Do we need such type of fraudulent companies?

India is a great nation and the largest democracy in the world. We have great entrepreneurs and good businessmen with ethics. We don't need this type of fraudulent companies which have been sucking the blood of common people.

While companies have been lining their pockets with ill-gotten money, the common people who lost money to these fraudsters have no idea where their money is gone. They think it is their fate that they lost their money. They never suspect that the schemes introduced by these companies are deceptive. That is the tragedy.

Firms like GoldQuest, V-Can Network, Apple FMCG, ebiz.com and others were already exposed and shut shop. The companies like Amway, Herbalife, Forever Living Products are still continuing the business though the courts held that their business is against the law of the land.

How these companies are managing to continue is a million dollar question.

These fraudulent companies convince people that their business is a legal one and the people could become millionaires once they join the scheme. People fall for their smooth talk and believe them. Even if they lose in the transaction they only blame themselves.

The tactic employed by these companies is ingenious. They ask their members to identify their relatives, friends and even family members to make members of the scheme. These people never file a criminal case against their own relatives and friends. That is how these companies are escaping from the clutches of the law.

But the tragedy is people who lose in this so-called business venture, never trust their relatives and friends in future. That is how the social fabric of the society is affected.

Let us throw these fraudulent companies out of country.

Let us not fall prey to these greedy monsters like Amway, Herbalife

These greedy monsters have been inducing people all over the world in so many countries with easy/quick money. They tell you if you work hard for two to five years, you can comfortably retire and earn money through out your life.

Let us look how these fraudulent companies have been flouting all the laws of the land in India. The first and foremost is they are indulging in money circulation schemes with the inducement of easy/quick money which are expressly prohibited under the provisions of Prize Chits & Money Circulation Schemes (Banning) Act, 1978. All these companies lie about the veracity of their products. First they say it is food supplement and they say that it cures all diseases. They do not give you time to think how merely taking food supplements cures all diseases.

Next, no product should be overpriced. The analysis done on Amway products by Andhra Pradesh State Food Laboratories clearly established that Amway products are overpriced, misbranded and even adulterated. The report copies are with Corporate Frauds Watch.

Once it is agreed these companies are indulging in all types of malpractices, one may wonder what is preventing the authorities from throwing these fraudsters out of the country.

Pricing of products is the secret behind money circulation scheme

All money circulation schemes banned under the Prize Chits & Money Circulation Schemes (Banning) Act, 1978 mainly depend upon over pricing of products or services. Earlier, there used to be open money circulation schemes where the new members have to pay a certain amount of money and that would be shared by members from top to bottom. People who joined late lose their money as it would become impossible to find members to join the scheme. That is what called 'mathematical impossibility'.

The Amway invented the new way of robbing people's money by overpricing products and a Rs. 16 toothpaste is sold for Rs. 120 which is shared by the upline members. However, a sizable part of it goes to the company. That is how the company is lining its pockets making people paupers.

Now every tom, dick and harry entered the scene with the false promises of making members millionaires in a short span by selling overpriced products. Herbalife does the same. Forever Living Products does the same. A Rs. 100 worth aloe vera product is sold for Rs. 975 and the members would be given a discount of 25 per cent to 43 per cent depending upon the product. The Company and the top level members would share the booty. People who lose money in the transaction never suspect that the company's scheme is inherently deceptive and moreover, they blame themselves for not working hard to find new members. That is how their mind is tuned not to question the scheme of the company.

I would like to take this issue to its logical conclusion by making people aware of the deceptive practices and set the law into motion to arrest these tendencies.

Anyway let us start with bringing awareness among people about the fraudulent activities of these companies.

Let us explore more on this front later.

Let us look at Forever Living racket a la Amway style

A number of fraudulent companies are following in the footsteps of Amway. Herbalife, Tianshi, Forever Living and a plethora of companies have already made inroads into the Indian market with their dubious marketing techniques. In fact, all these companies are indulging in illegal money circulation schemes unjustly enriching themselves. The modus operandi is basically same for all these companies with slight modifications.

While Herbalife and a number of Indian companies are also indulging in membership fee and renewal fee, some companies are cleverly avoiding the subscription fee.

Recently, I have attended the so-called promotion meeting of Forever Living duly advertised in newspapers. First, the speaker elaborated the qualities of Forever Living products which are actually aloe vera products. He stated that these products are only food supplements. But soon he gave a different colour to the products describing that they could cure any type of diseases including cancer. He showed in a documentary that several people got rid of their ailments after using the aloe vera products. A number of people said that they have been using the products and are all satisfied with the 'results'.

Now comes the second part, anybody could become a member by paying Rs. 10 and they would be given a unique code number. They purchase products and sell them to their friends and relatives. They could get a discount ranging from 25 per cent to 43 per cent depending upon the product. Up to here there is hardly any problem. If the member could bring in more members they would be given additional percentage of discount. They would be given promotions as assistant supervisor, supervisor, manager, regional manager.

