Thursday, 7 August 2008
Wednesday, 6 August 2008
Fraudsters come up with another money circulation scheme a la Amway
Congratulations to the Warangal police under the able guidance of the star police officer, Viswanath C. Sajjanar who busted another racket. This time it is a computer education company which indulged in money circulation scheme in the name of giving computer education to the youth. The modus operandi is same that of Amway which has been into money circulation scheme in the name of selling products.
On 05.08.2008 basing on a specific complaint, a case has been registered vide Cr.No. 338/08 U/s 385, 420 and 34 of IPC and Sec 4, 5 & 6 r/w 2 (c), 3 of Prize Chits and Money Circulation Scheme (Banning) Act, 1978 of PS Hanamkonda against “eBIZ.com Pvt Ltd.”, Pavan Malhan, Managing Director of eBIZ.com Pvt. Ltd., Ayyappa Swamy, Aditya Bhogaraju, Mohith Manjunath, Rajesh Kumar, Phani Kumar etc.
The complaint reveals that the complainant was trapped by eBIZ.com members and they induced him to become its member. After taking membership he was initially asked to enroll further members to get more commissions. Later on he was harassed mentally in this regard. The complainant further explained about the details of the scheme which involves enrollment of members, commission earned and also the titles given to various members depending on their enrollment.
eBIZ.com Pvt Ltd. has started its business in India from 2001 headed by one Pavan Malhan with its Head Office at Noida, U.P., and started promoting computer educational programme. In the name of computer educational programme, they have schemes which are in the nature of enrollment of members.
To become a member of the scheme, a person has to pay Rs. 7, 585/-. Then the member has to further enroll more members to earn more commission. The enrollment is as per Binary plan.
If the associate sells eBIZ educational programme and web first 3 packages with 1/3:2/3 ratio under him he will get Rs.2000/-, for next 3 sales he will get Rs2000/- with 1/3:2/3 ratio, for another 3 sales he will get another Rs2000/- and this will become a cycle of 9 Sales and the associate will get a total of Rs.6000/- and for the 2nd, 3rd, 4th, 5th cycles of each 9 sales, the associates will get Rs. 3000/- for each cycle. For the 6th cycle of 5 sales the associate will get Rs. 8.000/- and the total sales will become 50 which is also called an ORBIT and the total sum of Rupees earned by the associate will become Rs. 26,000/-. From the 2nd Orbit onwards the associate will earn for 1st, 2nd, 3rd, 4th, 5th cycles of each 9 sales get Rs. 2,500/- each and for the 6th cycle of 5 sales the associate will get Rs. 7,500/- and the total sales become 50 and the earning for the 2nd Orbit will become Rs. 20,000/-. Thus depending upon the enrollment the chain continues and the member continues to get commissions.
Depending upon number of members enrolled, the members are given fancy names like:-
Silver Associate, Gold Associate, Diamond Associate, Diplomat, Silver Diplomat, Gold Diplomat,Diamond Diplomat, Ambassador, Silver Ambassador, Gold Ambassador, Diamond Ambassador, Chairman Circle.
1st Step 3 Sales: one gets Rs.2000 with sales in the ratio of 1/3 : 2/3
2nd Step next 3 Sales one gets Rs.2000/- with sales in the ratio of 1/3 : 2/3
3rd Step next 3 Sales one gets Rs.2000/- with sales in the ratio of 1/3 : 2/3
Thus every member of eBiZ.com Pvt Ltd., tries to enroll new members and thus accumulate sales, orbits so as to enable them to become Sliver Associate and thus go up the ladder to become Diamond Diplomat to Chairman Circle and so on. If he/she fails to get further enrollment, then the member tries to make his own sales to accumulate orbits and be in the rat race.
The members also arrange meetings in star hotels, big hotels with entrance fee for luring and inducing public.
Further people specially the middle class, innocent students are lured into such schemes and thus they contribute money and waste their precious time to such schemes and thereby set up a chain of further contributors, from each of whom the original contributor will get back an amount of money he had initially paid to the scheme and thereby gain financially. Each of the second set of contributor is expected to generate further sets of contributors likewise and gain money. It is financially impossible for such a chain to work endlessly with profit to everybody concerned.
