MLM News

Tag: mlm scam

  • RBI Notification on Forex Trading

    This is the press release from Reserve Bank Of India, in this press release RBI has warned people who are involved in Overseas and domestic Forex Trading. RBI has stated that under Foreign Exchange Management Act, FEMA, 1999 do not permit residents of India to trade in foreign exchange in domestic/overseas markets. (more…)

  • Police bust MLM racket in Bangladesh

    Police bust MLM racket
    The Jakarta Post | Wed, 03/30/2011 9:53 AM |

    Balikpapan Police in East Kalimantan have arrested a woman for fraud after she allegedly tricked members of the public into investing money in a multilevel marketing (MLM) business, promising huge profits.
    The get-rich-quick scheme left at least 47 Balikpapan residents of pocket after they invested a total of Rp 35 billion.

    Police began investigating the case “after receiving reports from victims,” Balikpapan Police chief Sr. Adj. Comr. A Rafik said Wednesday, as quoted by tempointeraktif.com.

    The alleged fraudster, Ade Farida, proposed victims invest in the MLM scheme selling Milo energy drink, he said.

    “[By investing] Rp 8.4 million, they were promised profits of Rp 1 million in 10 days,” Ade said.

    One of the victims, Dwi, said the scheme had run smoothly for almost a year. But victims had stopped receiving profits since January this year.

    Police said the number of victims could grow since the alleged fraud had been going on for almost a year.

    “Anyone who has fallen a victim [to this fraud] can report to Balikpapan Police,” Rafik said.

    Ade has denied the police accusations of fraud, and said she was just another victim of the main actor, Nadir, who she said had fled to Situbondo, East Java.

  • Beware! Shady chit funds strike in new guise

    Saibal Sen, TNN, Apr 5, 2011, 03.16am IST

    KOLKATA: Illegal chit funds, a scourge in West Bengal, are back in a sneaky new disguise. Multi-level marketing firms are now luring unsuspecting depositors with promises of mammoth returns in the form of “products”. The booty, according to central and state authorities, runs into crores. What’s worse, the victims have no recourse. Even police give them no hope.

    The few cases registered in South 24-Parganas and Nadia which have since been “referred” to CID have startling implications. Ninety depositors together lost close to `3 crore through one such scam, says a case being investigated by Sonarpur (South 24-Parganas) police (FIR No 87/2011). A similar case is being probed by Kalyani police (FIR No. 176/2011). In both cases, former government employees seemed to be the target. They invested their entire retirement benefits hoping for bonanza returns.

    Huge as the scam already seems, it is only the tip of the iceberg, say sources.

    Take the example of Sukumar Mahapatra, a former joint secretary (education). Running from pillar to post to get a complaint lodged and then get police act on it Mahapatra is exasperated. “I know there is little chance of getting back the `25 lakh I lost. At least police should try to put an end to this menace,” he said. “Moreover, if the victims are spread over the entire state, it does not make sense for local police to investigate. It should be probed by CID. But they are simply sitting over the complaints, emboldening the fraudsters,” he said.

    Mahapatra’s son Sagnik who runs a web-development company in Jadavpur first fell into the trap. Investing in such a firm, he got his returns in the first few months. This spurred Sagnik’s mother an entrepreneur herself to invest in it. It was only sometime later that they realised the fraud. The first cheque of their returns bounced. They lodged a complaint.

    Not everyone has gone to the police, though. A Krishnagar court upper-division clerk, who refused to be named, has lost `15 lakh his entire retirement benefits to the same MLM firm as Mahapatra’s kin. “There are 90 such victims, but not all are willing to come forward. In some cases, there is no basis on which the complaint can be lodged. The deal was done on the basis of mutual trust. They’ve always paid in cash and have not retained receipts for the payments made,” Mahapatra said.

    The modus operandi of these MLM firms is simple. The RBI, in an advisory sent to banks, says that the depositors usually make small cash deposits in accounts opened in several banks across the country. These funds, “running into crores” according to RBI, “were being pooled at the “principal accounts” of the MLM firms and the funds were eventually flowing out of the principal accounts for purposes apparently illegal or highly risky”.