The catch point here is, the more number of members join under you and they do more business, you get more points and earn more commission. The audience are shown that several people up to the level of regional manager have received ranging from Rs. 3 lakh to Rs. 80 lakh.

The point is from where do they get such large amounts.

Here is the secret. All these products are overpriced to the point of several hundreds of times. One may argue that the product price cannot be questioned. But that is exactly the point.

The Amway products tested by Andhra Pradesh State Food Laboratory are branded as overpriced in the testing report.

A hundred rupees worth product is priced at Rs. 1,000 and this excess amount is shared by the upline members. The end-consumer is left with high priced product with the lure that it is good for his health. Merely by consuming food supplements, how could any ailment is cured is the million dollar question. The real motive is money circulation.

The company cleverly argues that there is no subscription fee nor renewal of membership and there is no compulsion to join more members. But the catch point is if you do not enroll more members you will never earn more commission. But where do you find so many members to continue the enrollment. This again what is called 'mathematical impossibility' as described by the Supreme Court of India in a similar case.

Funny apologists of Amway

It is really fun to hear from Amway apologists. One fellow says that what Amway is doing is wonderful and perfectly alright. Another funny fellow says to visit his blog for remedies for all illnesses of Amway victims. Sitting in some undisclosed country, they decide that what Amway India doing in India is correct. Generally, I ignore this type of punks. That is what exactly I am doing now also.

Prize Chits & Money Circulation Schemes (Banning) Act, 1978 is a powerful Act which gives police enormous powers and is a nightmare for people indulging in illegal activities. If anybody wants to know about what are those illegal activities he can go to older posts in this blog to learn about the Act and how it works.

Amway India Enterprises could do nothing when they were booked under the Act but appealed to the Andhra Pradesh High Court to declare its scheming model is legal. However, the High Court after carefully going through the affidavit filed by Amway India itself, declared that its scheme attracts the provisions of the Act and asked the police to complete the investigation. Now the case in the trial court. The managing director of Amway India William Pinckney is attending the trial regularly. The outcome of the trial would decide the fate of Amway India on the Indian soil.

The Amway India would not be allowed to siphon out money from India and at the same it would not be allowed to destroy Indian families.

An example of how Amway is ruining families

This is the letter I received from a school teacher explaining her plight.

