MLM Scams

Grapes are sour indeed I get it but then I am not writing this post just because I got conned but as a cautionary post for all those people who are planning to join these sorts of marketing companies. A long post with couple of videos and i hope it does help to people out there.

A friend of mine was minting tons of money working for a network marketing company but then I was totally in dark to the nature of the business. I was in between jobs and I questioned him about his business for which he was evasive in his answers and he stated it would be better if I get to know it in person. He arranged for a meet with one of his seniors in the business and during the meet I was told that the business is an ecommerce business and with minimal efforts I would be able to get high returns however I would have to invest Rs 3 lacs to join the business as an independent representative. I diplomatically withdrew from joining the business as I did not know the product that needs to be marketed. Fast forward couple of years later I get a call from my friend stating that he has put up the initial amount required to be paid to join the business and the same can be returned once the business grows. So unwittingly I got lured into a MLM business and on attending the initiation program all the new entrants were briefed of the business and the name of the company is QNET. It was drummed into each one of us to enrol new members and thereby increase ones earning potential as more the number of people you are able to enrol and in turn those persons further enrol persons thereby forming a pyramid with you on a mini peak. Also we were told that we need to attend to weekly meetings that is known as a system wherein various persons in this business gave speeches of their glorious success in the business and what they have achieved so far materialistically..be it house or a car or lavish vacations and so forth. The scheme is to get a minimum of two direct referrals that would be placed on the left and right side under me and so forth.

Just to make you understand the scheme think that you are able to recruit two persons under you and they both recruit two each under them and those four recruit two persons each under them and so forth and then you will be surprised to see the number of persons under you directly.   Commissions are paid for bringing direct referrals and also from the sale of products by you or any person under you and if all the persons under you perform then the amount of money you make as commissions is mind boggling indeed. 

Though an iota of doubt kept lingering in my mind but the greed factor in me made me take the plunge into the scheme and as said I added my wife as my first direct referral by paying a sum of Rs 3 lacs ... greed of getting back in multiple lacs. Well my commission for the first direct referral was Rs 30,000.00 and some commissions due to product buying by persons in the chain on one side to the tune of Rs 40,000.00. Now to increase the commissions I need to bring in new people and it is generally from the circle of friends and relatives I have but then most of my friends are common friend of person who inducted me so I could not find anyone willing to put up the money and also none of my relatives were interested in the scheme so i finally ended with just one person on my left... my wife and none below my wife for i needed to market for her also. I realised this business is not for me within 4 months of joining QNET

Now that realization I started sending out messages to my friend to sell my stake and my wife’s stake for which my friend said he would do so but after a year of me joining the scheme. Well it has been almost two years now and there is no talk of selling my stake... response to email does not come or vague whatsapp messages with no relevance to my request. I have now reconciled that i have lost part of the money I had invested on behalf of my wife since I withdrew the commissions in the account.

For persons not aware of these types of companies here is a brief explanation - Multi level marketing aka MLM is a marketing strategy to promote companies products through independent distributors and give multi level compensations, MLM companies are legal operation as there are products that is being sold. Some of the quite famous and well known MLM companies in India are Tupperware, Oriflame, Avon, Amway, Herbal life. In these companies people are recruited as distributors by persons who are already a distributor and a person having more number of distributors under them earns more compensation by way of commissions. As a distributor one need to have sufficient stock of products for which they would have to pay upfront and the commissions are paid in multi levels in varying percentages right up till the top of the chain

But then many pyramid schemes disguise themselves a MLM companies and the whole operation works on basis of bringing in new investors who in turn are the source of commissions to the persons in the higher levels of the pyramid. QNET is one such company that operates as a direct selling company utilising the loopholes in the guidelines set by the government but the fact remains the company is operating a pyramid scheme. The products mentioned in the company portal is to be bought by the members regularly to maintain their status so as to receive commissions and is not sold to general public. I am sure that these products will not sell in open market for they are so much overpriced and useless. Their main source of income is to con and get new members to join the scheme

Authorities are waking up to various complaints against QNET and early this year Hyderabad police arrested 58 persons from 4 states ..see the news report in this regard News Report of arrests of QNET independent representatives.

Saudi government during September last year termed QNET pyramid scheme as haram and has banned its operation. Immediately afterwards QNET which has planned a Vcon at Dubai was cancelled for fear of arrests. See a video by one Loy Machedo which does give in depth explaination of MLM scams in UAE  Video link of MLM scams

Beware folks do not join the scheme however rosy picture is painted to you by your close friend or relative for if you do you would lose out your investment as you are in the bottom of the pyramid at this point of time. For you to reach the higher levels of the pyramid you would need to induct your close friends or relative and I am sure you would lose out on their relationship.

Be cautious and be safe.

Your comments and experiences can be shared in the comment column.