Another victim comes out against Amway, says it is poisonous

Here is another victim who came out with own version on Amway's poisonous ways. Understandably the victim refuses to reveal identity. Here is the letter--Shyam.

I read some of your Amway stuff off the Internet and I want to confirm what you describe is a fair picture of how it is. My husband and I had been married for six years. We lived in *************. We joined Amway back in the 1990s when I was sick of my job and my husband had got a £16 grand redundancy check. It seemed simple. We were shown videos by friends of friends. Two Diamonds in England lived in a flash mansion and had amazing cars. We were told that we could just follow the same plan as them and in less than 5 years we too could be living the life we'd always Dreamed of.

We were told to copy our Upline Sponsor and buy the products every month and sponsor everyone we knew to do the same. The Amway stuff was rubbish and way too expensive but the more we spent the more we got back and the more we thought we were going to make. Twelve months later we'd lost £10 000 and the few people we'd managed to sign up had packed in or were heading the same way. Most of our money had not gone on products but on telephone bills travelling, the meetings, books, and tapes.

We once spent nearly a grand to take two Prospects to a Major Function where a top American Diamond was appearing. We did as we were told and ate Amway food, drank Amway drinks, washed our clothes and dishes with Amway soap, brushed our teeth with Amway toothpaste, took Amway vitamins. Amway ruled our lives 24 hours a day. Negative people and Negative products were forbidden. I fell out with my sister when her husband had a fight with my husband and he threw them out of our house. Even our clothes and haircuts were chosen by Upline. When all the money was gone my husband was told by Upline if he wanted to be a Winner to put everything on his charge card. I was first to see that the same people who were behind this madness were the same people who were making a fortune off our backs.

At the Major Functions thousands of Distributors were paying hundreds of pounds each to hear the same lies repeated. It was like going to a big rock concert. Women used to faint and men cried. When I tried to get my husband to stop he went to our Upline for special counseling. They both went crazy. I was told if I continued with negative talk I would be dealt with. They threatened to tell my father about something I'd done years ago when I was 17. That finished it for me.

I left my husband when we were about to lose our home. My sister and brother in law were the first people to give me a hand. No one I knew in Amway would talk to me they'd all been told I was a slut and a liar. I can remember once telling my sister that she was living with a broke, a loser and that one day she would beg me on her knees to join Amway but it would be too late. I got that lie off a training tape.

Amway poisoned my life.

Yours sincerely **********

A crook never changes so is Amway India

It is like thief crying 'thief, thief'. Recently the Economic Times published a statement of the managing director of Amway who wants regulations regarding direct selling in India. He did not clarify what type of regulations he wants. Following is the excerpts:

The Government should learn from the experiences of countries like China and not wait for a catastrophe before bringing in regulations for direct selling in India, industry major Amway said on April 8, 2008 at New Delhi. "We have been asking the government for last nine years to bring in some legislation to protect the interest of industry and consumers... nothing has happened on that front... may be we were not able to market the concept properly," Amway India Managing Director and CEO William Pinckney told PTI. Narrating the experience of his company in China, he said Amway along with all the direct selling players were banned after an outcry among consumers against some fly-by-night firms. Later the government brought in rules which were to be followed by firms if they wanted to operate in China. "Why do we have to wait for any outcry in India for bringing in any legislation," he wondered and said as of now there were about 20,00,000 direct selling agents employed by all the players and presuming each one of them is linked with 10 customers than "we are talking about two crore population" in the country. "It will be in the interest of everybody if the government acted in this direction...There is not a country that I know of where the industry has prospered but doesn't have specific legislation relative to the industry," he said.
Interestingly, Mr Pinckney did not elaborate on 'public outcry'. The public cry against Amway India is already on and the Amway India is facing criminal charges in more than one criminal court in Andhra Pradesh. Now this how the Amway is trying to hoodwink the Government of India too as it has been hoodwinking the people of all over India. The direct selling concept it employs is totally different from what it actually meant. Instead of being exposed to its crooked tactics, it is trying to deviating the attention of the Government from its disguised money circulation scheme. The whole idea behind the Amway business is selling over-priced products and sharing the booty to line its pockets and its members' pockets. It is high time, Amway India Enterprises is thrown out of the country. A crook never changes.

Mannatech to pay millions to victims for false claims of cures and health benefits

Mannatech, a long time MLM company, member of the Direct Selling Association and publicly traded on the New York Stock Exchange, has agreed to pay millions of dollars to consumers who were deceived by its false health claims about its products. The state of Texas, where the scheme is based, charged that Mannatech falsely claimed that its food supplements cured Down syndrome, cystic fibrosis, cancer and other serious diseases.The unholy combination of a snake-oil product with a pyramid income scheme is a defining characteristic of multi-level marketing. The schemes often claim "patented" products made from "secret formulas" that work at the "cellular level" and always, "not a available in stores."