I, THANNEERU NIRMALA DEVI, am a resident of Jahangir Colony, Chinthalakunta Checkpost, L.B.Nagar, Hyderabad. I am working as a Government school teacher at Gundrampally near Chittyal mandal, Nalgonda district. My marriage was held with one MADHU YUGANDHAR s/o Sri Rammurthy in 1990. During our wedlock, we were blessed with two children. Initially my husband was working as a Veterinary Assistant in Venkiryal. We were happy with our profession and income to lead our income. Six years ago one of friends of my husband Aila Saidachary resident of Shiva Sai Apartment near NTR vegetable market,L.B.Nagar and began to explain us by saying that he has a good business opportunity there by you can become rich within a short span. Your Government employment is nothing before this business opportunity. Initially my husband rejected this proposal. Thereafter Saidachary used to visit our house situated in L.B.Nagar along with some persons by introducing them as is upline members Shyam Sundar Reddy and Sujatha, Prasad and Ramasita (phone no.9392456379, 9963777990) Saidachary with the help of his upline members explained to us about the scheme as follows.
They are the members of Amway India Enterprises, which is an American Company. It gives huge commissions based on the enrollment of members in their scheme. Initially Rs/-4500 have to be paid to become member of Amway after being enrolled by already enrolled persons as their downline members.
The scheme Amway is 6-4-3 principle means its persons as to six persons and it turns these six persons have to be enrolled four persons. Each totally 24 persons and again these 24 persons have to enroll 3 persons each totally of 103 (1+6+24+72) is called as one leg.
Amway is promising to give each Rs/-56,925 per month if any person make sure 102 persons under his downline either by own efforts of his downline members. The commission will depend on the enrollment of members ranging from 6% to 21% depending upon the enrollment capacity titles will be awarded by the Amway it was said that they are 23 levels/titles in the Amway business depending on the enrollment.
Thereafter Saidachary brought some persons by name D.V.S. DEEPAK, PRASAD and RAMASITA, SHYAMSUNDAR REDDY and SUJATHA to our house situated at L.B.Nagar and again explained the same scheme and showed album of photos citing the names of some persons said to be millionaires after they got enrolled into Amway business. When we showed disinterest they asked me and my husband to attend the seminar to be convened by their Diamond members RAJA NAREN, ASHOK REDDY, GULATI, Vara Prasad (Visakhapatnam) at Gachibowli Stadium. Subsequently unable to bear the pressure from the members of Amway, we attended the above meeting in the Gachibowli. After meeting the said Saidachari made me and my husband to meet the above four diamond members of Amway and they prospected us to join into Amway business and told that you too can get rich soon by Amway Business and pressurized my husband to enroll into the scheme by paying Rs.4,500/- as joining fee. Thereafter they insisted my husband to add my name into the application, as this is a family business. I refused to add my name, as I am a Government employee and should not participate in any private business. Thereafter they convinced my husband by saying that there is no need of physical participation of your wife in this business.
After enroll of my husband in Amway business, they asked him to enroll his clients in Amway Business. Initially my husband did not ask me to accompany him to prospect the new members for enrolment of new members. Subsequently, instead of profits, my husband got losses and made huge debts. As a result of this I have to repay the debts incurred by him. Slowly my husband absented and stopped attending the Government job to follow up Amway Business. He used to sell our household articles for Amway Business. He also mortgaged my house for Amway business. Due to fear of bad name and decency, I put up with my husband. Since one year back, the said Saidachary, Prasad, Deepak, Shyamsundar Reddy came to our house and brought pressure over my husband saying that his wife is a Govt. teacher and she has so many contacts and good reputation as this is a family business. Wife must be involved in Amway business. They also tried to convince me to do Amway Business. I rejected their proposals since being a Government teacher. I should not indulge in such activities. Since then my husband changed his attitude and began to threaten that he would discard me if I don’t do Amway business. I strongly objected to this proposal. Even though, he brought some of the members of Amway and pressurized me to do Amway Business.
Adding to this, when I rejected to do Amway business, the said upline members of Amway, brought some of the members of Britt World Wide to our house. These members of BWW began to explain how to build positive attitude and build enrolment chain in Amway business. The work of BWW is nothing but brain washing the members who refused and intended to do Amway business. They appeared more dangerous than Amway business.
While so, in February 2009, I read a news items in newspapers that the scheme of Amway is an illegal Money Circulation Scheme and participation in such schemes is also an offence. Thereafter I informed the same to my husband his friends that Amway is illegal and promoting illegal scheme.
In the last month, the said Saida Chari along with my husband and some members of Amway by name Shyama Sundar Reddy, Prasad, Deepak came to my house on 20.2.2009 situated at Chinthala Kunta Check Post, L.B.Nagar and pressurized me to do Amway business as my husband is in troubles. If I involve in the Amway business, he may get out of the troubles easily. I strongly rejected to this proposals and warnings. Thereafter they warned me that my husband would discard me if I failed to concede to do Amway Business. Since then my husband has not been coming to our house. Thereafter I informed the same to my brothers. And in turn they arranged a meeting with my husband and his upline members to subside matter. My husband and his upline members vehemently told that my husband would return home only, if I do Amway business. Since then, my husband is not coming to home. Kindly do something and save our marriage.

The thief should be penalised and Amway is the theif

A thief may use any number of tools but the judiciary convicts only the thief not the tools. Let us move ahead irrespective of the tools used by the Amway like subscription fee, annual subscription renewal fee, compulsory monthly purchase of products to make eligible for drawing commissions and so on and so forth. The main intention of these tools is to line Amway's pocket with easy/quick money and that is what pointed out by the Andhra Pradesh High Court.

Let us move forward with the observations of the Andhra Pradesh High Court. The judgment stated that the Amway's counsel contended even assuming that the police are satisfied that the petitioners are indulging in money circulation scheme, they cannot highhandedly interfere with the business of the petitioners till the criminal court, after a full fledged trial, holds the petitioners guilty of the offence alleged against them. After carefully considering this submission, the judgment pointed out that "We have carefully considered this submission of the learned counsel. It is a well settled principle of criminal jurisprudence that no person shall be presumed to be guilty until his guilty is proved, but we are unable to accept the broad submissions of the learned counsel for the Amway that till the conclusion of the criminal case the police have no power to interfere with the business activities of the Amway. Section 7 of the Prize Chits & Money Circulation Schemes (Banning) Act empowers the police officer to enter, search and seize any premises if he has reason to suspect any prize chits or money circulation scheme is going on."

It shows that the police have powers even now to stop the business activities of the Amway as it is continuing the same offence again and again with impunity. That is the tragedy.

Let's learn more about Amway scam

Let us move forward as our friend could not answer to the inducement point. Now let us see how Amway hoodwinked the Indian Government.

The Andhra Pradesh High Court has also pointed out that Mr A Rajasekhar Reddy, learned Assistant Solicitor General appearing for the Union of India submitted that the scheme approved by the Government of India is different from the scheme which the first petitioner, i.e. Amway, is executing and, therefore, the approval given by the Government of India cannot be used as a shield by the petitioners for carrying unlawful business. He referred to the letters dated 31.3.2003 and 23.9.2003 addressed by the Secretary, Government of India, Ministry of Consumer Affairs and submitted that though in the first letter a reference was made to the judgment in Swapankumar Guha case, and the secretary opined that the companies dealing with direct/ network/ middlemen marketing do not fall within the provisions of the Prize Chits & Money Circulation Schemes (Banning) Act, 1978, later on, he clarified that the unlawful activities are prohibited in the Act.

