Intro: Multi-Level Marketing (for brevity MLM) is an innovative con concept which requires a different mindset to understand it. It is like a mirage. It is a swamp with beautiful red carpet. MLM is nothing but Making lots of Money Through Other People’s Efforts and With Other People’s Money. It is a scheme to fall prey to others and in turn cheat others with one’s influence to continue it. In brief MLM is selling products / services through sponsoring / enrolment of members.
What is going on: In the name of multi-level marketing, several companies are selling their dubious products and attracting people with the promise of high returns. The deemed returns are so high that the people cannot resist it. Public easily fall prey to their smooth-talking. What these people do not realise is that these companies are making fast buck with the promise of easy money to the members. Ultimately people are losers and they are used by the companies to line their pockets. On the other hand, these multi-national companies have been siphoning the precious hard-earned money to their countries. The dubious products are sold in the name of good health and even by using name of god.
Impact on Society: The members are induced to recruit more members using their personal influence and social status which in turn has been damaging our well-knitted social and economic fabric. The newly recruited members keep on buying the products and enrolling the new members. Most of the products are high priced, adulterated, misbranded and not authorised.
These MLM companies are targeting the women folk in the name of promoting family business. Women who are vulnerable are falling prey to the lure of getting rich quick and many a time the family relations are getting damaged. Mostly they are targeting middle class and not even sparing the poor people.
Professionals like doctors, bureaucrats and politicians are dragged into the networking to enrol more members from people who listen to them. Hapless people are unduly influenced to join the scheme and if they lose their money they would not be in a position to raise their voice to represent their grievance. This way the companies are forcing the top rung members to exploit their social status. Ultimately this is leading to ruining the social relations. Many a time, public would not like to lodge complaints with the police because if they have to lodge, they have to lodge against their own kith and kin because they have become members into the net through them only.
In the pyramid structure of multi-level marketing, only the top members get enriched at the cost of the several lakhs of members. It is nothing but unjust enrichment of some. The members are compelled to buy a certain amount of articles most of them are not useful for them in day-to-day life. They have no right to choice in respect of the products. At the same time, the products are highly priced compared to the similar products available in the market. It has been proved by the State authorities that some of the products were adulterated, misbranded and useless.
1) Amway, which boasts of presence in 88 countries, has been found guilty by the Apex Court in India under Prize Chits & Money Circulation Schemes (Banning) Act, 1978, (SLP No. 13414, 13415 of 2007).
2) The Krishna district consumer forum held that the dietary supplements/food supplements of Amway are misbranded, adulterated and not at all food.
3) A housewife in Vijayawada was brutally murdered when she tried to enrol a stranger as member. (A case was registered in Patamata police station.)
4) A housewife in Vijayawada fell in a trap of one of the members of another MLM, which resulted in breaking of her wedlock. (A Crime was registered in Governerpet police station.) 5) The marriage of a software engineer was broken when he did not allow his wife to enrol new members to the MLM. (A case registered with CID police station, Hyd)
6) The family of a retired scientist was ruined which resulted in filing a public interest litigation against Amway and the MLM concept. (WP No. 25749 of 2006 of AP High Court) 7) A subordinate officer committed suicide when he could not meet the mandatory purchases from the MLM as per the diktats of his superior officer. (A crime was registered in Nandyala police station.)
These are the few incidents which can be termed as proverbial tip of iceberg. Expectations: MLM is conceptually wrong, legally untenable, practically impossible and morally unethical. We request your good selves to kindly save the mankind from falling prey to these unscrupulous elements. Since you believe in Vasudhaika Kutumbam, it is our duty to enlighten our own people and thus save not only our country but the global village.
TO KNOW MORE ABOUT MLM FRAUDS Please visit http://corporatefraudswatch.blogspot.com/
M V Syam Sundar, Secretary, Corporate FraudsWatch,India
Ch Divakar Babu, Consumer Guidance Society, Vijayawada
M Bhiksham Raju, Secretary, Public Alert Seva Society, Vijayawada
And Also Information From
V C Sajjanar, I.P.S. Commandant, APSP, Mangalagiri, (previously Superintendent of Police, Economic Offences Wing, CID, AP, Hyderabad)firstname.lastname@example.org