All such schemes finally get broken at some stage, resulting in financial benefit to a few who had joined at the beginning of the scheme and financial loss to a very large number of contributors who had joined the scheme at a later stage. Such schemes mostly work to the detriment of middle class people and innocent students, who invariably look for some short-cut or the other for augmenting their income. Thus the gullible public would have just fallen for the scheme without understanding its non-workability.
In this case further investigation is on.
Alert: Thus the public is once again requested not to fall prey to such Direct Marketing, Multi-level Marketing, Network Marketing, Referral Marketing, Sponsor Marketing, Chain Marketing etc. Such schemes are prohibited under the provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
On 05.08.2008 basing on a specific complaint, a case has been registered vide Cr.No. 338/08 U/s 385, 420 and 34 of IPC and Sec 4, 5 & 6 r/w 2 (c), 3 of Prize Chits and Money Circulation Scheme (Banning) Act, 1978 of PS Hanamkonda against “eBIZ.com Pvt Ltd.”, Pavan Malhan, Managing Director of eBIZ.com Pvt. Ltd., Ayyappa Swamy, Aditya Bhogaraju, Mohith Manjunath, Rajesh Kumar, Phani Kumar etc.
The complaint reveals that the complainant was trapped by eBIZ.com members and they induced him to become its member. After taking membership he was initially asked to enroll further members to get more commissions. Later on he was harassed mentally in this regard. The complainant further explained about the details of the scheme which involves enrollment of members, commission earned and also the titles given to various members depending on their enrollment.
eBIZ.com Pvt Ltd. has started its business in India from 2001 headed by one Pavan Malhan with its Head Office at Noida, U.P., and started promoting computer educational programme. In the name of computer educational programme, they have schemes which are in the nature of enrollment of members.
To become a member of the scheme, a person has to pay Rs. 7, 585/-. Then the member has to further enroll more members to earn more commission. The enrollment is as per Binary plan.
If the associate sells eBIZ educational programme and web first 3 packages with 1/3:2/3 ratio under him he will get Rs.2000/-, for next 3 sales he will get Rs2000/- with 1/3:2/3 ratio, for another 3 sales he will get another Rs2000/- and this will become a cycle of 9 Sales and the associate will get a total of Rs.6000/- and for the 2nd, 3rd, 4th, 5th cycles of each 9 sales, the associates will get Rs. 3000/- for each cycle. For the 6th cycle of 5 sales the associate will get Rs. 8.000/- and the total sales will become 50 which is also called an ORBIT and the total sum of Rupees earned by the associate will become Rs. 26,000/-. From the 2nd Orbit onwards the associate will earn for 1st, 2nd, 3rd, 4th, 5th cycles of each 9 sales get Rs. 2,500/- each and for the 6th cycle of 5 sales the associate will get Rs. 7,500/- and the total sales become 50 and the earning for the 2nd Orbit will become Rs. 20,000/-. Thus depending upon the enrollment the chain continues and the member continues to get commissions.
Depending upon number of members enrolled, the members are given fancy names like:-
Silver Associate, Gold Associate, Diamond Associate, Diplomat, Silver Diplomat, Gold Diplomat,Diamond Diplomat, Ambassador, Silver Ambassador, Gold Ambassador, Diamond Ambassador, Chairman Circle.
1st Step 3 Sales: one gets Rs.2000 with sales in the ratio of 1/3 : 2/3
2nd Step next 3 Sales one gets Rs.2000/- with sales in the ratio of 1/3 : 2/3
3rd Step next 3 Sales one gets Rs.2000/- with sales in the ratio of 1/3 : 2/3
Thus every member of eBiZ.com Pvt Ltd., tries to enroll new members and thus accumulate sales, orbits so as to enable them to become Sliver Associate and thus go up the ladder to become Diamond Diplomat to Chairman Circle and so on. If he/she fails to get further enrollment, then the member tries to make his own sales to accumulate orbits and be in the rat race.
The members also arrange meetings in star hotels, big hotels with entrance fee for luring and inducing public.