The Assistant Solicitor General submitted that as per letter dated 29.3.2003, the pyramid structured marketing schemes fall within the provisions of the Act and the people running those schemes cannot claim the benefit of the approvals granted by the Government of India.

The learned counsel further argued that having regard to the serious allegations which prima facie show that the petitioners are involved in money circulation prohibited by the Act, they cannot seek, to interdict the investigation by the police and that the truth or otherwise of the allegations ;made in the criminal case should be allowed to be revealed and this court cannot issue writ to stultify the investigation.

Now, the Amway apologists understand the dubious claims of the Amway that its business is legal under Indian laws.

What happened to my Amway friend

What is wrong with you. Why don't you make some stupid comment. It seems my Amway friend is dumbfound He is caught off-guard and must be faltering to reach the computer.

Now, it seems, he realised what inducement is and how Amway is inducing/luring its distributors to bring in more persons into its fold and how it is lining its pocket with easy/quick money.

Easy/quick money Amway India style

The Andhra Pradesh High Court further points out how the easy/quick money is made by Amway India Enterprises.

Under the head easy/quick money and it being dependent on enrollment of members the judgment says the following points.

a) A substantial sum of Rs. 1800 out of Rs. 4400 is credited direct to the account of Amway. It is stated on behalf of the company in the Writ Petition that it enrolled 4,50,000 distributors all over India. Taking this as correct, a sum of Rs. 81 crore is appropriated by the company at the time of enrollment of the members itself.This cannot but be stated 'easy/quick money' got by it from the so called distributors/member de hors any service.

b) The terms and conditions of 'Distribution Renewal form' supplied by Amway shows as Annexure-3 read as follows:

Condition No. 3: "The distributorship agreement if not renewed by Amway shall stand terminated on December 31 or on expiry of one year from the date of distributorship, as the case may be."

Condition No12: "The Renewal of subscription fee including Block Renewal subscription fee is non-refundable."

Condition 14: Renewal of subscription fee is mandatory to continue with business and maintain your position in line of sponsorship."

Thus from 4,50,000 distributors the company would get a sum of Rs. 45 crore (4,50,000x995) per annum on completion of every year which can only be stated to be "easy/quick money" sans any service to the distributors/members.

c) To enable him to get the so called commission @ 3 per cent every month, the IBO has to distribute/purchase/sell products worth Rs. 2,000 of Amway every month or else he will not be eligible to get any commission or continue as member in the scheme. Thus each member is forced/induced/lured to purchase the products worth Rs. 2,000 every month to keep his chance of getting commission alive. Thus, "Amway" would automatically get a business of the quantum of Rs. 1080 crore (4,50,000x2,000x12 months) per annum which would yield an astronomical profit and it cannot but be stated as easy/quick money without any service to the distributors/members irrespective of whether they sell the products or not, though the company may conveniently refer it as 'turnover by sale of products'.

Is this sufficient for Amway apologists to get a slap in the face? Shame on these people to continue in the business. After all, swindlers are never ashamed of their activities. They are 'proud' of swindling.

Let us explore more in the next instalment.

Inducement is a crime and punishable, Amway is doing that exactly

My face is visible on the Blog and it is not a masked one. My life is open and I do not hide behind pseudonym. Come out open. What are you afraid of? Only guilty are afraid.

Let us come to the point. Inducement is a crime and punishable. Amway distributors do that all the time. That is what Andhra Pradesh High Court has pointed out. "It is thus, evident that the whole scheme is so ingeniously conceived that the inducement for aggressive enrollment of new members to earn more and more commission is inherent in the scheme.'' This is the exact wording of the judgment. It also adds, "By holding attractive commission on the business turned out by the downline members, the scheme provides for sufficient inducements for its members to chase for the new members in their hot pursuit to make quick/easy money."

One's vision is blurred under inducement and always think of how to make more money out of others gullibility. That is what Amway distributors think all the time. No matter what the law says and no matter whether the social relations are destroyed. "Treat them as enemies who do not tow your line," screams Amway trainer. That is why they do not mind to desert the spouses if they do not fall in line.

Now Herbalife, Tianshi and a plethora of companies are doing the same trick like Amway. These fraudulent companies are offering easy/quick health alongwith easy/quick riches. A number of Indian conmen have already joined the bandwagon to loot the gullible.

Why Amway? Because it is the mother of all scams. Even samll traders are following in its footsteps as I mentioned in an earlier piece.

Let us explore more in the coming articles.