These claims are made for vitamins, herbs, and minerals. In virtually all cases the products are essentially same as products readily available in health food stores or even grocery stores for a fraction of the price. In some cases, the products are lethal, as when MLMs were the largest promoters of weight loss herbs containing ephedrine, now banned by the FDA for causing strokes. The latest craze of miracle health claims is fruit juice, selling for $40 a bottle! (Its Indian version is 'Noni' fruit juice concentrate said to cure all diseases available in many big cities all over India--Shyam)

The organizer of the largest scheme of that type, Monavie, had previously been stopped by the FDA for making the very same types of lies that Mannatech was fined for. That scheme, like Mannatech's, is based on endless chain recruiting, and causes massive consumer losses.

Consumers are frequently lured into MLM not just by the amazing health claims but by the promises that the products can produce extraordinary income. This income potential often gives the products nearly magical powers, at least for awhile.

Many consumers will swear the products produced cures, better energy, greater intelligence and focus or improved sex, as long as they belive they will soon make a lot of money. Predictably, as the income promises prove unrewarding, the curative health benefits tend to wane. Soon, most consumers quit the scheme and stop buying the products forever. Beyond illustrating, yet again, that many MLMs are in the snake-oil business, there is one more aspect to the Mannatech case that applies to the larger MLM industry.

The Attorney General of Texas charged this company only with making false product claims, but it did not prosecute it for operating a pyramid scheme. Manatech is a classic endless chain recruitment scheme. It has minimal retail sales, and only pays a 9% commission for retailing while paying 45% out in recruitment-based commission, with most of that money going only to the those at the very top of the recruitment pyramid. So, why was Mannatech not prosecuted for pyramid fraud?One probable reason is that under Texas law, an MLM can legally operate an endless chain pay scheme, with virtually no retail customers, a classic "closed" market in which product depends entirely on endless chain recruiting. How could this be?

The lobby group for the MLM industry, the Direct Selling Association (DSA), wrote the "anti-pyramid" law in Texas. As in several other states, the DSA has pushed through bills that revise anti-fraud law so as to make "product-based" pyramids legal. The trick in the wording is to exempt schemes in which pyramid payments are based on "product purchases." With that wording change, pyramid rewards can be paid on the purchase derived solely from those within the pyramid and in which endless chain recruiting is the only way to make a profit. Even though such a plan is closed, non-competitive and dooms 90-99% to losses, (since they will be in bottom ranks), the law makes it legal for promoters to claim they are a legitimate "income opportunity" for all.

Some pyramids have tried to disguise the money transfer as "gifts." MLM's favored disguise is "product purchases." Most MLM products are absurdly overpriced and 40-50% of the exorbitant price is transferred to the pyramid recruiters as "commissions." In this way, the pyramid money is laundered through "products." The Texas law, written by the DSA, exempts schemes, such as Mannatech, that do this. This same "wolf in sheep's clothing" law that pretends to be "anti-pyramid" while in fact protecting the scams, was also introduced as a proposed federal law. Pyramid Scheme Alert opposed the bill and alerted Congressional representatives of its devious and harmful intent. It never got out of committee in Congress, but it did gain some Congressional supporters, many of whom were strongly supported by the Amway corporation, such as Congresswoman Sue Myrick of North Carolina. The sponsor of this pro-pyramid bill in Congress was Joe Barton of Texas.

No takers of Amway products on e-bay proves that they are rubbish

Dear Shyam

Mr. (Tex) Johnson and Mr. (IBOFB) Steadson are customers of 'Amway's' instigators, but since they are self-confessed de facto commission agents of 'Amway's' instigators, they cannot be accurately described as authentic retail customers (no matter what they steadfastly pretend to be reality). Whether they choose to admit it or not, what they've actually been peddled, and have peddled to others, is an infinite share of their own finite money. Granted, they have been given a few cheaply-produced packets of soap, tubes of toothpaste, etc., just to distract their minds. However, they might as well have been given bottles of snake -oil.
During the recent UK enquiry, a team of experienced government accountants began to study the so-called 'Amway Compensation Plan.' Tellingly, even they found it to be so fiercely complex, that they couldn't make head or tail of it. What the accountants apparently never grasped was that the whole of this document is nothing more than mystifying nonsense, economic hocus-pocus designed to shut down individuals' critical and evaluative faculties without their fully informed consent. It doesn't matter in the slightest how you divide up the money in any closed-market, the very most the overwhelming majority of contributing participants can hope to get back, is what they started with. This incontrovertible logic applies no matter what mind-numbing camouflage is used to disguise this form of fraud. Pseudo-scientific mystification, is one of the universal dentifying characteristics of a cult.
Since the 'Amway' products are (effectively) unsaleable on the open market, they are another red herring. If anyone doubts this fact, then I suggest they just take a look on e-bay (all around the world); where they can find mountains of 'Amway' rubbish always for sale at prices that are an accurate reflexion of its real lack of value.
David Brear

