Lessons Learned From a Failed Ivy League Entrepreneur

A "Case Story" By Chris Cononico
 

Chapter Forty

Unfortunately, just when we thought we had hit rock bottom, the carpet got pulled out from under us again. Just as we were finalizing our first official press release with our PR firm, things suddenly took a turn for the worst. Because of all the newspaper headlines, we began to receive calls from State Attorneys General, requesting information about our company. There was never any formal inquiry process, but those calls really freaked out our staff.

We immediately forwarded our information, but some of the Attorneys General didn’t wait before they began commenting to the press. They had no qualms about issuing the following kinds of statements:

 Jeffrey B. Pine, State Attorney General of Rhode Island was quoted in the Providence Journal-Bulletin on May 14, 1998 as saying, “We believe that this is a scam designed to lure unsuspecting parents and students.”

 On May 12, 1998, the Hartford Courant quoted Richard Blumenthal, the State Attorney General of Connecticut, as saying “the company [NCRB] listed on the letter is fake.” He then went on to say, “This is a striking example of people preying on the anticipation and anxiety of students about to go off to college.”

 The Florida Times reported May 6, 1998 that its State Attorney General, Bob Butterworth, “warned parents and students yesterday not to fall for a debit card scam that fools people into thinking their card is official university identification.”

 New York Attorney General, Dennis Vacco, was quoted in the Times Union on May 7, 1998 as referring to our program as “nothing more than ‘Scamming 101’ – a blatant misrepresentation that puts the company on the dean’s list for deceptive business practices.”

I remember feeling more than a little dazed by these negative statements from such highly regarded officials, like I was being punched in the face from every direction. I was almost in disbelief about how things had gotten so screwed up. Now, our names were in print under newspaper headlines about “Campus Fraud,” with allegations from universities, angry parents and students, and state Attorneys General. All in a day’s work, I guess.

We found an attorney, who came very highly recommended by a friend of George’s family. We had no choice but to retain him, just to make sure things didn’t get any more out of hand. I mean, just receiving a phone call from the office of an Attorney General had us freaking out. Unfortunately, hiring a good lawyer also meant hitting up our friends and families for more money. That’s because our company’s balance sheet didn’t have the cash available for us to deal with additional legal costs.

While our lawyer worked to resolve the situation with the Attorneys General, we were prohibited from speaking to the press. Our lawyer reasoned that a press blackout was necessary until we got the situation under control. Whenever a newspaper contacted us with a question, we had to respond with the official “No comment.” Unfortunately, it also meant that anyone could say anything they wanted about us, and we couldn't give a rebuttal.

I learned a valuable lesson about PR from all of this: Never blackout the press if you can help it. If you don’t tell your story, then someone else will tell it for you, but you might not like what he or she says. There were a lot of people telling our story for us, and I didn’t agree with what they were saying. We screwed up our marketing, but there was also a good product to be salvaged. Unfortunately, nobody cared about it.

We began seeing some strange stories appear about us in the press. We saw one story about how some entity that called itself the “Cyber Police” took credit for single-handedly bringing us to justice. We didn’t recall ever hearing from them and we didn’t know what they implied by bringing us to justice.

One night my parents called me from Queens sounding very serious. They were watching television when they heard the announcer say, “Stay tuned and learn how a New Jersey business is trying to scam your children out of money with a fraudulent campus card offer!”

“No!” my parents thought. “It couldn’t be.” They remained glued to the TV awaiting the report. Sure enough, the 7 o’clock news had a report on our company and the alleged scam. It listed my name and went on to bring cameras into a local high school, so that a reporter could interview seniors with loaded questions that resembled, “How did you feel when you realized that you were scammed?” The answer was inevitably something like, “Um… it made me mad.”

My parents then watched as the reporter interviewed our office cleaning lady as the star witness, testifying that she had never met us before. I think this was meant to imply that we didn’t really exist. It was absurd.

Gradually, there were fewer and fewer articles and, suddenly, it was as if everyone grew bored of the whole affair, and it disappeared from the newspapers. We ceased to be under the spotlight. By that time it was too late.
 

Copyright  2005 by Chris Cononico
All rights reserved. No part of this manuscript may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without permission in writing from the author, except by a reviewer who may quote brief passages in a review.