You don't need a statistician to prove Amway scam

Amway apologists conveniently forget what prompted the judge to say 'if the allegations are true'. Because the case is not filed by the police. It is the Amway itself submitted the writ petition to get a clean chit from the High Court. The Amway apologists also conveniently conceal what the other Judge Justice Nagarjuna Reddy said about the Amway scheme. That is why the High Court ordered full investigation into the case and file the chargesheet.

Kindly get the copy of the chargesheet to find the prima facie in the case my friend. Because of the delay in the court proceedings, the Amway is able to continue the business.

Anyway, here is one more logical question. When a criminal case is pending against a person, can the same person commit the same offence again because the criminal case is not settled. This question is for the jurisprudence to ponder over.

Regarding the subscriptions, the apologists claim that it is a tiny amount. But Amway India Enterprises has mopped up Rs. 81 crore by 2006 as subscription fee alone according to the affidavit filed by Amway in the Andhra Pradesh High Court. That is why it is called easy and quick money for the Amway and its top level persons. They try to hoodwink people by saying that they are extending 'service' to the distributors with the subscription fee. Nothing but self-deception.

Do you know how many Indian are living below the poverty line and how precious is that amount for a sizeable chunk of population. Sitting in air-conditioned rooms in some comfortable non-disclosed country, you judge what you are selling is useful for all Indians.

Many Amway members tried their luck 'with soaps in their hands and hopes in their hearts' after getting induced by the sweet talk of Amway apologists. But they could not convince their brethren to purchase the prohibitively costly nutritional supplements and gave up their subscription money.

I would like to tell something here. There is an order from the Government prohibiting sale of selling vitamins and nutritional supplements in tablet or capsule form. But that is what exactly Amway is doing in India.

Do you need to be a statistician or businessman or communist to establish the Amway scam.

Any person can learn by looking at the blog what I am. Funny apologists. They never reveal who they are and appear in masked faces and they want to know what I am.

Don't mix up regular business with the scam, Amway friend

It seems you are thoroughly enjoying the sparring my friend. Amway is not a regular business or film making or novel writing. If it is regular business it would have sold its products in any shop or big mall. It was an 'ingeniously' conceived trap (this is the word used by our learned Judge of the Andhra Pradesh High Court). You are mixing the regular business with a scandal like Amway. Again you are silent on the membership fee and its annual renewal scam. That is what the High Court judge pointed out. Unjust enrichment. Easy and Quick money for the Amway and its top people.

The Amway members have to purchase at least Rs. 2500 worth products every month to keep them eligible for earning commission. Most of the products are not at all useful for us Indians. And to get rid of them they make rounds to the houses of known persons sometimes giving as gifts. You know that it is a sizable amount for even a middle class family in the country. Still, they invest that amount in the hope that they would become millionaires soon. That is the mirage.

About marital discards, of course, they are common. But the discard is due to the difference of opinion on Amway business. That is the crux of the point. If it is one family we can understand. If there are dozens of families, we have to probe the reason. I have not even wildest imagination that Amway cult people could be convinced with argument or reason. My point is to warn my fellow Indians from falling prey to the predators like Amway, Herbalife and plethora of Indian con men who are following in the footsteps of Amway. One Japan Life racket was smashed and GoldQuest International was closed. But they all already destroyed the economy and social relations.

For the sake of information, a rice trader in a small town in Andhra Pradesh is indulging in the same modus operandi. He is selling 50 kg rice for Rs. 1500 when the actual price is only Rs. 800. He is inducing the public to bring in more people to buy the rice at that price with the offer of commission. A case was booked against him under the money circulation schemes banning act and was put behind the bars. This is only an example. It should happen to the big corporates also.

Regarding the question of my credentials, you know well and still asking.

That is exactly the point Amway friend, profiteering without personal effort

Now you come to the point my friend. It is nothing but profiteering without personal effort. You quit business ten years ago and still you make money when somebody is toiling for you. This is nothing but unjust enrichment pointed out again by the Andhra Pradesh High Court.

Just merely brushing aside it all as rubbish, facts cannot be swept under the carpet, my friend. The inducement is very attractive and the commission is very high. Everybody tries to rope in more people. And where do they find more people?

They do not hesitate to bring in their friends, relatives, kith and kin. And Amway in one of their business training sessions brainwashes them to treat anyone who does not tow your line as an enemy. That is how the social fabric of the society is being destroyed in India. And it is being done systematically. Unless it is stopped immediately, everyone becomes other's enemy. And the society ends up in chaos.

This is the best advice I got from Amway friend. 'Follow the money'. There is nothing but money and profits. No social relations, love and affection.

