Govt asks states to ban multi-level marketing schemes

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Ban companies which offer monetary benefits to subscriber for enrolling members: Govt  (Reuters) Ban companies which offer monetary benefits to subscriber for enrolling members: Govt (Reuters)
SummaryBan companies which offer monetary benefits to subscriber for enrolling members: Govt

and home and regulators including the RBI and Sebi have already conveyed that they don’t look into the matters concerning MLMs.

Earlier, in India, MLMs such as Pinnacle Education and Opportunity Ltd, Gurudev Travel Connection, City Limousine and Kanakdhara Gold have been probed for alleged frauds.

Ponzi schemes

* After the case of alleged fraud by SpeakAsia Online, the government started the process of reining in companies which offered impossibly high returns in a short span

* An inter-ministerial committee suggested setting up of a central agency to oversee MLM schemes and proposed to filter and block websites above a certain number of subscribers

* Companies will not be allowed to run a scheme with a compensation plan in which the subscribers would have to enroll minimum number of subscribers to become entitled to monetary benefits

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