower than that of the 'big 6' suppliers on average.
- Fixed prices. Right now they have a "Double Gold" fixed tariff available that provides guaranteed prices for over a year.
One of the most attractive benefits of UW is that you can manage all of your utilities on one bill. They offer 3 different utility bundles that you can choose from, which not only provide you with this benefit but also have some added savings.
- Double Gold
- Phone & Broadband + Mobile + Energy
- Potential to save up to £682/yr
- Gold Energy
- Phone & Broadband + Energy
- Potential to save up to £348/yr
- Gold Talks
- Phone & Broadband + Mobile
- Potential to save up to £466/yr
With the Double Gold & Gold Energy bundles that provide energy they also offer free light bulb replacement services where they will replace all your home's lights with LED lights typically worth £300 - £500. This is said to be able to save you around 15% annually on your electricity bill.
And, as an added benefit of being a member, you will also be able to save money at over 2,000 retail partners when shopping online.
What I'm talking about here is the cashback program they have, similar to the CoinOut App, where you will get a small percentage of money back (1-4% usually) if you shop at... Argos, Hotels.com, Expedia, Sainsbury's halfords, Thortons, and about 2k other places.
- Home Insurance
The home insurance offered here has been rated at 5 stars by defaqto and Moneyfacts, and is said to provide an average savings of £115 per year compared to other insurance policies.
- Bill Protector
Their bill protector service covers accidental death up to £10,000 and also covers utility bills up to £250/mo if you are hurt and unable to work due to something that was not your fault.
- Mobile Broadband
The mobile broadband services come with a Pocket Wireless Router and allow you to connect up to 14 devices.
- Additional Benefits
And lastly, some additional benefits of being a member that I will briefly mention include the Gourmet Society Card that can save you money when eating out, and the cashback card that saves you 1% everywhere you used it and up to 7% at over 50 top retailers.
As mentioned, the UW does not run any advertisements and relies completely on an independent sales force to do all the marketing and selling.
Anyone can join the opportunity as an ID (independent distributor) to make money selling UW services as well as recruiting in other distributors.
Cost to Join
The cost is £100 or £50 if you join as a customer as well, or if you are already a customer.
This startup cost provides you with training and a Starter Pack, which contains marketing materials for you to get your independent UW business up off the ground.
There are no educational requirements or anything like this to get started. However, new distributors are required to go through free online training provided by UW before they can start earning money.
This training includes the College of Excellence (COE) online training and the Getting Started Classroom online training, as well as the Team Building course that qualifies distributors to earn Group Residual Income.
In addition to the online training, new distributors will also be able to have experienced distributors accompany them for the first 45 days in the real world, which will help newbies gain confidence and experience.
The compensation plan is pretty typical of MLMs. There are various ranks, lots of bonuses and of course there is big incentive to recruit in other distributors beneath you and earn commissions from their efforts.
1. Customer Gathering Bonus (CGB)
The CGB is paid for every new customer that you get to enroll in at least 1 of the eligible services offered, but the more the better.
This bonus will range from £2.50 to £40 depending on the amount of services bought.
- 1 service - £2.50
- 2 services - £5
- 3 services - £10
- 4 services - £20
- 5 services - £40
2. Fast Start Bonus
Just like pretty much every MLM out there, UW offers a fast start bonus where new distributors can hopefully earn some quick cash.
There are 4 different levels of this bonus (4 different payouts) and you can achieve just some or all of them.
- £100 bonus if you enroll 3 Gold Customers in 30 days
- £150 if you enroll 6 Gold Customers in 90 days
- £250 if you enroll 20 customers in 180 days
- £500 if you enroll 50 customers in 365 days
*Gold Customers are people who purchase one of the Gold utility bundles we went over above.
3. Residual Income
The residual income is the income that comes in on a monthly basis from the people that you have personally enrolled as well as those that IDs recruited in beneath you have enrolled. This is where the money really starts to add up and as you grow your business and customers stay with UW.
- Personal Residual Income
- This is the recurring income that you earn each month from the customers you have enrolled. They say that you can expect to earn an average of £30 - £60 per year for each Gold Customer that you have personally enrolled.
- Must have at least 3 personal customers to quality
- Group Residual Income
- This is where the MLM part of the business opportunity starts to come into play. Here you earn monthly income from the money that IDs recruited in beneath you earn.
- Must complete the Team Building training course online to qualify
Example: You recruit in Rob (level 1). He then goes out and recruits Bill (level 2). then Bill recruits Sally (level 3), and so on. This continues down multiple levels.
*The % commissions you will be paid here vary a lot depending on the service.
4. Supporter Bonus (SB)
The supporter bonus pays distributors that assist new distributors in getting customers in their first 45 days.
The idea is that you will get help from an experienced distributors when you join and then you will pay it forward after you have experience of your own.
5. Leadership Development Bonus (LDB)
The LDB gives leaders incentive to support promotions withing their "teams", aka downlines. What this means is that you want to help other people in your downline move up the ranks, which I'll talk about in more detail soon.