There is nothing like perpetual motion engine to generate energy or money

Dear Shyam,

Reading the latest puerile outburst from Mr. (Tex) Johnson, I think I have just proved my point. Trying to reason with this typically provocative narcissist is exactly like trying to reason with a 3 year old boy who believes in 'Santa Claus' and who cannot accept that his parents have deliberately deceived him. It is interesting to note how Johnson exhibits a tell-tale lack of empathy and how he projects all of his own narcissistic characteristics onto others. Johnson's self-esteem/identity and related-psychological function are evidently still dependent on maintaining his group-'Amway' delusion of moral and intellectual supremacy.
To any casual observer who does not fully-understand the absolute, reality-denying belief present in a cultic group, it can seem impossible that educated adults can unconsciously accept that, without genuine retail customers, the 'Amway' scheme can miraculously produce a surplus of money from thin air to be shared out amongst its contributors so that they can all expect to make a profit, and that anyone challenging this economic impossibility is a liar. However, all the aggressive comments of persons like Johnson and Steadson are conclusive proof that this really is so.
In the adult world of quantifiable reality, the fallacy of the closed-market is as ridiculous as the fallacy of perpetual motion. Money cannot be created from nothing, just as energy cannot. Interestingly, there is at least one cultic group whose leader claims to have constructed a perpetual motion engine.
Johnson's latest reality-denying comparison of 'Amway' to major US retailers (whose profits derive from selling the overwhelming majority of their merchandise to the public) requires no further comment.

David Brear

Stick strictly to the law of the land my Amway friend

My friend is again talking absurd. I raised a point that money circulation scheme is a prohibited activity in India and is a crime under Indian laws. This point is amply proved in the Andhra Pradesh State High Court and even the Supreme Court of India concurred with it while dismissing the petition of Amway India stating there is no merit in their petition.

Instead of tackling the legal issues, why do these Amway apologists beat around the bush. Come to the point my friend. If anybody wants to prove that the Amway's scheming model is legal then prove it. Otherwise, stick to your own argument and sit at home convincing yourself that you are right. The whole activitiy is illegal and the Amway India needs to shut down its activities in the country.

What I do not understand is why nearly half million Amway distributors in India do not open their mouths and defend the Amway. That is because they know well that it is a fraudulent company and a very few of them are only making money from the scheming model of Amway.

What is the point in some people sitting in far off continents attempt to defend the Amway India? Do they know what exactly is going on in India. Some apologists say that the Amway has changed its model in UK or some other country. Why the Amway is not changing its business activities in India too. The Amway is trying its best to extract as much money as possible from India and then only it may attempt to change its scheme.

My fellow countrymen, come out open when you lose money in such money circulation schemes introduced by Amway, Herbalife, Forever Living Products, etc., and file criminal cases against such companies. Then only these companies would retreat. Do not sit at home thinking that it is your fate that you are cheated. It is not fate at all. It is only cheating by these companies.

The whole point was missed by Amway apologist

In a bid to support Amway with over enthusiasm, the Amway apologists miss the real issue that is money circulation scheme in the guise of product sales and service.

They should learn the history of money circulation schemes in India. They cheated several thousands of people in rural areas as well as urban areas. Of course, there is no such limitation of rural or urban for gullibility. There had been an open money circulation schemes. The Andhra Pradesh State Government for the first time in India enacted a law curbing the money circulation scheme menace. Several other States followed suit. Finally, the Central Government stepped in and enacted Prize Chits & Money Circulation Schemes (Banning) Act, 1978. The schemes were effectively checked.

Every thing worked well till the Amway entered the Indian market. The company entered the country with the promise of foreign direct investment. It claimed that it was introducing a direct selling system which would greatly be beneficial to the consumers. Though the Amway registered itself as Amway India Enterprises, there is no Indianness in this company nor in its organisation Indian Direct Selling Association (IDSA). Several other such con companies joined the bandwagon of IDSA.

These con companies call themselves direct selling, multilevel marketing, network marketing, referral marketing companies.