Amway keeps on changing its strategies like reduction in product prices by 350%. How ridiculous reduction. What is the original price. The ex-factory price of Glister toothpaste is Rs. 16 and Amway sells it for Rs. 120. If it is direct selling the consumer must get it for Rs. 20 if not for Rs. 16. What is the benefit the consumer is getting? Except toiling for someone at the top of the vortex. My friend conveniently skips the unjust enrichment of Amway by way of subscriptions and their renewals every year which is pointed out by the Andhra Pradesh High Court.

Please read one of the earlier pieces to recall how a housewife is deserted by her husband when she refused to sell the products. That housewife, a mother of two, is trying her best to win back her husband by counseling. The husband is refusing to return home unless she accepts to continue the sales. And he also insists that they are going to become millionaires soon. She says it is humiliating when their friends close doors on her face when she takes Amway products to their homes. This is the pathetic scene and reality my friend. There are at least 50 housewives like Nirmala. More about them soon.

It is impossible to wake up a pretending person

If one person wishes to become a 'wholesaler' he has to look for 100 downline members under him. Here is the hiccup. Where do you find 100 downline members? That it is why it is called endless chain and a mathematical impossibility.

If Amway products are of that great quality and could be sold at any price they wish, they could do the same in a regular business model. But the Company cannot fleece public in the name of membership fee and annual renewal fee which is nothing but unjust enrichment. This is what Andhra Pradesh High Court has pointed out in its judgement.

People in the upline always line their pockets showing a mirage to the downliners that they too can become like them in near future. This is the Amway scam.

One can be woken up if one is really sleeping. You cannot wake up a person who is pretending.

The excuse of new market, untested local manufacturer and so forth arguments hold no water. That is why they are no longer discussed.

Read the latest news in the Times about the state of Amway in UK and still pretend that everything is fine.

Team Life Care Insurance facing a criminal case

Team Life Care Insurance is a corporate agent of Bajaj Allianz Life Insurance Ltd. As a corporate agent it should train insurance selling agents to sell the insurnace policies. But it indugles in multilevel marketing scam. One has to delve deep into the activities of this type of fraudulent companies to find their real face.

One of the readers asked whether Team Life Care business is legal. It sure is illegal. A criminal case was filed against that firm along with Bajaj Allianz Life Insurance Ltd for indulging in money circulation schemes in the guise of selling insurance polices. Instead of letting the police investigate and find its innocence, both the companies moved the High Court of Andhra Pradesh and got interim stay orders over the investigation.

The modus operandi is simple. They approach a person to buy an insurance policy and ask him to rope in more members to earn good commission. If he could rope in six more members he is assured of a sizable income. And if he could bring in more members he is offered a trip to Andaman Islands and luxury cars and so many rewards. Again it is chain marketing and they call it referral marketing. The question again is how could anyone find so many people on earth to sell policies.

Now where does the money come from? The insurance policy is a unit-linked policy. That means the company would invest the money in the stock market and distribute the dividends to the insured persons. Now how much amount is deducted from the first year policy? They are deducting a whopping 70 per cent from the first year policy amount without informing the insured and moreover induce him that he could earn milliions if he brings in more people. What is the justification of deducting 70 per cent? How the insured person is going to get back his amount from the mere 30 per cent investment in the stock market. Now the stock market collapsed its value is peanuts. So the insured lost all his money. These companies must reveal who is sharing the 70 per cent of the first year policy amount.

This is how the multilevel marketing companies are hoodwinking people and making themselves rich over night. In all these activities the main beneficiary is the company.

People should realise that it is a scam and not fall prey to these frauds.

Funny apologists of Amway

What kind of funny apologists Amway cult people are could be understood by the way my learned friend reacted to the continuous enrollment. According to him, a wholesaler recruits six regional distributors who in turn recruits each four salesmen and who in turn recruit each three customers. The customer should remain a customer through out his life buying Amway products spending a huge chunk of his earnings. IF he 'wishes' to become 'rich' or 'millionaire' very fast, he has to upgrade himself to upline membership. Otherwise, he would remain a customer through out his life. Now he is lured with false promises of easy and quick rich, he tries to find more people under his downline. The question is where does he find so many people? Here comes 'mathematical impossibility' my friend.

The scheming model is nothing but a trap of inducement with false promises of easy/quick rich. So many families are being destroyed all over India with one of the spouses is dissenting to continue in the scheming model of Amway.

An honest man feels guilty when he is fined by the authorities of some crime. A habitual offender laughs 'hahahaha'. What an apology to claim that was due to the opening to a new market and untested local manufacturer. Let us remind the apologists that Amway has been penalised in 2007 but not several years ago and Amway has been present in India for over decade. It is a not new market.

Whether one lakh rupee fine or a hundred rupee fine, one has to look into why the company was penalised in the first place. The Amway products were found to be adulterated, misbranded, overpriced during the trial of the consumer court. The findings were established by the Andhra Pradesh State Food Laboratories. That is the 'quality' of Amway. For our gullible Indian, anything from America is of great quality and they fall for it.