Further people specially the middle class, innocent students are lured into such schemes and thus they contribute money and waste their precious time to such schemes and thereby set up a chain of further contributors, from each of whom the original contributor will get back an amount of money he had initially paid to the scheme and thereby gain financially. Each of the second set of contributor is expected to generate further sets of contributors likewise and gain money. It is financially impossible for such a chain to work endlessly with profit to everybody concerned.
All such schemes finally get broken at some stage, resulting in financial benefit to a few who had joined at the beginning of the scheme and financial loss to a very large number of contributors who had joined the scheme at a later stage. Such schemes mostly work to the detriment of middle class people and innocent students, who invariably look for some short-cut or the other for augmenting their income. Thus the gullible public would have just fallen for the scheme without understanding its non-workability.
In this case further investigation is on.
Alert: Thus the public is once again requested not to fall prey to such Direct Marketing, Multi-level Marketing, Network Marketing, Referral Marketing, Sponsor Marketing, Chain Marketing etc. Such schemes are prohibited under the provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
Tuesday, 5 August 2008
Why studied silence my friend
Shall we take it for granted that our friend is silent over the issue because it is the last nail in the coffin. But it is not so. There is more to come. Lies, lies and again lies regarding the scheme and its implementation. Ok my friend break the silence and say something even if it is ridiculous and meaningless and even stupid coment.
Let us go deeper in the scheme in the next episode.
Let us go deeper in the scheme in the next episode.
Monday, 4 August 2008
Sunday, 3 August 2008
The role of intermediaries in the Amway 'business model'
Let us move on further on the role of intermediaries of Amway as there is a stone-wall silence on the fraud of foreign direct investment (FDI) in India. Let us take it for granted that the Amway lied to the Andhra Pradesh High Court regarding the FDI in India. And as per the meaning of direct sales, Indian Federation of Direct Selling, which is an independent body, defined its own version of direct selling and the members of the Federation are only bound by it. Direct selling means only direct selling goods and services to the customers. There is no question of ignorance or arrogance.
Before citing the number of intermediaries in the Amway business model, let us look at the various incentives/commission/profit paid from the cost of Amway products to the intermediaries. Profit @ 20%, maximum peformance @ 21%, leadership commission @ 4%, Ruby commission @ 2%, monthly depth commission @ 1%, Emerald commission @ 0.25%, Diamond commission @ 0.25%, Diamond Plus commission @ 0.25%, Founder's Achievement award Rs. 6 lakh - Rs. 264 Lakh, Founder's Distinguished Service award Rs. 240 lakh - Rs. 960 lakh and All expenses paid-up trip to Peter Island at a substantial cost. In essence it can be safely said that out of the price paid by the end-consumer approximately 49.75 per cent goes towards incentives/commisisons mostly to the IBOs in the upline or top level and the inherent costs incurred by Amway in awarding Founder's Achievement award and Founder's Distinguished Service awards. Moreover, the expenses of paid-trips to Peter Island also included in it. Now it is irrefutably and conclusively proved that more than 50 per cent of the cost paid by the end-consumer for Amway products is spent to enrich the toplevel IBOs besides Amway. To be precise most of the expenditure incurred by the end-consumer of Amway goes into the hands of the top few IBOs and Amway. This is totally contrary and inconsistent with the philosophy of saving additional costs.
Now let us list out the titles/names of intermediaries--Silver Producer, Gold Producer, Platinum, Ruby, Founder's Platinum, Founder's Ruby, Sapphire, Founder's Sapphire, Emerald, Founder's Emerald, Diamond, Founder's Diam ond, Executive Diamond, Founder's Executive Diamond, Double Diamond, Founder's Double Diamond, Triple Diamond, Founder's Triple Diamond, Crown Diamond, Founder's Crown, Crown Amabssador, Founder's Crown Amabassador. In all there are 22 intermediaries who line thier pockets with the price paid by the end-consumer.
More in the coming episode.
