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Russ Dalbey: Scamming In The Infomercial Business

Updated on July 27, 2010

Late night airtime is cheap for advertisers. At 4am the barely awake and possibly vulnerable are likely to see TV spots pushing gimmicky imitation-leather wallets, closet organizers, sex hot-lines and of course questionable business opportunities.

It’s almost eerie how formulaic the typical infomercial is. There is the grease-ball scam artist in a suit willing to associate his name and likeness with the product in an attempt to win trust. Extremely vague testimonials emphasize financial freedom, rewards and how little effort it took. Yes and of course, not only can anyone do it, but everyone can be successful at it, or at least that is the implication. Clearly a widow and homemaker with a high school education can do just fine when thrown into the ocean with blood-hungry MBAs, right?

Easy, Easy, Easy!

Modern life is so complicated that nearly everyone yearns for a simple way of life. Of course if they really had to churn butter, milk cows, steal hatchlings from a chicken and murder a pig all to get breakfast, most would beg for the cushy city lifestyle back. We want an idealized, impossible version of simplicity but don’t know how to get it. When a guy like Russ Dalbey seems like he has figured it all out some are inclined to buy into it, believing they might just need the right guidance.

How does the idealized vision of simple prosperity offered by Russ Dalbey match up to the reality?

Hey there, want to buy a cheap Rolex?
Hey there, want to buy a cheap Rolex?

Cash Flow: Fact vs. Fiction

Dalbey promises that mastering his system requires only three steps. Essentially it involves finding people with cash flow notes that would rather have all the money now and hooking them up with investors willing to purchase the note. By offering this brokerage service, you earn a commission.

  1. Find the notes – Cash flow notes are made out to be numerous and easily attainable. Most people with rather have cash, not an agreement that entitles them to payments over time. You offer a way to take it off their hands.
  2. List the notes – Apparently DOZENS of investors (oh, wow) visit the free note network listing service offered by Russ. Of course corporate tycoons are dying to get a hold of everything you list, because you are just so awesome.
  3. Profit! – When the deal is closed and the investor takes ownership of the note, you claim commission as a broker (aka middle-man).

Now let’s look at the juicy stuff: an analysis of how the process really works without the fluff.

When a bank issues a loan, a note is held that entitles the bank to repossess the property should they fail to pay back the loan on a monthly basis. A common method for the bank to get the money faster is to sell the note to an investor at a discount.

The bank clearly doesn’t want anything to do with followers of Dalbey’s system or small-time brokers so the course teaches you how to seek out sellers that play the role of the bank. The contract between the seller and buyer is an agreement outlining how the buyer will pay into the house monthly until the debt is paid off, giving the buyer full ownership of the house.

Most sellers that have set up a deal like this are unaware that they can potentially “cash out” by offering the note to an investor at a discount. That is where you fit in. As the broker you list the note and wait for a potential offer. If you are offered $195k for a note worth $200k, the idea is to offer the owner of the note $192k. This way you have earned $3k for your commission and if accepted, all parties are happy.

Like Anything, It’s Tougher than It Sounds on Paper

Theoretically the cash flow system taught by Dalbey works just fine. The problem with it is that it’s not nearly as easy as it is made out to be. There is no easy way to connect with sellers that hold notes and even if they fancy idea of selling, earning the trust required to pull off the deal requires slick salesmanship that not everyone is gifted with.

Supersize My Scam-fries

Concerns with Russ Dalbey’s Winning in the Cash Flow Business and courses like it are numerous.

  1. Talk is Cheap – The information needed to be a legitimate note broker is available online or at your local library for free. Essentially you are paying for filler text that is merely hype with all-in-one courses like this.
  2. Inflated Expectations – You are promised the world merely to get you hooked and sell an overpriced information product. Don’t buy into “the dream”. People that fall for outlandish claims quickly give up when reality rears its ugly head. Big rewards always require big sacrifices.
  3. Upselling from Hell – Unfortunately the price of the course itself isn’t enough for Dalbey and his minions. If anything it is a gateway into bigger scams. There are reports of people losing up to $5k, hoping to get insider secrets but only getting empty promises.

So You Bought The Course?

Casino’s make an awfully big sum based on a strange counter-intuitive emotion we all sometimes feel. Sometimes when you invest your time and interest into something and fail, it is tempting to pour more resources at the problem, hoping it wasn’t all for nothing.

Unfortunately these infomercial aren’t around for any other reason than to make the people behind it rich, not you. Call it quits and cut your losses.

If you still have a desire to be a note broker, this bad experience may actually lead you to bigger and better things. Get yourself some legitimate books about finance; learn as much as you can. Once you have to confidence and know-how to move forward, get ready to work really hard. Who knows, you might even like it.

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      Ali 6 years ago

      thanks for the information i would have lost 3k to 5k to this note deal coachings

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      John 6 years ago

      Wow, very, very nice well written article here. I see this guy's infomercial almost daily and even though I knew little about the subject matter (until I read your article), the poor, fake acting and too-good-to-be-true advertising made it quite obvious it was a scam. It's a shame so many fall for this.

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      Maureen 6 years ago

      Thanks for the information. I am still within 60 days of ordering his materials and plan to take advantage of the 60 day return policy. I find it rather time consuming to rummage through the county websites. In fact, after researching for 4 hours I came up with roughly 10 leads. Yesterday one of his salesmen contacted me convincing me to upgrade. I advised him that I will not be pressured into upgrading and said an abrupt goodbye.

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      Doh! 6 years ago

      Anyone that goes to the seminar and doesn't see that the whole thing is a scam and that there are shills in the audience deserves to lose their sign up money. If it sounds too good to be true, it is.

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      Judy Bodey 6 years ago

      After receiving the instuctional books, Cd's and DVDs I called one of the several phone numbers for getting started. After a great speech about how helpful this program would be for me personally, my husband rejected the idea of me spending $5,000 for an educational program, wanting me instead to make a few deals first and THEN invest in the program. The person I was speaking with told me I had wasted an hour of his time. I'm so very sorry but my time too is valuable. I did appreciate the time the agent spoke with me but isn't it smart to discover more about the program before letting lose with five grand?

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