    RBI was first alerted to this modus operandi by the Orissa Crime Branch CID in 2009. The RBI says these firms managed to get a large number of bank cheque books by way of opening accounts. The MLM firms in turn issue post-dated cheques for small amounts to depositors. “People were depositing the money in the accounts of MLMs in places far away from where the accounts were actually opened. This was facilitated by the Core Banking Solution ( CBS) offered by the banks.

    These go bust invariably. “The operations of these firms are essentially deposit-taking activities involving unusually high returns, the ongoing repayments of interest and deposit amounts in respect of existing deposits would depend on continuous and uninterrupted flow of fresh deposits with increasing volumes. Therefore, at some stage, the flow of deposits is bound to slow down and post-dated cheques tendered thereafter would bounce, due to inadequate funds available in the accounts,” RBI wrote to all banks on September 16, 2009.

    The income tax department had also stumbled upon a similar MLM firm in January, 2011, run by three individuals based in Asansol. The I-T raids led to the seizure of cash, bank drafts and fixed deposits to the tune of 12.57 crore and detection of unaccounted income to the tune of150 crore. The IT disclosure also revealed another aspect these firms had appointed agents who enroll poor villagers in West Bengal, Orissa and adjoining areas for these schemes, promising returns between 12-15%. “In our case, one so-called agent, Saibal Ghosh, has himself lost several lakhs,” said Mahapatra.

    On December 23, 2009, the state assembly unanimously passed the West Bengal Protection of Interest of Depositors in Financial Institutions Bill, 2009, which now awaits Presidential assent to be a law. The Bill envisages a life-term for all convicts.

     

    To Your Success in Business & Health in Life,

     Ak Sharma
    Editor,
    You can reach me at [email protected] or connect with me on Facebook

  • Speak Asia given court notice at Gorakhpur, Uttar Pradesh

    Gorakhpur: Online Survey Company Speak Asia online has sought delay from city magistrate on Thursday. City magistrates on Thursday arrived in the office of Regional Manager Anurag Corporation to meet him. Meanwhile, City Magistrate has served them with another notice with ten points and instructed to give their answer by Friday. (more…)

  • How to avoid scam in MLM

    Know you company in Network marketing (MLM)

    Banking sector in India has initiated ‘KNOW YOU COUSTOMER FIRST’, why can’t we do the same in Multi-Level Marketing (MLM). I have come across many networkers who are interested only in companies, who are doing ethical business, for some it does not really matters; they are interested only in quick money. Some in Network Marketing business question, the whole concept of ethics in MLM.Do ethics still exist in today’s competitive market? Where everyone is in the league of cut throat business. I would say yes, it is not for how long that company remained in the market, keeping ethics forefront and collapsed after some time.

    Question is, when an MLM company collapses, the people who joined at the bottom, feels cheated. Mostly the reason, why an MLM company collapsed is due to these reasons:-

    • Distributing more money to associates than actually collecting.
    • Business plans sound very lucrative, but for longer run, it cannot sustain.
    • New joining rate is very slow; companies with sound business plan needs a minimum joining rate in a month to sustain.
    • Are they following ethics and business conduct in case of fraud done by an associate?
    • Check their registration, whether they are registered in your country.
    • Are they registered with DSA & DSAI; it’s always better, but not mandatory.
    • Know the intentions of people who are running the company.
    • If you find anything suspicious, get it verified independently, rather by your uplines.
    • Check it on Google, like type your company name and scam eg, (company + scam)
    • Talk to top achievers, figure out what they are upto.

    Everyone in this business has good potential, but every time after some time joining a new mlm company and then creating a team is a daunting talk, be careful about your company.  It’s better to be a slow learner, but take your steps wisely.

    Share about your MLM company in the comment section.

    To Your Success in Business & Health in Life,

     Ak Sharma
    Editor,
    You can reach me at [email protected] or connect with me on Facebook

  • How to keep you safe from MLM scams

    Some consider that there are legitimate Network marketing companies which have good MLM business plans that last for long and along with them every year we see scammers in MLM come up with tailored made plans to cheat people. It has not been long, few years ago; someone came up with non-working or growth plan. The business plan offered, the earlier you join, the faster you will make money, of course that is true in MLM but the catch was that we do not have to work at all and in one year’s time their invested amount will turn into 100 times, I wish government could offer such a scheme, but never the less people lost their money. Reason, either the investor was illiterate or he got scammed or he got carried away, after seeing someone from “rags to riches”.