These con companies on the pretext of providing business opportunity to millions with the promise of earning great profits, ultimately duped them. They also hoodwink the law enforcing agencies. It is only money circulation scheme with the people at the top only earning lot of money and leaving the downline hgh and dry. That is why more than 90 per cent people who joined such schemes become victims.

The main objective of all these companies is promoting money circulation schemes what they call in the USA ponzi schemes. Exchange of products is only a veil. The real motive is money circulation scheme to make lot of money. Multi-Level Marketing is Making Lots of Money with Other People's Efforts + Other People's Money (MLM= OPE+OPM).

These apologists are the bandits at the top level, making lots of money with other people's efforts and other people's money. It is a futile effort to convince these thieves that what they are doing is wrong. They develop a defence mechanism to defend themselves and their activities at all costs.

"The easiest thing in the world is to convince yourself that you are right."

They refuse to see reason and if they succumb to reason they have to forego their easy living and easy profits.

My aim is to bring awareness among people not to fall prey to the machinations of these fraudulent companies. Moreover, people would not stop from joining these companies even if they are told that they would be cheated. They must be told in unequivocal terms that joining and making others join such schemes is a crime attracting the provisions of the PCMCS Act, 1978. Then only they refrain themselves from joining such schemes.

Mind this my fellow countrymen, joining or making others join such schemes is illegal and you may be penalised with imprisonment of up to three years prison term and fine.

Liars and thieves of Amway

Dear Shyam


When you read the pathetic, ego-defensive comments of unquestioning 'Amway' believers such as 'Tex' (Scott Johnson) you begin to realize just how much of a waste of time and effort it is trying to explain to them exactly how they have been deceived. In a criminogenic cultic group like 'Amway,' core-adherents' minds have been programmed systematically to exclude all rational argument and to denigrate all free-thinking individuals challenging the authenticity of the group. You might as well be trying to explain to a group of 3 year old children that 'Santa Claus' does not exist and that television, magazines, their parents, etc. have all lied.

The UK government investigation confirmed quite conclusively that less than 4% of all 'Amway's' transactions were genuine retail sales. Therefore, since virtually all the money available in 'Amway UK' to be divided up as commission payments was coming from the commission agents themselves, it was a mathematical impossibility for the overwhelming majority of them to receive a profit. The simplest way to prove that a closed-market is an economic fallacy, would be to ask 'Tex' and 9 of his arrogant 'Amway' chums each to place $10 on a table, then ask them to divide up the resulting $100 so that each contributor receives more than he paid in. Obviously, it cannot be done. Anyone who claims the contrary is a liar, and anyone peddling commission agencies in a such a deliberately unviable system is a thief.

Kindest regards

David Brear

Indian law is unique and Amway officials would soon be penalised

Recently, the managing director of Amway India Enterprises Mr William Pinckney in a press meet recently said that there is a need to regularise direct selling in India. One can deduce by that statement what he is up to. He is preparing ground to regularise the Amway swindling by making amendments to the Indian laws.

After all these criminal cases, writ petitions, High Court judgements and more criminal cases, the Amway India Enterprises, the American swindler which has been deceiving people for over a decade is still hopeful of hoodwinking the law enforcing authorities in India. The Amway apologists should realise that the Indian law is unique and it is going to hurt Amway business in a big way soon. That is why Amway India is trying to hard to convince authorities that its business is legal.

The basic question is how the Amway distributors are going to become millionaires in a short span. This question they never answer. You have to keep on enrolling more members and keep on selling the hopelessly high priced products to people. But where do you find so many people. That is why it is called mathematical impossibility. Who will buy these high priced products? They will but only if you induce them to become millionaires if they enroll more members. That is why the Andhra Pradesh High Court called it a 'vicious circle'. The point is very simple and any layman could understand it. But Amway apologists conveniently try to pull an innocent face stating that everything about Amway is great.

The Indian Law penalises money circulation schemes i.e. ponzi schemes and the Amway India's scheme is nothing but a money circulation scheme in the guise of product sales.

Andhra Pradesh High Court rightly analysed the scheming model of Amway

I am really glad to hear our from our friends. Sparring cannot be a single-sided one to make it livelier. My friend pointed out that there is nothing that nails Amway in the second letter. Anyway the Amway apologists all over India show the first letter to everyone but not the second letter. Why? The reason is the second letter nailed the Amway India Enterprises for its pyramid scheme which attracts the provisions of the Prize Chits & Money Circulation Schemes (Banning) Act, 1978. Nowhere in the world that type of wonderful legislation exists to punish the fraudulent companies like Amway and a plethora of other companies.

Now I would like to present the part of the judgement of Andhra Pradesh High Court that hit hard the Amway India in the gut. It is certain that it is going to hurt further Amway India in the forthcoming trial against it.

