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.