Beware of MLM Companies – Saddening Truth of MLM Scam – Your One Mistake of Considering It As Opportunity Can Take You Down

August 8, 2018

What is MLM?

Multi-level marketing is also called as pyramid selling or network advertising. By now you might have understood, what exactly MLM is. We all must have met a member of MLM companies, who would have insisted you to join their group/company and make chain of customers to sell their products/services.

You are asked to refer your friends and family who are willing to purchase their products/services. There are many companies, who are working in this model of multi-level marketing. In this post you will get to know the saddening truth of these companies.

MLM Companies Mainly Target Helpless People

These types of pyramid selling are illegal and are based on taking advantage of the helpless people, who are need of money. People, who are searching for jobs, or, who wants to earn money by sitting at home, are the main targets of such fraud companies. It is all about taking advantage of your friends and relatives.

What is Ponzi Scheme?

There are many MLM companies, who are represented as Ponzi scheme. Let us first understand what is ponzi scheme. This is scam in which a easy-to-target people are attracted towards lucrative schemes of making money. They are being promised to get very high returns in very short span of time. Scheme is based on paying off the early ‘investors’ from the cash from new ‘investors.’

The strategy of Ponzi scheme is to earn the illegal profit by conducting the fraud.

This structure of fraud scheme gets collapsed when the cash outflow exceeds the cash inflow. The initiators of such schemes usually take away all your money and get disappeared after they have taken away all your hard earned money.



Did You Know?

  1. Ponzi scheme is named after Charles Ponzi, who ran away by taking huge amount of 15 million in 1919-20. He was an Italian immigrant.

  2. This was the first ponzi scam that came into notice in the World. More than 40,000 eager people have given their hard earned money in the dream of getting huge returns within 90 days.

Some Common Ponzi Schemes of India

  1. Sahara group

The founder of Sahara group Subrata Roy was accused of duping investors of some $5.4 billion. Sahara channelized an investment option wherein the investors had deposited money in schemes launched by the Sahara India Real Estate Corp Ltd and Sahara Housing Investment Corp Ltd, which was illegal according to SEBI. The Supreme Court of India issued a non-bailable arrest warrant against Subrata Roy.

  1. Saradha Group Scam

This scam of 2013 involves more than 1.7 million investors of a Ponzi scheme. This collapsed and lost US $ 5 billion which were collected by issuing redeemable bonds and secured debentures and promising incredulously high profits from reasonable investments. The officials had attached properties worth INR 1500 crore out of INR 2500 crore.

  1. Speak Asia

It was another multi crore scam carried away by three musketeers. one of the three masterminds behind a Rs 2,200 crore online marketing fraud, was arrested by the Delhi crime branch on Tuesday. Pal, 37, and his associates duped at least 24 lakh investors in the scam extending to Singapore, Italy and Brazil among others.

  1. PACL

The founder of PACL Ltd was arrested by CBI for the alleged collection of about INR. 450 million from around 55 million investors across the country.

  1. Golden Forest

It was another biggest scam of India of 90’s, which fled away with Rs 45,000 crore of innocent people.

How can you lodge FIR against them?

As per the laws, the fine decided by the government of India for conducting such crimes is of around Rs 50 crores. Beside this, the culprit will also be sentenced up to 10 years.

If you are a part of any of the above such schemes, then you must immediately take the help of corps. Visit your nearest police station immediately and file a FIR against them. Also carry all the related documents or any other payment slip that you received from them for proof.


Where You Must Invest Your Money?

If you are looking forward to get good returns by investing your money then you must definitely invest in stock market. Although there is risk of loss, but at least you do not feel cheated in this case. Investing in stock market with the help of technical analysts or advisory firms like Money Classic Research will definitely make you book huge profits.



About nehanchal

I am Nehanchal. 3 years ago, I started my career as content writer at Money classic Research. I am fascinated with this job and I feel habit of reading and writing enhances your skills. I love to write technical and health blogs. However, I am engineer turned writer and pursued graduation at Rajiv Gandhi Prodyogiki Vishwavidhyalaya.
By: nehanchal

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