"... 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. By holding out 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. On the part of the Amway by pushing each member to achieve the minimum sales worth Rs. 2,000 per month, (this sale includes enrollment of new members) the Amway is assured of about Rs. 1,000 crore per annum. All this squarely satisfy the description of quick/easy money. In addition to this, it is an admitted fact that each person in order to continue to be distributor, shall pay renewal subscription fee of Rs. 995 per annum. In para-11(b) of the counter affidavit on the admitted number of distributors of 4,50,000 this amount is calculated at Rs. 45 crore per annum. These figures are not denied by the Amway India in its rejoinder. The plea of the Amway India that there is no compulsion that a member shall renew his distributorship looks to us specious. Once a person becomes a distributor in a scheme of this nature where the sops in the shape of commission are so luring, it would be very difficult for a member to withdraw from their membership to avoid payment of the annual renewal subscription fee.

From the whole analysis of the scheme and the way in which it is structured it is quite apparent that once a person gets into this scheme he will find it difficult to come out of the web and it becomes a vicious circle for him. In any event the Amway India has not specifically denied the turnover they are achieving and the income they are earning towards the initial enrollment of the disributors, the renewal subscription fee and the minimum sales being achieved by the distributors as alleged in the counter affidavit. By no means can it be said that the money which the Amway India is earning is not the quick/easy money. By promising payment of commission on the business turned out by the downline members sponsored either directly or indirectly by the upline members (which constitutes an event or contingency relative to enrollment of members), the Amway India is earning quick/easy money from its distributors, apart from ensuring its distributor earn quick/easy money. Thus the two ingredients are satisfied in the case of Amway too. We are, therefore, of the considered view that the scheme run by the Amway India squarely attracts the definition of 'Money Circulation Scheme' as provided in the Section 2 (c) of the Act. ''

This is how the Hon'ble Andhra Pradesh High Court described the fraud of the Amway India.

Now is it a toolscam or the scheming model of Amway India?

What happened to my Amway friends Tex, ibofightback and their ilk

These days our Amway friends are conspicuous by thier absence. What happened my friends? Where are you? Are you dumbfounded by the presentations? Come out with some stupid comments. I alwlays welcome comments even they are idiotic ones. It seems that you are too stunned to make any comments. That is the reality my friends. The days are nearing for the Amway to close its operations in India. That is why Amway India's managing director William; Pinckney recently asked the Government of India to make policy changes in the direct selling. These crooks always look for new ideas to hoodwink people, law enforcing agencies and the Governments all over world.

Mr Pinckney is regularly attending the criminal court in Hyderabad, Andhra Pradesh. He has to. Otherwise, the court would issue non-bailable warrant for his arrest. The next date for his attending the criminal court is April 30. And again, I suppose, their criminal lawyer would ask for time to present his case. Let us hope, the magistrate would not take the case leniently and give a warning to the defendant lawyer not to prolong the case.

The letter which is being misused by the con companies like Amway

LETTER OF SECRTARY, MINISTRY OF CONSUMER AFFAIRS BEING MISUSED

BY CON COMPANIES LIKE AMWAY

The following letter of Consumer Affairs Secretary which does not deal with sponsoring activities is being claimed by the con companies like Amway to legalise their illegal acts. This letter has been annulled on a reference of the misuse of this letter by the Central Economic Intelligence Bureau. But these con promoters do not speak of this annulled letter, but cleverly display the Secretary, Consumer Affairs letter distract the attention of law enfording authorities and the common man; who questions their illegal activities.

D. O. No. 21/22/IT/2001

Wajahat Habibullah

Secretary

Phone: 23782807

Fax: 23384716

Government of India

Ministry of Consumer Affairs, Food And

Public Distribution

Department of Consumer Affairs

Krishi hawan, New Delhi 110 001

Subject: Inapplicability of the provisons of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 to direct/network/multi-level marketing.

A number of representations have been received by this Department regarding alleged harassment of companies dealing with direct/network/multilevel marketing by the police authorities in various States/Union territories. Veryoften the provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 are invoked against these companies. We have examined these issues indetail, including consulting the Ministry of Law, regarding the applicability of the said Act to these companies. It is our considered view that the provisions of the said Act are not applicable to companies dealing with distribution of goods including multilevel/network marketing companies. Interpretation of various judgments by the Hon'ble Supreme Court {(a) State of West engal vs. Swapan; Kumar Guha (1982) 1 SCC 561; (b) Srinivasa Enterprises vs. UOI (1980) 4 SCC 507; (c) Reserve ank of India vs. Peerless Co. (1987), 1 SCC 499} implies that activities of direct/network/multilevel marketing do not fall within the provisions of the aforesaid Act.

