1. Multi Level Marketing is a Myth and a modern deceptive marketing way aimed at looting the gullible people with attractive names and false promises. It is a proven wrong “business model” across the world. It is projected as a “great business opportunity” to lure people into joining the schemes that benefit primarily the promoter and a handful of people at the expense of lakhs of people involving thousands of crores of rupees. It is not exactly a “business” in any way except that is a “business” of money for money by money. It is called with various names like Chain business, Network Marketing, Sponsoring Business, Introduction Business, Referral marketing etc.
2. MLM Companies camouflage their real backend “easy and quick” money business activities as sale of goods in the front-end and choose various kinds of high-priced goods like health-care products, household items, gold coins, medicines, land and other commonly unknown products only to divert the attention of and confuse the law enforcing agencies. They violate many an Act like the Vat Act, Income tax Act, Sales Tax Act, Drugs Act, Food Adulteration Act, RNI Act, PCMCS Act besides attracting the penal provisions of IPC.
3. Taking advantage of the absence of any regulatory mechanism at the time of the liberalization of the country’s economy in early 90’s, these con companies have entered into the country and are playing havoc with our social norms, the social fabric, the human relations, the institutions of family and marriage and are encouraging people to use, misuse and abuse official positions and power for “their” financial benefit.
4. These MLM companies claim that they are into direct selling but in real terms they are in neither “selling” of products and nor is theirs a “direct selling” except making money by mere enrollment of members. They create more distributors than customers and every distributor is empowered to enroll infinite number of distributors with out any restrictions and the chain goes endless by making them run after the mirage of big money with the active involvement of brain-washing motivational tools / organizations and mind control tactics. Eg. Of real direct marketing are Milkman, Ryot bazaars, fairs etc
5. These companies are generally called “pyramid” structure schemes across the world and are thrown out by many countries of their respective territories on allegations of resorting to unfair trade practices, siphoning of money and collapsing their economies. For example: China banned in 1998, Sri Lanka in 2005, Singapore , Canada
6. These companies lead our Nation to “economic slavery” and are capable of influencing our political system by infiltrating into our legislatures through their “possessed” distributors whose number is already in tens of lakhs – ultimately questioning our basic sovereignty. Here we may be reminded of the way in our history where in the East India Company of the Britishers entered our country with a business proposition and requesting to “enroll” a few security personnel to guard their products and ultimately captured the political power and ruled us for over two hundred years.
7. While umpteen number of such MLM companies are entering India everyday, the intelligent scoundrels of ingenious indigenous intelligentsia are replicating these models and are sucking away the marrow of financial strength by spreading their tentacles to every nook and corner and even to remote rural areas.
8. The former Hon’ble Union Minister for Urban Development Mr. Jayapal Reddy while initiating a debate on a calling attention motion on these companies (Japan life India & Amway etc) as member of this august house in 2003 called these companies as a nation-wide menace and financial pest and stated that these companies that are banned in their own countries are carrying on business in India with impunity.
9. Further more, the former Honorable Speaker of this house Mr. Somnadh Chatterjee, way back in 1982 itself exposed the deceptive practices of these money Circulation companies as the counsel of the State of West Bengal in the case involving state of West Bengal and Swapna Kumar Guha before Supreme Court of India
10.A Division bench of the Andhra Pradesh High Court has in 2007 in a case involving the self styled world leader of all MLM companies namely “Amway” held that its business is illegal. The Supreme Court of India
11. It is very much within our knowledge while a bill banning the activities of all these MLM and Pyramid Structure companies is being contemplated by the government, a powerful lobby of promoters of such companies is said to be working to stall the same. Hence we request directing various enforcing agencies to plunge into action for fathoming the depths of financial atrocities commited by these companies early as possible to save the gullible and hapless people of this country from being looted by these companies.
12. The Promoters of the MLMs know fully well that the schemes are a “Mathematical impossibility”, impracticable and unworkable and can work only for some time benefitting only handful of early birds at the expense of scores of people.
13. The MLM companies abuse the process of law for a protracted litigation as there is no collective and coordinated effort from the law enforcing agencies.