The hook: a free seminar touting the name of self-proclaimed “America’s #1 Real Estate Investor” Dean Graziosi. The promise: learn the secrets to real estate investing success. The initial investment: books and DVDs. The closer: seminars, workshops, and counseling with industry professionals (mentors). The cost: $19.95 to tens of thousands of dollars. The result: reportedly disappointed consumers looking for not only money, but their time back. After more than a year investigating consumer allegations about the validity of the promises made by the Dean Graziosi brand, Better Business Bureau (BBB) reveals findings on whether a new Dean Graziosi brand is equipped to fulfill promises.
Who is Dean Graziosi?
According to www.deangraziosi.com, Dean Robert Graziosi is a bestselling author known for his long running infomercial series on late night television offering real estate books. As a real estate investor and expert, Graziosi promises to teach the secrets to successful real estate investing using books, DVDs, seminars and workshops. “Profit From Real Estate Right Now,” “Your Town Your Profits,” and “30 Days to Real Estate Cash” are some of the books written by Graziosi, with “Be a Real Estate Millionaire - Secret Strategies for Lifetime Wealth Today” known as one of his best sellers.
In 2002, Graziosi formed Dean Enterprises, LLC that served as a creation and production company for his real estate information products and infomercials. The first real estate program was entitled “Think a Little Different” and quickly gained popularity across the nation.
In 2003, The Dean Graziosi Success Academy was founded to “teach people, in great detail, the process of real estate investing.” Partnering with Professional Marketing International (PMI), Graziosi offered a comprehensive guide to successful investing. In 2006, the name was changed to the Success Academy.
In 2010, Dean teamed up with Insider’s Financial to deliver live events across America. Due to his well-known name in the real estate industry, customers eagerly attended the live events - seminars or workshops - in various states that included Florida, Massachusetts, Indiana, California, Montana, South Carolina, Texas, Illinois, Pennsylvania, New York, Hawaii, Georgia, New Jersey, Oregon, and Arizona, to name a few.
BBB Business Review Summary:
Complaints and Inquiries
Starting in 2011, BBB of Central, Northern and Western Arizona (BBB) began receiving complaints about local company Dean Enterprises, also known as Dean Graziosi, located at 3901 E. Roeser Road in Phoenix, AZ. To date, BBB has received 22 complaints against Dean Enterprises alleging advertising/sales, billing/collection, delivery, guarantee/warranty, and problems with product/service issues, involving not only Dean Enterprises but also three other companies with connections to the brand: Insider’s Financial, Insider’s Edge, and Professional Marketing International (PMI). Over 20,000 inquiries have also been received by BBB in the last 36 months for Dean Enterprises, more than 10,000 in the past year.
Currently, Dean Enterprises has an F rating with BBB, on a scale of A+ to F. Even though Dean Graziosi has responded and resolved the 22 complaints filed against his company, complaints suggest significant consumer confusion. Dean Enterprises’ F rating is a result of: BBB’s concern with the industry in which the business operates, number of complaints filed compared to size of business, one (1) serious complaint, and failure from the business to resolve underlying cause (s) of pattern of complaints.
Specifically, complaints reveal consumer confusion involving the four previously mentioned companies; confusion confirmed by company responses to complaints. Dissatisfied consumers submitted complaints against the company they thought provided the service or issued the product purchased. All four companies have responded to at least one complaint stating the consumer could not be found and must have attended an event or purchased an item from a strategic or event partner. The company then offers to forward the consumer's information to the “correct” company as resolution to the complaint, and in most cases, the consumer receives a full or partial refund. For this reason, most complaints show as "assumed resolved" for all four companies, as BBB assumes the issues were resolved, particularly if the consumer does not contact BBB again with an update.
“While our end goal was to address the underlying cause of complaints, a main goal was also to report the right information in our files in terms of what companies were offering what products and services,” said (Arizona) BBB President Matthew Fehling. “For this reason, it took over a year for BBB to complete its investigation and untangle the web of confusion stated in consumer complaints.”
In an attempt to clarify the confusion, BBB of Central, Northern and Western Arizona met personally with Dean Graziosi earlier in 2013 – in addition to regular communication - where he stated he licensed his name to companies such as Insider's Financial and Insider's Edge for events, and used PMI for fulfillment purposes.
Complaint Breakdown by Company:
Even though BBB of Central, Northern and Western Arizona has only received 22 complaints against Dean Enterprises, LLC, Utah’s BBB received 33 against Insider’s Financial and 25 against Insider’s Edge, which seem to have a connection to Dean Enterprises, LLC. Professional Marketing International (PMI) received 302, but not all have a link to Dean Enterprises since they are a fulfillment center for several companies. More than 85 percent of complaints against the three companies concern issues with either product or service or involve advertising and sales issues.
“While complaints have been assigned to specific companies based on whom they paid for products or services, complaint details show consumers have a strong, presumed association to Dean Graziosi, which consumers could find potentially misleading,” added Fehling.
The complaint summary below is a reflection of issues presented by consumers who purchased a product/service or attended a seminar/workshop because of the presumed association to the Dean Graziosi brand.