- £300 bonus if team members is promoted to Team Leader
- £500 bonus if team members is promoted to Senior Team Leader
- £2,000 bonus if team members is promoted to Group Leader
- £5,000 bonus if team members is promoted to Senior Group Leader
6. Promotion Bonuses (PB)
These bonuses reward IDs for reaching higher ranks within certain amounts of time. The higher you go the higher the bonus is, starting at £300 when you reach Team Leader up to £20,000 when you reach National Network Leader.
If you are one of the very few people who are able to climb up all the ranks and earn all of these bonuses you could earn £38,500 just from this.
- £300 if you reach Team Leader with 6 months of reaching Qualified Distributor
- £500 if you reach Senior Team Leader within 9 months of reaching Team Leader
- £2,000 if you reach Group Leader within 12 months of reaching Senior Team Leader
- £5,000 if you reach Senior Group Leader within 24 months of reaching Group Leader
- £10,000 if you reach National Group Leader within 36 months of reaching Senior Group Leader
- £20,000 if you reach National Network Leader within 48 months of reaching National Group Leader
7. Plus Clubs
If you are able to enroll high amounts of personal customers you will be promoted to Plus Clubs and will earn higher amounts of Personal Residual Income.
There are different levels of Plus Clubs that you can be promoted to starting at 50 personal enrolled customers and going up to 1,000.
Additionally, you will also earn some bonuses, ranging from a simple pin to all expenses paid vacations.
8. Distributor Car Plan
The car plan is designed to help lower the cost of owning a brand new BMW Mini.
You must have an average monthly Residual Income of at least £200 over the past 3 months to quality.
This is a bonus for distributors looking to buy a house. Here UW will provide a loan for a new house of £25,000.
In order to qualify you need to have enrolled at least 40 customers per year for the past 4 years
*If an ID gathers an average of 4 customers per month for the next 5 years after receiving the lone then it will not need to be paid back.
10. Retirement Plan
IDs who make it to the rank of Senior Group Leader and above are able to "retire" from the business and continue to collect Residual Income, which could continue to come in for years and years to come, depending on the activity of your group, aka downline, or course.
Like all MLMs there are various ranks within the company that you can climb up as a distributor, 8 in total. As you move up the ranks you will get more access to the compensation plan and be able to earn more and more money as your downline, aka team, grows and you earn money from them.
How do you move up the ranks?
As you will see below, it all comes down to 3 things:
- Enrolling Personal Customers
- Recruiting in Distributors
- and Helping Distributors move up the ranks, which is all about enrolling customers and recruiting distributors as well.
- Starting rank
- Qualified Distributor
- Need to enroll 3 customers
- Team Leader
- Need to have 10 personally enrolled customers and you need at least 3 Qualified Distributors that form 3 separate legs, and that have made it to the Qualified Distributor rank
- Senior Team Leader
- To make it to this rank you are going to need at least 5 separate qualified distributor legs or higher. Plus you will need a minimum of 15 personally enrolled customers and at least 250 group customers
- In the example below you can see that some legs are made of Qualified Distributors and others are Team Leaders. Anything qualified or above is good.
Next we have the Group Leadership positions. In order to move up to these ranks you will need to focus on team building. The goal is to help others in your team move up the ranks by gathering customers and recruiting in distributors.
- Group Leader
- Need a minimum of 20 Personal Customers, 750 total Group Customers, 2 Qualified Distributors, 3 Team Leaders, and 1 Senior Team Leader.
- Senior Group Leader
- Need a minimum of 25 Personal Customers, 2,000 total Group Customers, 3 Team Leaders, 2 Senior Team Leaders, and 1 Group Leader.
- National Group Leader
- Need a minimum of 50 Personal Customers, 7,000 total Group Customers, 1 Team Leader, 2 Senior Team Leaders, 2 Group Leaders, and 2 Senior Group Leaders.
- National Network Leader
- Need a minimum of 100 Personal Customers, 25,000 total Group Customers, 2 Senior Team Leaders, 3 Group Leaders, 2 Senior Group Leaders, and 1 National Group Leader.
The Comp Plan In a Nutshell:
Every MLM compensation plan will vary, but they are all the same at their core. It is MLM (multi-level marketing), so the goal is to sell products personally as well as to recruit other distributors in to sell products and build a downline to grow the business.
Every MLM has the basic pyramid structure at its core, where the incentive to recruit more people into the business is that you can earn commissions from their efforts.
Is Utility Warehouse a Pyramid Scheme?
There is no doubt about it... Utility Warehouse has a compensation plan with a pyramid structure where distributors earn money by recruiting in other distributors.
However, all MLM's have this basic structure and not all are illegal pyramid schemes.
Utility Warehouse is actually far from being a pyramid scheme and I'll explain why.
The difference between a pyramid scheme and a legit MLM is that the pyramid scheme relies too much on recruitment. A legit MLM's revenue comes largely from real customers buying their products whereas a pyramid scheme (often disguised as a legit MLM) will bring in much of its revenue from recruitment of others into the business and usually forcing them to purchase products.