    The irony of the story is that, still there are people who are putting their hard earned money into such schemes. In past 4-5 years people have been cheated to the tune of hundreds & thousands of crore in India itself, but respite all this, the government is not taking steps to regulate network marketing . Though we have THE CHIT FUNDS ACT 1982, which is not enough to tackle present menace or may be the government has better things to take care like 2G scam, CWG scam, Adarsh scam etc.

    Let me share with you how we can identify an MLM scam

    • Duplication is must, without duplication a network marketing company cannot survive.
    • If company offers you that without working, without referring, still you will get returns on investment.
    • Say if you investing ‘x’ amount, by the end of year, company offers you 10 times of x.
    • Never get carried away, if the business plan sounds unbelievable.
    • Credentials of people, who are running the company, check their past records.
    • Don’t get carried away with the pomp & show.
    • Do not get carried away with the exorbitant money shown on a piece of a paper.
    • Check their registration papers; in India it is called Incorporation Certificate.
    • FOREX trading is banned in India, check with your local bank.
    • Do research on company profile over the internet; if you see that company has cheated someone then do talk to them, analyze and then decide.

    To Your Success in Business & Health in Life,

     Ak Sharma
    Editor,
    You can reach me at [email protected] or connect with me on Facebook

     

  • Bangladesh MLM alliance calls for regulation of MLM

    Due to a combination of government policy, the time required for a thorough investigation to be carried out and the inevitable appeals process, it’s all too well known that there’s often a large disconnect of time between the establishment of an MLM company, and a regulatory body investigating it.

    At the heart of a scam MLM is the principle of extracting as much money from unsuspecting victims, in the least amount of time possible. And when you combine this with a long delay in the investigation process, a lot of people can be taken for a ride and driven to financial ruin in the meantime.

    One group of MLM companies in Bangladesh sought to address this problem and have called upon the government to regulate the MLM industry.

    According to Joint Stock Companies and Firms registrar, some 70 MLM companies are operating in the country.

    Nearly two-thirds of them are involved in banking, which is illegal. The rest offers a very few products.

    From the sounds of it, regulation, whether proactive or reactive in Bangladesh is pretty slow and the country appears to be overrun with get rich quick MLM schemes.

    Gazi Md Zakir Hossen, chief executive officer of Uptrend Distribution Ltd (known as uptrend2u) ‘points fingers at unipay2u, TVI Express, Visa Ray, Speak Asia, Legend Venture, Unigateway, Goldtrend, Neway and Destiny-2000 Ltd‘.

    TVI Express I’m well aware of but the other companies I’ve never heard of. Presumably they are similar ‘no product’ MLM clones of TVI that operate on a fast revolving, recruitment driven matrix.

    Fed up with companies named above tarnishing the MLM industry name in Bangladesh and eroding consumer confidence,

    a section of MLM companies at a press briefing yesterday requested the government to take action against those involved in illegal banking in the name of MLM.This group claims multilevel marketing doesn’t allow banking, and it must be product-based. This means profit will come from selling products.

    Why this hasn’t happened before or why it hasn’t happened in other countries is a mystery to me, but good on them. Ultimately without a product all you’re doing is shifting money in some way or another and unfortunately it can take regulators months, even years to crack down on this activity.

    If I was running a legitimate MLM company it would cause me no end of frustration to hear about scam MLM companies bursting into the market with largely unsustainable compensation plans.

    I do know that MLM industry alliances and associations exist outside of Bangladesh, but it’s rare to actually hear them speak out against other companies in the industry.

    Personally I think it’s high time they did.

     

    To Your Success in Business & Health in Life,

     Ak Sharma
    Editor,
    You can reach me at [email protected] or connect with me on Facebook

  • MLM scam: One more held at AHMEDABAD



    AHMEDABAD: Bapunagar police made the third arrest in the multi-level marketing scam where four brothers and their relatives duped people of over Rs 20 crore.

    According to city police, Alpesh Vasoya, one of the brothers, was arrested from CTM crossroads on Monday afternoon. “He had come from Vadodara in a bus and was looking for a transport when a team nabbed him. As per his confession, he had fled to Mumbai and was constantly changing location to evade arrest,” police said.

