* credit to laurence82 for typing out these reports from the
ST.
I ma writing to raise awareness of teh recent rise of multi-level
marketing firms that may engage in underhand or even illegal
tactics.
Several weeks ago, I attended a seminar on multi-level marketing in
Shenton Way. During the seminar, the audience, mostly teenagers,
were subject to what could be tremed 'brainwashing'.
They were inundated with fantastic claims of paths to riches, using
a gimmicky prsentation style which involved loud cheering and
enthusiastic clapping from staff. At the end of the seminar, which
focused almost exclusively on the cost of livingand how the company
can help one achieve one's dreams of material well-being, I was
left bewildered. Thre was absolutely no mention of teh product they
were selling.
When I questioned this, I was told: "Does the product really
matter? I could go on and on about the benefits of aromatheraphy,
but what is important here is our marketing technique."
As it turned out, this marketing technique closely resembles
pyramid selling. To join the scheme, you pay a fee to buy an
aromatheraphy product. For each person you sell more products to,
you receive a commission. And for each sale, the person who got you
to join the scheme receives the same commission.
The chain continues ,with more people pulled into the scheme, and
those on top getting rich quick.
What is suspicious is first, the focus is on the sales method
rather than the product. Second, they seem too eager to impress the
audience and the potential customers with flashy presenters and
pushy marketing.
Third, the commission structure is strange, to say the least. The
commission is the same for the person who sells the product, and
the person above him in the chain. This means those higher in the
chain can simply live off the fruits of others labour. It
encourages continuous selling until there is no one left to sell
to.
I hope to draw attention to such schemes as the amounts involved
are not small and those who join later will definitely be left
disappointed.
As such scheme proliferate, I hope the authorities can clarify what
is legal and take action against any perpetrators who are engaged
in illegal activities.
Leow Zi Xiang
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Straits Times Forum, Jan 1 2003
Beware of hard-sell tactics
I refer to Mr Leow Zixiang's letter, 'Dangers of multi-level
marketing' (ST, Dec 30).
I was recently persuaded by a friend to go for a talk about a
"business plan". It turned out to be a talk by an MLM company. Like
Mr Leow, I was told it was the 'business plan', and not the
product, that was important.
I succumbed to the pressure from the sales representatives and paid
$864 to start three accounts and to buy some aromatheraphy
products.
I was taught the methods they use to get prospective members to
join the scheme, which include:
a) Never telling the 'prospect' that it is an MLM scheme. Just say
it is a business plan.
b) Not letting the 'prospect' go home and 'think about it', as he
is likely to have second thoughts.
I felt cheated as these tactics were used on me and I was now
expected to use them on others.
I demanded a full refund but was told this was possible only if
someone else come and took over my account.
I wish to alert the public about such hard-sell techniques. I
advise those who are easily persuaded to stand their ground and
join only when they thoroughly understand what the company is
offering.
Lim Jia Qing
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Straits Times Forum, Jan 5 2003
One more victims of sales scheme
I refer to Mr Lim Jia Qing's letter , 'Beware of hard-sell tactics'
(ST Jan 1). Like him, I paid $864 for three accounts and I am sure
that we fell prey to the same multi-level marketing (MLM)
firm.
In one meeting I had with its representatives, the firm arranged
for three people to turn up, evidently to try to intimidate me.
They were willing to drive me to the nearest ATM at 1 am to make
sure I did not back out.
A week later, when I asked for my money back due to financial
difficulties, they laughed and said the only way out was to get
someone to take my account.
I have since realised I have been cheated. Can I lodge a police
report about it?
The start up cost in this scheme is unreasonable for the amount of
products paid for. The aromatheraphy products are also not
described clearly in presentations and on the company's
website.
I hope the Direct Selling Association of SIngapore and the
authorities will act against this firm. I have gone for talks by
other more reputable MLM companies and I ams sure the one Mr Lim
and I have been pressured into joining can be deemed illegal.
Lastly, I would like to appeal to all to be wary of this company,
which has an expensive-looking flash website and claims
international links. In fact, all it does is to emphasise
recruitment.
Lim Yan Ting (MS)
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Straits Times Forum, Jan 6 20004
Cops to probe multi-level schemes.
We refer to the letters from Mr Leow Zi Xiang (ST, Dec 30), Mr
Benjamin Tan, Mr Lim Jia Qing, Mr Tan Soon Meng, (ST Jan 1) and Ms
Lim Yan Ting (ST, Jan 3).
The Multi-Level Marketing (MLM) and Pyramid Selling
(Prohibition)Act prohibits multi-level business schemes, except for
those which satisfy certain conditions. Information on the Act and
Frequently-Asked Questions relating to MLM can be found on the
Ministry of Trade and Industry' website (www.mti.gov.sg) under
'Legislation";
The Commercial Affairs Department (CAD) of the Singapore Police
Force (SPF) investigates offences under the MLM legislation. We
request Mr Leow, Mr Lim and Ms Lim to contact ASP Mohd Shahri on
6557-5458 so that the SPF can look into the matter.
ASP Chua Chee Wai
Assistant Director (MEdia Relations) (Covering)
Singapore Police Force
Lim Chuen Ni (MS)
Corporate Communication Manager
for Permanent Secretary
Ministry of Trade and Industry.
