MLM companies continue to cheat consumers

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The Enforcement Directorate (ED) raided the office of the Amway India Enterprises Private Limited, involved in cheating people in the name of multi level marketing and seized its assets worth Rs 757.77 crore on April 17.

Multi Level marketing (MLM) is a business model that involves unsalaried, hierarchical sales teams selling products directly to consumers in conjunction with recruiting additional company sales representatives. It is a referral marketing or network marketing. In contrast to traditional direct sales, where sales representatives are employed by a company, the multi-level marketing model uses freelancers.

The Amway entered India in 1998. Its 5.5 lakh distributors are functioning all over India today. This company swindled lakhs of Indians between 1998 and 2022 by presenting them a rosy picture of the products of different varieties, including the foreign products. However the company escaped action by authorities earlier. But eventually it came in the net of the ED.

There are many such multi level marketing companies operating unauthorisedly in India. These companies cheat consumers in the name of multi level marketing, pyramid scheme, referral marketing, network marketing, chain system. Such cheating was going on for the last several years. Eventually the Union Government banned the multi level marketing under the Consumer Protection Act 2021 on December 21,2021.

However the activities of such companies have continued and the consumers are being cheated. The authorities are keeping mum and instead of the act serving as a deterrent, such companies are flourishing.

As the action has been taken against the Amway, the action should be taken against other firms engaged in similar activities like Oriflmae, Modicare, MI Lifestyle, Tupperware, Healthlife, Vestige, IMC and RCM, Herbalife and they should be banned.

Some of the companies accused of cheating the consumers in the name of multi-level marketing are:

Amway, Modicare, Herbalife, Oriflame, Tupperware, RCM, IMC, Vestige, Forever Living, DXN, NASWIZ, AVON, CAN, Ambit Energy, Dewsoft Overseas, Blulife, Pampered Chef,

Nu Skin, Belcorp, Mary Kay, Natura, Shaklee, Party Lite, Jewels By Park Lane

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