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.