Regarding the Rs. 1100 crore turnover purortedly achieved by Amway may be another lie in the series of lies put forward by Amway. But no one is sure, because Amway never reveals facts. So are its distributors who exaggerate their earnings to lure into the trap more people.

The delay in writing this response is due to the attendance to a workshop at Bangalore.

Beating around the bush my friend does serve no purpose

This is what is called beating around the bush my friend. Instead of directly answering my question whether IBOs have to continuously search for new victims, my friend talks of anything but truth. If anybody continuously has to enroll new members where do they find. That is what is called endless chain. My friend must be in top of the pyramid making a lot of dough. That is why he is irked by the reasonable and rational questions.

6-4-3 is the Amway scheme and the so-called IBOs have to bring pressure on their friends and relatives to join the scheme. Just convincing yourself that it is a great scheme won't help any longer. Come on friend. Why do you worry. Do you feel threatened of losing earnings? In India, the lid is open and people realised it is worthless to run after the mirage of becoming rich through Amway. Your IBOs have tough time convincing people about the dubious quality and direct selling scam. A consumer forum has fined Rs. 1 lakh on Amway on the quality front. lol.

I know you will never concede that it is a scam because you are the beneficiary of it. No thief every agrees that he is doing a wrong thing. The easiest thing in the world to convince that you are right.

I could not conceal my laugh when I read your meek responses. lol my friend.

Amway is an endless chain my friend

Looking through Amway eyes one may imagine that Amway is not an endless chain. But reality is entirely different. Every IBO is encouraged to enroll more members under him under the notorious 6-4-3 plan of Amway. That means every IBO should enroll six persons who in turn have to enroll four more each and they in turn have to enroll three more each to complete one leg. This is what exactly the Amway has submitted to the Andhra Pradesh High Court in its affidavit. And mind it, all these 101 people are IBOs and they are also supposed to enroll more IBOs to get more commission. That is the inducement. Now tell me how it is endless chain my friend. And where do they find so many people on earth.

One thing is sure. The IBOs tend to look at everything with Amway eyes and say everything is great and normal.

It is very difficult for some to accept an expert as an expert.

These people conveniently keep silence when a pertinent question is asked and it is easy to say that it is all rubbish instead of coming to the point, my friend. What I wonder is why Amway has changed its name as Quixtar in the US?

Honourable people really worry when they face even a single criminal case. For the habitual offenders not even three are sufficient. That is their problem. Hope people understand it.

Let us be truthful and answer a straight question. How many of the 1.5 million Amway distributors in India are actually active? After losing their initial investment of Rs. 4400 they would be staying home licking the wounds.

People should realise the Mathematical impossibility of Amway scheme

It is the 'mathematical impossibility' that the Supreme Court of India recently commented upon while delivering a judgement in a similar case that of Amway. In the historical judgement, the Supreme Court stressed that it is outright cheating people in the name of pyramidical structure business and naturally attracts the provisions of Section 420 of the Indian Penal Code. The Supreme Court pointed out that the organisers of such schemes know well that it is not going to work forever and they also know that the chain is going break soon. Still, they induce the gullible to join the scheme with the promise of easy and quick rich.

The judgement was delivered on September 15, 2008 in a writ petition from the State of Kerala in India.

Referring to the mathematical impossibility, the Supreme Court of India pointed out that joining people in the chain schemes is cheating because the chain is going to break soon and the organisers of such schemes know it well. In the Amway scheme too people have to join 101 people in one leg to complete one chain and at the 13th level the whole population would exhaust and where would they go to recruit more people in the chain.

It is high time, people realised the pitfalls of such schemes and whenever they feel they are cheated they should immediately lodge a complaint with the police. Now if it is Andhra Pradesh it is to file a criminal case against such companies since the DGP issued instructions to all police stations to that effect. If anybody faces problems, they can contact Corporate Frauds Watch for help. They need not worry of filing criminal cases against their friends and relatives who got them joined in the scheme. They could directly face criminal cases against the companies for inducing them with false promises.

Corporate Frauds Watch celebrates first anniversary

It has been since one year the Corporate Frauds Watch started functioning and it has many feathers in its cap to boast of. It has thoroughly exposed the fraudulent activities of dubious companies like Amway, Herbalife, GoldQuest International and some others.

In fact, it is the Corporate Frauds Watch which filed a criminal complaint against GoldQuest International in the State of Andhra Pradesh, India. The disgraced managing director of GoldQuest International Ms Pushpam Appala Naidu was brought to book and put behind bars for cheating several thousands of the gullible all over the country. Bank accounts with several billions of rupees have been frozen. The case is pending in the criminal court and police are preparing chargesheet against the company and its directors and independent representatives.

Days would come soon the independent business owners of Amway would face the same consequences.