Issues with Books, DVDs, and Online Products
A recurring theme in complaints relating to products involve unauthorized, recurring charges after product purchase. One complainant stated she was charged $39.95 for more than six months without her knowledge after buying a book advertised for $19.95. In her case, she ordered the book after watching an infomercial wanting to learn the secrets to real estate investing, while others purchased the products at seminars or workshops. Other complaints claim issues returning unwanted merchandise and obtaining a refund.
Issues with Seminars, Workshops, and Coaching
Complaints about free seminars claim misrepresentation of the information to be provided and that Dean Graziosi would be present. The free initial 90-minute real estate investing seminar is advertised as a complement to books and other information, promising consumers the ability to learn industry expertise that will result in real estate investing success. To entice consumers to attend, free digital cameras, MP3 players and tablets are used as incentives. However, several complainants allege not receiving the promised free items, with a few obtaining them only after filing a BBB complaint.
“On the invitation it was promised that those attending with a reservation would receive as one of the gifts a free MP3 player or video MP3 player,” said a complainant. “After the seminar, we were only given a request form to fill out and send, not the promised items. To date and after several calls...only one cheap camera has arrived.”
Other complaints state the free seminars run longer than advertised and do not provide information on real estate investing. Instead, they serve as a segue to gather consumer information such as salary and retirement numbers, along with available credit.
“At the seminar, all the participants are spoken to separately by the Dean Graziosi people to find how much money you have to invest in the program they are selling,” stated a consumer. “We are told there is to be no networking during the seminar or we will be asked to leave, but after the seminar was over, my husband and I spoke to a few of the participants in the parking lot and discovered…two people who spent $3,000 and $6,000 received the same program me and my husband purchased - we paid $12,000!”
Complainants also claim the free seminar only serves to enroll attendees for a 3-day workshop costing $1,997. As an incentive, attendees are told that if they make a certain amount of deals within a specific time period employing the techniques learned at the 3-day workshop, they will be reimbursed for its cost. However, consumers allege there are additional costs associated with obtaining a “deal”’ that are not disclosed, making it difficult to meet the requirements of what the company considers appropriate. Hence, consumers report feeling misled after paying and attending the 3-day workshop since they’d hoped to learn real estate tactics to help them cover the workshop cost.
“After attending their 3-day workshop at the cost of $1,997...it was then revealed that you would have to spend another $495 to buy an LLC to use Insider’s cash to purchase property,” stated a consumer. “Then it was revealed all the mistakes you can make if you try to do it on your own with only Insider’s cash customer support line. That what you really needed was the 3 days of training in Las Vegas with one mentor to work with at the cost of $40,000.”
Attendees of the 3-day seminar claim they are encouraged to purchase additional products necessary to succeed. One of the products is a package that includes coaching from an industry expert. Based on complaints, packages presented at the 3-day seminar cost between $20,000 and $50,000. Issues reported by consumers include the inability to get in contact with the assigned coach or mentor, resulting in no gain from the package purchased.
On more than one occasion and in several cities, staff at local BBBs attended the initial free seminar and found many consumer allegations to be true. It appears consumers who attended the free seminar are pitched the 3-day workshop. Dean Graziosi was also not present at any of the seminars attended by BBB staff.
BBB also found that upon entering the seminar, consumers are asked to provide personal financial information such as net earnings and 401k balances, which consumers should always exercise caution in sharing.
BBB did not attend the 3-day workshop or any other programs offered by Dean Graziosi, nor were any products purchased.
After reviewing Dean Graziosi’s advertising materials and attending the initial free seminar, BBB challenged claims concerning testimonials and endorsements, business name and trade style, and general consumer confusion regarding the business’ products and services. While the company promised to address BBB’s concerns, and some have been addressed, only future consumer interaction with the brand will indicate whether the company resolved the underlying cause of complaints.
“Even though not all concerns have been addressed by Dean Enterprises, recent communication indicates the company is willing to work with BBB to resolve the underlying cause of complaints in an attempt to improve the Dean Graziosi brand,” said Dory Gosar, BBB Trade Practices and Investigations Manager. “We appreciate the company’s willingness to work with BBB and allowing us to live our mission of improving marketplace practices.”
Particularly, Dean Graziosi indicated he would stop licensing his name to other companies as of mid-November 2013, specifically Insider’s Financial and Insider’s Edge. While it is unknown whether other companies have stopped using Dean Graziosi’s name, his website continues to advertise live events. Graziosi stated he would conduct live events under his own name moving forward and address BBB’s concerns relating to consumer confusion. BBB has not received a complaint against Dean Graziosi since October of 2013.
Consumers may contact BBB to report issues involving the Dean Graziosi brand at 602-264-1721 or www.arizonabbb.org.
About BBB of Central, Northern & Western Arizona
BBB is an unbiased organization that sets and upholds high standards for fair and honest business behavior. In 2014, people turned to BBB more than 165 million times for BBB Business Reviews® on more than 4.7 million businesses and 11,000 charities, all available free at bbb.org. Incorporated locally in 1938, BBB Serving Central, Northern and Western Arizona is supported by over 11,400 BBB Accredited Businesses. Businesses that earn BBB Accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. BBB provides objective advice, free business reviews and charity reports, and educational information on topics affecting marketplace trust.