In light of aove, I would request you to kindly instruct the officials concerned to distinguish between Companies dealing with activities coming stgrictly under the purview of the above Act and those such as direct/network/multilevel marketing dealing in distriutino of goods so as to avoid harassment and commercial losses to bona fide investors.

Wiht regards

Yours sincerely

Sd/xxxxxxxxxxxxxx

(Wajahat Habibullah)

Copy to: Chief Secrtaries of All States & UTs

Copy for information to: Shri N Gopalaswami, Secretary, Ministry of Home Affairs North Block, New Delhi

Sdxxxxxxxxx

C K G Nair

THE CONSUMER SECRETARY'S LETTER WAS ANNULLED BY

THE FOLLOWING CLARIFICATION LETTER

The letter of Consumer Secrtary was annulled by the following clarification letter of the Ministry of Food, Publid Distribution and Consumer Affairs, on the reference of Central Economic Intelligence Bureau, Government of India, who had earlier informed the Ministry of Food and Public Distribution and Consumer Affairs about the misuse of the letter by the so called MLM, NWM etc con companies

F. No. 21/(22)/IT/2001

Government; of India

Ministry of Consumer Affairs, Food& Public Distribution

Department of Consumer Affairs

Shastri Bhavan, New Delhi,

Dated 23.9.2003

To

Ms. Sunitha Kalla,

Deputy Director General & Joint Secretary

Ministry of Finance, Department of Revenue

Central Economic Intelligence Bureau

6th Floor, 'B' Wing, Janpath Bhavan

Janpath, New Delhi 110 001

Subject: Applicability of the provisions of the Prize Chits and Money Circulation Schemes (Banning) Act 1978 to pyramid marketing structures/schemes-Regarding.

Madam,

I am directed to refer to your D.O. Letter No. 301/15/200-CEIB (Pt-II) dated the 22nd September, 2003 addressed to Shri Wajahat Habibullah, Secretary (Consumer Affairs) on the subject mentioned above and to say that this Department was considering the issue of direct selling/network/multilevel marketign as an alternative form of marketing of foods and the entire issue was looked from that angle. However, subsequent feed back/response have showed that companies using pyramid structured marketing techniques too sell their products putting forth their schemes based on the clarification issued vide D.O. letter of even no dated the 31st March, 2003 claiming that their activities also do not fall within the provision of the above said Act. It is clarified that this department's clarification of even number dated 31st March, 20-03 does not cover pyr;amid structured marketing schemes. That area also does not fall within the purview of this Department.

This issues with the approval of Secretary(CA).

Yours faithfly

Sd/-xxxxxxxxxxx

(Alice Chacko)

Under Secretary to the Government of India

Copy to: Chief Secretaries of all States and Union Territories

Sd/-xxxxxxx

(Alice Chacko)

The fraudusters like Amway and other members of Indian Direct Selling Association (IDSA) who indulge in illegal money circulation schemes in the name of direct/network/multilevel marketing show to the police and other authorities the first letter but they never mention about the following letter. This is how these companies are thriving in the great swindling.

Just some curious facts-from a 2007 report

These are some curious facts presented as evidence at a court hearing in UK by the then secretary of state, way back in 2007

39,000
agents working for Amway

27,000
(71%) had no income

11,410
(30%) earned something

7,492
(of the 11,410) received average of £13.53 per year

101
agents received 75 per cent of bonuses

£116K
paid to top earner Trevor Lowe

26
number of years Mr Lowe was an agent

$3.6billion

estimated personal fortune of Richard De Vos who founded Amway.

Source: Evidence at companies court hearing

Check out the whole report here guys

Open letter to United States President Barack Obama

Dear President Obama

It is assumed that you are a man of word and love for your country and people at large all over world. We also strongly believe that you are really honest in your word and deed to bring back American economy on the track again. For that you have to undertake one more task. You have to close down the operations of Amway in your country and seize its assets which have been illegally amassed by it. It is a fraudulent company which is running ponzi scheme.

The same company is also robbing the people of my country i.e. India. In fact, that fraudulent company called Amway has been defrauding people in more than 80 countries.

We have a wonderful legislation called Prize Chits & Money Circulation Schemes (Banning) Act, 1978 under whose provisions criminal cases were filed against Amway India and soon it is going to be punished.

It is an open fact that the political leaders in your country have accepted 'gifts' from Amway and have been allowing the Amway to continue its operations in the USA. You can bring a similar enactment in the US of A also to punish such fraudulent companies which have been lining their pockets through fraudulent schemes.

The modus operandi of these companies is simple. They overprice their products and share the extra money among themselves defrauding the gullible people. This is what is called money circulation scheme. It is prohibited in India and it will be better you also enact a similar law in the US of A.