The Corporate Frauds Watch has brought pressure on the Andhra Pradesh State Government to issue orders restraining Amway from publishing advertisements in the media. It is a great achievement and people realised dubious activities of Amway.

Then Corporate Frauds Watch prevailed upon the Director General of Police to issue memorandum to the police officers all over the State of Andhra Pradesh to book criminal cases whenever the victims filed cases against companies like Amway which indulged in money circulation schemes in the guise of product sales and services. That is also no less achievement. Now after the memorandum was issued as many as three criminal cases were filed against Amway alone all over Andhra Pradesh. Now the independent business owners of Amway are a worried lot fearing that they might have to face criminal cases soon.

The Corporate Frauds Watch has exposed the money circulation scheme of the biggest private insurance firm Bajaj Allianz and its corporate agent Team Life Care Insurance Ltd by filing a criminal case against it. The companies have secured an interim stay order from the Andhra Pradesh High Court and the Corporate Frauds Watch is representing its client in the High Court.

In spite of the shortage of funds and manpower, the Corporate Frauds Watch has been doing so much work and we are proud of it.

Now we are happy to announce that the Corporate Frauds Watch blog has attracted attention of many all over the world and we assure our admirers that we continue to fight this evil till it is thrown out of country. GoldQuest International has received a death blow and now it is the turn of Amway and Herbalife.

1.5 million Amway distributors doing unauthorised business

Amway claims that it has 1.5 million distributors all over India. However, it never reveals the fact that these distributors have no sales tax registration and they never pay any tax to the Government on the goods they purportedly force rather than sell to the gullible. My learned friend should know that these are not valid sale transactions as they are illegal. In a purchase the consumer should get a receipt in his name for the goods he purchased. Not a single distributor gives receipt and in fact does not 'sell' these products. They only try to force their friends and relatives to take them. And after sometime they face humiliations from their friends and relatives. Still, they are not ashamed of their act. They are trained not to be ashamed of their deeds and moreover they were told to treat their friends or relatives as their enemies if they do not fall in line.

What these distributors do not realise that they are helping a fraudulent company to take away sizeable amount of their earnings. For the ex-factory price of Rs. 16, the Amway distributors are selling Glister toothpaste for Rs. 120. How much amount of that Rs. 120 is pocketed by Amway and how much is going to the downline members? If this question is answered everything will be clear.

More later.

In India one cannot purchase Amway products directly

I am glad my friend responded to allow me to put forward the point. I do not know from which country my 'learned' friend is responding, in India, no one can purchase Amway products without becoming a member and it is a fact. I have personally gone to the distributor point and they refused to sell me the products. They directed me to go to one of the IBOs who harassed me to become a member first so that I can earn a lot of money. Moreover, the IBOs do not give any receipt for the products purchased. What kind of business model is this my friend? One can shut one's eyes and pretend that everything is normal. But the reality is otherwise.

My friend does not answer to the earlier queries about how the Amway is cheating the Government by not paying taxes and illegally sharing the booty. For instance, the Amway is paying the tax to the government on the ex-factory price of Rs. 16 with regard to Glister toothpaste but selling it to people for Rs. 120. Who is sharing the Rs. 104 and what tax they are paying on this amount. This is only an example. There are products of high value and several lakhs of rupees of tax is evaded. Is this the great business model my friend?

In respect to the business model of Amway, my dear friend, the Andhra Pradesh High Court described this business model as illegal and the Supreme Court of India also confirmed it. Criminal cases are pending against this fraudulent company. Still, the company and self-centred IBOs think of lining their pockets without considering the large number of fellow citizens.

Three cheers my friend stop cheating your fellow human beings.

More later about the unethical practices of IBOs and the Amway.

Unjust enrichment model of Amway

Unjust enrichment is one thing no civilised society allows anywhere in the world. That is exactly the area of operation the Amway India Enterprises has undertaken. The modus operandi is simple. Charge the customers for not services they are offered and, lo behold! you are out to make several millions in a jiffy.

If anybody wants to purchase any goods, what is the necessity of becoming a member of that company? But Amway demands membership fee to purchase its products.

The Amway claims that it has 15 lakh members all over the country. It has already collected Rs. 1800 as membership fee from each member. That means 1.5 million X Rs. 1800 = 2.7 billion rupees is the amount the Amway has pocketed since it launched its operations in India. If this is not unjust enrichment, what else is?

Not only the monetary loss people are suffering. Families are collapsing and social relations are destroying due to the strategy of Amway. The Amway brainwashes its members to treat anybody who does not join the scheme as enemy. So a man treats his wife as an enemy if she does not agree to be in Amway business. This is the dangerous part of its operations and that is why Amway should close its operations forever.

So is the case with Herbalife and V-Can Network, ebiz.com, Apple FMCG, RCM and so many other fraudulent companies. It is high time people realised the evil designs of these companies and come out of the dangerous web.