Published on May 26, 2023
Former sales employees of InMode (INMD), a manufacturer of medical aesthetic devices, tell The Capitol Forum that the company had a “hand in glove” relationship with Financial Partners Group (FPG), a broker that arranged financing for purchases of InMode devices by clinics and med spas. While The Capitol Forum has previously reported on the relationship between FPG and InMode, the extent of that relationship has not been previously reported.
According to one former sales employee who recently left InMode after several years, roughly half of their sales were funneled through FPG brokered financing using high-pressure sales tactics that locked customers into high-interest loans, which could have annual percentage rates between 12% and 20%.
“It was very hand in glove between InMode and FPG,” the former sales representative said, “we weren’t allowed to use anyone else and were told it was because Shakil [Lakhani, InMode’s North America President] had a good relationship with FPG.”
According to the source, FPG would pay InMode sales representatives a commission for every sale they managed to finance through the company, and they understood that higher-up executives at InMode also received some share of the commission.
“It was very much like a pyramid scheme,” the former sales representative opined, “the people higher up get a cut of the commission of the people under them. If I sold a device, I got 1% of the sale price direct deposit in my account from FPG a week later and they would send us a 1099 at the end of the year.”
A second former sales representative confirmed that they also received a 1099 from FPG and also likened the commission structure to that of a pyramid scheme.
“Points from the two companies [InMode and FPG] trickled upwards,” the former sales representative said, adding that he believed “that the regional sales directors and vice presidents could be getting 2-5 points on each deal.”
“At least nine percent of the overall interest rate had to be built in for commissions to InMode and FPG,” a former sales manager estimated, “the area manager got a piece, regional manager got a piece, district manager got a piece, all the way up.”
Outside of the financial relationship between the two companies, the former sales representatives detailed social relationships between FPG and InMode employees.
“FPG would come to our sales conferences and tell us how great the relationship was going. These conferences were in places like Cabo, so afterwards we’d go out to dinner with them, and later, some would go to the clubs and strip clubs together” the former sales manager said, adding that “at least once a year FPG did some big social thing for us, box seats at a sports game or a concert, something like that. Around Christmas, some of my managers also got luxury sneakers and expensive bottles of wine from their FPG partners.”
The former sales representatives explained that FPG depended on InMode selling to clinics and med spas that would agree to purchase devices without giving the terms of the deal much thought. If a potential customer began asking questions about the loan, it could affect the commission the sales representative received.
“Doctors really aren’t the best business people. But if a customer is savvy and they ask for an amortization schedule and figure out that the loan isn’t 7% but rather 17%, FPG has to cut their BS, actually get competitive, and drop the rates. And then you wouldn’t get any points,” one of the former sales representative explained.
If a customer was delinquent on some of their loans that FPG arranged, the former sales representative said that FPG employees would actually call InMode sales representatives and ask them to lean on the customer to make their monthly payments. The former sales representatives explained that this wasn’t done because FPG actually held the debt, but rather often happened when FPG was working with a new bank.
“It didn’t look good for FPG if they were with a new bank and their first few loans are defaulting,” the former sales manager said.
While it is unclear how much money FPG could make on each InMode transaction, court filings have detailed high commissions that FPG has made when brokering other aesthetic medical devices.
An exhibit in a case brought by the Pawnee Leasing Company regarding a customer defaulting on their loan details a $5,700 payment to FPG on financing deal for a $38,000 device. The broker invoice in that deal was signed by Jeff LaLima, the President of FPG.
FPG and InMode did not respond to a request for comment for this article.