    R D Lashkari, inspector of Bapunagar, told TOI that Alpesh is a financial wizard who handled the money of the enterprise. “We are now trying to get the details of the accounts. Earlier, we had nabbed Rakesh and Hitesh Vasoya in the case. The brothers were wanted in a multi-level marketing scam of 2008 where hundreds were duped by the gang,” he said.

    Officials said that the Vasoya brothers had started Sai Mitra Mandal in Bapunagar. They had floated a scheme where every member would get prizes ranging from phones to cars every month with a fixed amount deposited every month.

     

  • Man held for Rs 100 cr fraud in Delhi


    JAIPUR: A man accused of duping people of nearly Rs 100 crore through his multi-level marketing company was arrested by the Jalupura police on Friday. On the basis of mobile surveillance, a team nabbed him in New Delhi.

    According to deputy commissioner of police (north) Ashok Naruka, the accused Jitendra Saithwal is a resident of New Delhi.

    One Minakshi Singh had registered an FIR against Jitendra and three others on January 10 with the Jalupura police station. The accused ran a multi-level marketing company called Arya Roop Tourism and Club Resorts.

    “She alleged that she had added 450 people in a chain system and deposited Rs 6.75 crore in the company’s bank account on the assurance of good returns,” said Naruka.

    Several others had also deposited money from other parts of the city and state. The cops estimate the total deposit to be nearly Rs 100 crore. After some time, Jitendra and his partners disappeared with the money.

    The search for the other accused is on, police said.

     

    Source TOI

  • Is it possible to grow 1 Lakh into 5 Lakh in 12 months?

    Published: Wednesday, Feb 16, 2011, 15:25 IST

    By Himansh Dhomse | Place: Ahmedabad | Agency: DNA

    Remember the 2008 US recession that left the world in an unprecedented financial crisis? At the root of it were several Ponzi schemes that eventually went phut and plagued the US economy impacting global economy.It seems that even Ahmedabad might be having its own share of Ponzi schemes. Bankers claim fraudulent financiers are duping investors.And there are fears that at some point, like the MLM (multi-level-marketing) scams, these too sink fortunes of lakhs of common people in the city. We examine whether the ‘Takewali companies’ are a smart way to get rich or a trap.

    Imagine investing Rs1 lakh in an ‘investment scheme’ which returns Rs2 lakh after 6 months. Or how about forking out just Rs3,000 in another ‘one-time investment, 50-month scheme’, and receive cumulative returns like Rs1,000 at the end of fourth month, Rs2,000 at the end of tenth month, Rs4,000 in the 15th month and so on… finally to receive Rs5,12,000 in the 50th month!

    The total payout amount in this ‘scheme’ is eye-popping Rs10,23,000. Or how about ‘investing’ Rs1 lakh and reap a ‘profit’ of Rs5,35,000 at the end of 12th months? Not sure you can stomach the risk?What’s more, no ifs and buts, these are guaranteed returns.On an average, these firms give anywhere in the range of 9% – 25% return on investment per month — this at a time when banks are struggling to give 8% annual return on fixed investment.

    Tempted to ‘invest’, aren’t you? You’ll be joining the league of over lakhs of such ‘investors’ from all over Gujarat, mainly Ahmedabad, who have parked their money with such ‘investment firms’.Some 34-35 of such firms have cropped up in Muslim ghetto areas like Jamalpur, Juhapura, Astodia, Sarkhej, Shah-e-Alam etc and this number keeps multiplying every week.

    As several thousands of investors have received the promised returns over the past few months, these investment schemes have become immensely popular and it is now difficult to find a household that has not parked at least some funds.Sources confide even well-placed educated families are known to have invested. In many areasthe distributors, so called agents of these companies, market their schemes. For investors, the distributor is the only face of the company.

    But every month, the agent comes to home of the investor to deliver the cheque which is the 10% return per month.“We have branch in Juhapura where people have been withdrawing money to invest in such schemes. I was shocked to hear about such scheme which is offering return of 10% per month on investments,” said zonal manager of Bank of India, BB Joshi.

    According to Joshi, few months back, it was difficult for banks to give even 10% return per annum and for doubling the investment it takes eight to nine years.“While in these schemes, these companies are giving 10% return per month and doubling the investment in just 10 months. It is impossible. It has to be a scam or fraud which people will realise soon,” said Joshi.