Before citing the number of intermediaries in the Amway business model, let us look at the various incentives/commission/profit paid from the cost of Amway products to the intermediaries. Profit @ 20%, maximum peformance @ 21%, leadership commission @ 4%, Ruby commission @ 2%, monthly depth commission @ 1%, Emerald commission @ 0.25%, Diamond commission @ 0.25%, Diamond Plus commission @ 0.25%, Founder's Achievement award Rs. 6 lakh - Rs. 264 Lakh, Founder's Distinguished Service award Rs. 240 lakh - Rs. 960 lakh and All expenses paid-up trip to Peter Island at a substantial cost. In essence it can be safely said that out of the price paid by the end-consumer approximately 49.75 per cent goes towards incentives/commisisons mostly to the IBOs in the upline or top level and the inherent costs incurred by Amway in awarding Founder's Achievement award and Founder's Distinguished Service awards. Moreover, the expenses of paid-trips to Peter Island also included in it. Now it is irrefutably and conclusively proved that more than 50 per cent of the cost paid by the end-consumer for Amway products is spent to enrich the toplevel IBOs besides Amway. To be precise most of the expenditure incurred by the end-consumer of Amway goes into the hands of the top few IBOs and Amway. This is totally contrary and inconsistent with the philosophy of saving additional costs.
Now let us list out the titles/names of intermediaries--Silver Producer, Gold Producer, Platinum, Ruby, Founder's Platinum, Founder's Ruby, Sapphire, Founder's Sapphire, Emerald, Founder's Emerald, Diamond, Founder's Diam ond, Executive Diamond, Founder's Executive Diamond, Double Diamond, Founder's Double Diamond, Triple Diamond, Founder's Triple Diamond, Crown Diamond, Founder's Crown, Crown Amabssador, Founder's Crown Amabassador. In all there are 22 intermediaries who line thier pockets with the price paid by the end-consumer.
More in the coming episode.
Saturday, 2 August 2008
All Multilevel marketing schemes are money circulation schemes
All multilevel marketing schemes, whether it is Amway, Herbalife, Tianshi, GoldQuest, or V-Can Network, are money circulation schemes being conducted in the guise of product sales. The camouflage may vary from scheme to scheme and company to company but they are illegal attracting the provisions of the Prize Chits & Money Circulation Schemes (Banning) Act, 1978.
For instance, Amway claims that its business is direct selling. It promised to the Government of India that it would bring in foreign direct investment into the country. As per the information furnished by the Reserve Bank of India, from 1994 to 2006, the Amway has brought in only Rs. 18 crore of foreign investment. But it stated in the affidavit filed by it in the writ petition before the Andhra Pradesh High Court that it invested in excess of US$35 million (151 crore) in India which is patently false.
The term direct selling presupposes that there is no intermediary between the manufacturer and end-consumer. Commencing its commercial operations in India, the Amway, instead of selling goods direct to the end-consumer, has floated this multilevel marketing scheme of enrolling members by sponsoring and introduced many intermediaries in the name of distributors, encouraged its members to sell the articles with retail profit of 20 per cent apart from other performance bonuses. In fact, the Amway is not selling the products direct to the end-consumer. The truth is that the consumer cannot purchase products direct from Amway without becoming its distributor.
Let us explore more of its exploitations in the next instalment.
For instance, Amway claims that its business is direct selling. It promised to the Government of India that it would bring in foreign direct investment into the country. As per the information furnished by the Reserve Bank of India, from 1994 to 2006, the Amway has brought in only Rs. 18 crore of foreign investment. But it stated in the affidavit filed by it in the writ petition before the Andhra Pradesh High Court that it invested in excess of US$35 million (151 crore) in India which is patently false.
The term direct selling presupposes that there is no intermediary between the manufacturer and end-consumer. Commencing its commercial operations in India, the Amway, instead of selling goods direct to the end-consumer, has floated this multilevel marketing scheme of enrolling members by sponsoring and introduced many intermediaries in the name of distributors, encouraged its members to sell the articles with retail profit of 20 per cent apart from other performance bonuses. In fact, the Amway is not selling the products direct to the end-consumer. The truth is that the consumer cannot purchase products direct from Amway without becoming its distributor.
Let us explore more of its exploitations in the next instalment.
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