The US Administration should immediately arrest the officie-bearers of Amway for cheating the American public and freeze its assets. It should also return the enormous funds siphoned out from India and other countries to the people of these countries.

In one word, the scheme of Amway can be called product-based pyramid scheme and it should be penalised at once.

Destroying families Herbalife way

I received an email from a housewife narrating how she lost more than one hundred thousands rupees by way purchasing products of Herbalife. So is the case with Forever Living Products.

These fraudulent companies invite you to attend a seminar in which you are given a lush green picture of your future. All you have to do is becoming the member and purchase products and sell them. They heap praises on their products stating that they would heal all ailments under the sun. At the same time they say that their products are only food supplements. Never ask how can ailments be cured by consuming food supplements. That is the whole racket. The twist of words would get you off the ground. If you fall for them you would just become another loser.

All the time the company would get the benefits and the people are the losers. All products are overpriced and the upline members would share the booty.

Though we have been telling people not to fall prey to these fraudulent companies there would always be new victims.

My fellow countrymen. Wake up. Before attending any seminars or 'business opportunities' do some research into the scheming business model of these fraudulent companies.

It is not a business opportunity but a crime. As per the provisions of the Prize Chits & Money Circulation Schemes (Banning) Act, 1978, joining into such schemes and making others to join such schemes are crime attracting the punishment imprisonment and fine. Unwittingly you are becoming a criminal for no fault of yours. Whenever you come across such invitations, go to police and lodge a criminal complaint such organisers of such schemes. The DGP of Andhra Pradesh has already issued directions to all police stations to book cases against money circulation schemes.

It is high time we acted in unison and stop these fraudulent companies.

Here is the list of fraudulent companies which are promoting money circulation schemes in the guise of selling products and services including insurance policies.

Amway India Enterprises

GoldQuest International (Now extinct and facing criminal case)

Herbalife

AMC Cookware

Avon Beauty

Forever Living

Hindustan Unilever Network

Modi Care

Oriflame India

Quantum International (Now extinct)

Sunrider India

Tupperware

Max New York Life

Alto Enterprises

Daeshan Trading (India) Pvt Ltd

Sriram OTH Ltd

CNI Enterprises India Pvt Ltd

RMP

Team Life Care Insurance Ltd

Golden Trust Fund

Securelife

And the list is endless.

Amway files writ petition against Government Order in AP High Court

The Amway India has filed writ petition No. 21284 of 2008 and Amway distributor DVSL Deepak filed another writ petition No. 21286 of 2008 in the Andhra Pradesh High Court aggrieved by G. O. M.S. No. 178 dated 15-09-2008 restraining Amway India Enterprises from advertising in any media about their business module/plan.

The Home Department which has issued the GO MS No. 178 in its counter affidavit submitted to the Andhra Pradesh High Court, stated that the each of the contentions now raised were discussed threadbare by a Division Bench of the Andhra Pradesh High Court while dismissing the writ petition No 20470 of 2006 along with another writ petition on 19-07-2007. The writ petitions were dismissed and it is relevant to extract the declaration of the Division Bench of Andhra Pradesh High Court which is as follows:

"...We are, therefore, of the considered view that the scheme run by the petitioners squarely attracts the definition of 'Money Circulation Scheme' as provided in Section 2 (c) of the Act"

By virtue of the above declaration, it is clear that the business module/plan of the company squarely comes within the provisions of the Act. As a matter of fact, it is the petitioner company which has invited the above said declaration from the Andhra Pradesh High Court. It is necessary to state here that the company filed special leave petition (S.L.P.) (Civil) No. 13414 of 2007 before the Honourable Supreme Court of India and the Honourable Supreme Court dismissed the SLP on 14.8.2007.

However, the Supreme Court directed as follows:

"We, however, direct the investigation officers to complete the investigation within a period of six months from today. The investigation officers shall carry on the investigation with a sense of expedition, uninfluenced by any observation made by the High Court."

The counter affidavit stated that merely because the Supreme Court made such observations, the findings and declaration of the Andhra Pradesh High Court referred to above, it cannot be said that the same have ceased to exist. Investigations are completed and charge sheet has been filed. Though criminal prosecution is pending, the declaration of the High Court that the business module of the Amway India squarely falls within the prohibited transactions under the said Act remain and is still in force.

The affidavit also stated that the State government issued the GO after the charge sheet is filed, invoking the power conferred under Section 8 of the Act. (Kindly go to older posts to read the provisions of the Act)

The affidavit also categorically stated that the contention of the petitioners that any action against the company and others under Section 8 can be taken only after the final verdict of the criminal court finding them guilty is baseless and untenable. In this regard it is stated that the observations of the Supreme Court are sought to be distorted by the petitioners and those observations cannot be construed to mean that the Supreme Court has interfered with the categorical findings of the High Court.

