Governmental Warning on Multilevel Marketing Scam

by admin on June 12, 2011

Manipur state government warns public that multilevel marketing is considered illegal under their state laws. The government issued this public announcement due to the problems that have recently arisen about several companies in the area that collapsed after their financial network failed. The companies were all multilevel marketing based companies that were engaging in fraud. The companies according to the government were operating illegally based off the state laws of “Money Circulation Schemes”, meaning that the companies are not generating any new revenue but simply sending money internally to different people within the company itself. This means that the multilevel marketing company was not generating any revenue and not selling any products to deliver profit to the company, yet people within the company were making money. This type of scheme has been identified within many other states and countries as well. In the United States it is notoriously known as a Ponzi Scheme, which essentially takes the investors money in a multilevel marketing company in and redistributes it to the higher levels of leadership in the country accordingly. There is no new money brought into the company and everything will eventually collapse when the people at the bottom stop investing and bring it to the attention of the government. Giving money and receiving nothing in return is always a scam, and this is yet another demonstration of how multilevel marketing although it can look legitimate in this case was clearly not. Always do your research when looking at a multilevel marketing company to clearly see where the money is coming from.

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