So, the big question is: how much revenue does Utility Warehouse bring in from recruitment of new distributors... and the answer is not all that much in comparison to the revenue coming in from real customers.
While we don't have access to all the numbers, the fact of the matter is that they have over 600,000 customer accounts and over 40,000 independent distributors, which is a massive difference.
Over 600,000 people have bought into UW as regular old customers... and haven't joined the business opportunity.
So yes, the compensation plan does have a pyramid structure, but this is far from being considered an illegal pyramid scheme. There are many still legitimate MLMs out there, like HempWorx and Avon for example, that lean much further to the pyramid scheme side of things.
That said... don't think because of this it is a great business opportunity. Earning good money isn't as easy as people are often led to believe.
The problem with MLM opportunities is that their failure rates are extremely high. This is due to the very structure (the pyramid) that they have in place, which funnels money from the bottom to the top, usually resulting in only the top few percent making high amounts of money.
Unfortunately Utility Warehouse doesn't publish any sort of earnings disclosure or any distributor earnings statistics. So, we have to look at other sources.
You do find some salaries posted on Indeed from distributors, which claim to earn around £25k per year, but these stats don't give you the big picture.
On Indeed anyone can post their salaries, which is the reason there are so many different job titles listed above.
The problem with this is that it is not even close to being representative of the distributor sales force as a whole. This is particularly true when it comes to MLMs.
In an article published by The Guardian they break down distributor earnings pretty well. The article is a couple years old but there is no reason to believe the stats would change all that much. Here's what they found:
- Commissions paid to distributors for the year was £21.1 million
- There were 41,717 distributors total
- This means the average earnings per distributor was £505 for the year
That's not too pretty of a number. Yes, they do provide incentive for veteran distributors to help out new distributors, and they do place a good deal of focus on enrolling customers rather than just recruiting... but the bottom line is that it is still a MLM and numbers like this are not atypical.
BUT... of course this number doesn't take into account all of the distributors that give up to early and just don't really try much.
The takeaway here: Don't fall for the hyped-up promotions of being able to live some extravagant dream life as a Utility Warehouse distributor.
The average rating on Trustpilot for Utility Warehouse is about 4 out of 5 stars... and this is with thousands of reviews left by customers and distributors alike.
So overall the company is well-liked. However, there are complaints.
Some of the complaints on Trustpilot that are actually worth bringing to attention include ones like that shown below, where a customer was pressured into signing up for UW services and experienced terrible reception with their mobile service...
There were also multiple complaints I came across similar to that shown below here, which is about being monthly prices skyrocketing without the consumer knowing...
And there are quite a few complaints about the broadband not being all that great of a service...
However, we don't know the stories behind these complaints so you have to take them with a grain of salt.
For example, the AT&T mobile phone service is absolutely horrible where I live... but does this mean it sucks? Absolutely not... coverage just isn't that great in my area.
Some people complain about broadband, mobile, and their energy services... but the majority don't. Just keep this in mind because sometimes reading a bunch of complaints can be misleading in a negative way.
Pros v Cons
- Provide good quality utility services that most people can save with
- One bill for all your utilities
- Business opportunity available
- Far from being a pyramid scheme
- Cheaper rates available elsewhere for some services offered
- Broadband and mobile coverage might not be that great (would depend on your area just like it would with any provider)
- Hard to make money with business opportunity due to MLM structure
Is Utility Warehouse a Scam?
The short answer is No. They are a legitimate company that provides legitimate services.
But then why are some people calling the place a scam? There are different reasons for this, some of the more notable ones being...
- Pushy distributors getting people to join
- Poor broadband and/or mobile coverage
- Rising prices
With any MLM there will be pushy distributors that aren't ideal for the company image, but this just happens. And the poor broadband and/or mobile coverage, as mentioned, is going to depend on where you live but generally speaking they seem to provide good quality services in this area.
The complaints from people who claim to have had no idea that rates would go up are the only big concern here... but information about these complaints is lacking.
All in all, UW is far from being a scam.
Conclusion - Worth Joining?
Okay, so let's do a quick recap here.
Utility Warehouse Discount Club is one of the largest independent energy providers in the UK and provides a range of utilities, which customers can bundle together and potentially save decent amounts of money on. Additionally, they offer a business opportunity in which anyone can join the business as a distributor.
Now whether or not it is worth joining is completely dependent on what you are looking for. Are you looking to save money on your utilities? Or are you looking to earn money with your own home-based UW business?
If you are just looking to become a customer then it couldn't hurt to get a quote and see what you can save. But if you are looking into the business opportunity this is something you are going to want to think long and hard about.
Alternatively, if it is the home-based business opportunity you are interested in, then I'd suggest taking a look at what I do to make money from home... which is something I've been doing since 2015 and it works great.
Anyways... I hope you enjoyed this review and found it helpful.
Comments or questions? I like to hear back from my readers 🙂 Just leave them below...