In this view of the matter, the action taken by the Andhra Pradesh State Government under Section 8 of the Act is well within the competence and need not await the final outcome of the ongoing criminal trial in view of the judgement of the High Court. The affidavit asserted that restraining any publication/advertisement which falls within the mischief of the provisions of the Act would also fall within the ambit of Section 8.

The affidavit stated that the action of the State is perfectly legal and valid.

The Home Secretary, Mr Ajoyendra Pyal, stated in the affidavit that there is a specific finding against the petitioners recorded by the High Court and having invited such finding, it is not open for the petitioners to contend that the scheme operated by them would not fall within the meaning of Money Circulation Scheme. At any rate, permitting publication of such an advertisements to lure gullible public, despite a categorical finding, would amount to allowing the petitioner to violate law and propagate the business plan/module which has held to be illegal. It would practically amount to abetment of crime apart from giving a go bye to the findings of the High Court.

Referring to the contentions of the petitioner that the GO is violative of the fundamental rights guaranteed to the petitioners under Article 19(1) (g), the affidavit stated that it is not a question of carrying on a trade and it is a question of propagating an illegal trade and therefore the said contention is liable to be rejected.

This is the extract of the affidavit. Is it enough for Amway apologists to learn the stand of the Government and the Judiciary? Now go and hang yourself in shame.

Amwayshould have quit India on its own

The Indian courts held the Amway scheme is unlawful following the writ petitions filed by these fraudulent companies appealing the court to declare their business is legal. However, the court asked the police to conduct full investigation into the activities of these companies. The criminal cases are pending against these companies. That means, the due process of law, that is framing of charges, trial and punishment, would take some more time.

These companies are so shameless that they continue their fraudulent business model even after the Andhra Pradesh High Court categorically stated that the scheme of these companies would attract the provisions of the Prize Chits & Money Circulation Schemes (Banning) Act, 1978. They should have quit the country on their own once the courts gave their verdict. Now they still continue their business on the pretext that the criminal case is pending against them.

I would like to point out one more time here, if a criminal case is pending against a person can he continue the same offence again and again with impunity. Is it not necessary more criminal cases should be filed against such companies?

UK Govt must file criminal case against AmwayUK

Shyam, I have been reading your latest posts on 'Corporate Frauds Watch.'

Well done, these are excellent well thought-out pieces.

In the face of sneering cowards, your own courage and dignity shine through like a beacon. It is my considered opinion that you acting in defence of your country and your fellow citizens.

You are quite right to concentrate on issues which these sinister 'Amway's' apologists cannot refute. Obviously, the one question that they cannot answer is:

Exactly what percentage of 'Amway India Enterprises' claimed 'sales' are genuine retail transactions (i.e. purchases made by individuals who are not agents of the company)?

Tellingly, the corporate officers of 'Amway India Enterprises' offer no accurate, verifiable information on this vital point. They are are, in fact, telling lies.

The UK government regulators discovered that during 2006-2007 more than 95% of 'Amway UK Ltd.'s' claimed 'sales' were, in fact, a puerile fiction, because they were counterfeit retail transactions made to 'Amway Distributors' themselves. Thus, 'Amway UK' was caught red-handed deliberately operating, and hiding, an effectively unviable closed-market; for without sufficient external revenue (due to the banal quality and exhorbitant pricing of the products), it is a mathematical impossibility for the contributing participants in such a sealed economic system to receive a profit. Less than 5% of the money allegedly available for 'Amway' commission payments in the UK came from outside the hermetic 'Amway' market. No matter how this money was divided, the overwhelming majority of 'Distributors' were condemned to make an over-all loss. Mysteriously, the UK government lawyers failed to explain exactly what was occurring to the both the UK High court and the UK Appeal Court. However, the Corporate officers of 'Amway UK Ltd.' should have faced criminal fraud charges. They were actually peddling UK citizens infinite shares in their own finite money. Instead, the UK government regulators chose to attack 'Amway' in the civil courts using technical insolvency procedures. This less-than-intellectually-rigorous approach partly explains how 'Amway UK Ltd.' escaped official closure. That said, 'Amway' has effectively been halted in the UK, but the racketeers behind 'Amway' and all the other 'Multilevel Marketing' cults are exploiting the UK episode to commit fraud around the globe.

Hopefully, the regulators in the world's largest democracy will not be moral cowards and make the same mistakes as were made in the UK.
David Brear