The truth about Networking & Multi Level Marketing ventures: Greed…plain greed all the way

Lai Loyumba
(This article was written and sent to various newspapers about 3 years ago at the height of networking & MLM but pity nobody published it or else it may have helped saved at least some people from these financial scams, broken homes & broken dreams)
Picture this scenario… in the outskirts of Imphal a girl of 7-6 yrs, in tattered clothes with a small oil stained plastic bottle clutched in one hand and a ten rupee note in the other hand, coming to the dilapidated local grocer to buy mustard oil for Rs. 5 and ngari for Rs. 4 and Re. 1 for her bubble gum. But going to her house it may turn out to be no surprise if they happen to use a tooth paste tube costing more than Rs. 120/- made by a multi level marketing (MLM) company, wash utensils with a solution costing more than Rs. 200. All these and much much more when most of them are not sure from where their next meal will come from.

The newspapers and magazines in the metropolises as well as the small towns are flooded with lines like these “Earn Rs. 30,000 to 50,000 a month, work from your home, no qualification needed. Call Preity/ Rahul at 9860000000” enticing and alluring more and more unsuspecting prey.

Ever seen those people in ill fitting suits and shabbily tied ties on Sundays and holidays congregating in stadia and halls across the length and breadth of this poor country with a glint in their eyes like those of possessed people. This is simply mass hypnosis triggering a mass hysteria.

Ever heard the refrain -what do you want from life? What are you missing in your life? Are you satisfied with your job and how much money you’re getting? Promises of an easy and considerable sum as income sound so alluring as also the added world tour while working at your own pace, why Mr. so and so from your locality has left his job and became a fulltime runner or is it distributor(hic ! so confusing) Mrs. X has gone so many times to foreign lands courtesy this organization.

There are so many of them…Amway, Conybio, DXN, Herbalife, Avon, Oriflame, Aviance, FreeIndia concepts, RCM etc. etc. They come in all shape and sizes and in a myriad number of hues. Under their skin they are all the same except for a little difference here a difference there. Such easy and get rich quick schemes, have struck root in our society exploiting the basic human trait…greed. For every sane voice there are 10 who are ready to fall into this trap. Many have sank their savings while others have landed up with broken families, worse still some have paid with their lives believing in the cure-all, magic potion like qualities of their products and ignoring doctors orders for their diabetes, hypertension, cancers. Doctors too are not beyond reproach as some of them have flouted all ethics and jumped into this bandwagon and are prescribing this magic potions to their gullible patients, woe to them and their ilk. Why prescribe vitamin c tablets costing more than Rs. 15 when the same is available from leading pharma brands for less than Re.1, even eating a heikru (gooseberry) is much better. Same is the case with calcium, ginseng and many other products. Amways nutrilite ginseng tablet cost Rs 2300 for a pack of 100 tablets amounting to a whopping Rs. 23 per tablet after giving it some exotic name like Siberian ginseng while the original Panax ginseng imported by leading pharmaceuticals like Ranbaxy are available for around Rs. 7 per capsule.
The greatest irony is that Amway is forcing the poor citizens who otherwise find it hard to have a roof over their heads let alone own a car to buy car wash which cost more than Rs. 250 per bottle. Do they expect them to drink car wash?

In the case of Herbalife, you pay about Rs.4000 per person to either gain or lose weight, which is even more than the whole month’s expenditure of a middle class kitchen of around 4 persons. It is even more than two times the monthly salary of a private school teacher. Forget third world countries like us it is even on the costlier side for the developed western world. Their motto “Lose weight now, ask me how” should better read “Lose wealth now, ask me how”

So how come you earn quick? You form a team below you who in turn form a team below them and it goes on. And you get a share from what business they do. Sounds a little confusing. But whatever, they claim that you can earn so much that you can resign your regular job and do MLM full time. And many fall for this ploy. I have known many a people who unable to sell these products use it themselves.

The tag line they use for these products is that the “quality is superior; you don’t get it in shops”. May be true then may not be. People are willing to spend now…the ball pen made the revolution but does everyone have the selling ability and is it wise to take up this business as an alternative to you regular job?

JIT, FOREX. UNIPAY, VISAREV…when the going was good, those of us who did not join into the bandwagon were made to look like fools, even our wifes started complaining why we did not join so and such network and get rich quick like tomba, chaoba, ibethoi…why even so and so doctor, MLA and chief engineer are raking in moolahs. Now what happened…these companies just fed on one basic drive of humans…greed just plain greed nothing else. Its all boil down to something called the PONZI scheme, just google it or visit http://en.wikipedia.org/wiki/Ponzi_scheme and the secret will be unravelled(sic…everyone of those investors seemingly know the net these days waiting for another date set by these companies, a la waiting for Godot)
An excerpt from Wikipedia “A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.

The system is destined to collapse because the earnings, if any, are less than the payments to investors. Usually, the scheme is interrupted by legal authorities before it collapses because a Ponzi scheme is suspected or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases. While the system eventually will collapse under its own weight, the example of Bernard Madoff’s investment scandal demonstrates the ability of a Ponzi scheme to delude both individual and institutional investors as well as securities authorities for long periods: Madoff’s variant of the Ponzi scheme stands as the largest financial investor fraud committed by a single person in history. Prosecutors estimate losses at Madoff’s hand totaling roughly $21 billion, as estimated by the money invested by his victims. If the promised returns are added, the losses amount to $64.8 billion, but a New York court dismissed this estimation method during the Madoff trial.

Coming back to Manipur…it’s a classic Ponzi, first you entice a few with very regular payments from Unipay then float another company Visarev.The people already bedazzled by the earlier scheme came in troves that’s when the squeeze came, classic and it could have succeded so well only in our state Manipur. It’s mostly in our state that people want to get rich quick…damn quick not even pondering to check out the status of the company where you are investing thousands and lakhs of rupees. In other states people do think twice if a company or organization is offering astronomical returns for their investment but the gullible people of our state seemed to be tricked time and again…remember “Golden forests” of yore. The present scams have made our state poorer by about Rs.1500 crores according to modest estimates, maybe even more. This is going to impact us more than the our wars with Burma and the subsequent seven years devastation!!!

Our state which already has a bleak future due to the law and order and lack of development has been looted again and again by such nefarious networks/ companies making our economy poorer and poorer. We will not be victims of such scams if we remember two simple quotes “ All that glitter is not gold” and the other being “ Work is worship”. Lets forget the dreams of being rich without doing any work and one also need to just keep one’s eyes and ears open to witness such heart rending stories.

This article is intended to make the citizens of my poor state think, yes… think and decide. There will be many angry rebuttals to this article, but I don’t have the time and the inclination to reply to them, I am just urging my brethren to at least start thinking, keep their eyes open and do what they think is best.
Lai Loyumba
Khwai Lalambung Makhong, Imphal


Anil Kumar

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