SOME GENTLEMAN ASKED THIS QUESTION TO ME ON QUORA AND HERE IS MY ANSWER.
Way back in 1998. when Amway India started its operations in India, one of my friends invited my family to attend the introduction programme of Amway which is presenting a good business opportunity. My wife and I attended the meeting. After fifteen minutes into the meeting, my wife announced that it was time to leave.
I asked her reason.
She explain ed that the products available at that time with Amway are not useful for regular day-to-day usage. Secondly, she is a lecturer and she could not think of peddling these products to friends and relatives visiting their homes to sell them. Thirdly, being a lecturer how could she ask her friends and relatives to become members of a scheme, which is outright looks like a racket. She clearly stated that it was not our cup of tea.
Though I was a law graduate by that time, I was not aware that there was an enactment called Prize Chits and Money Circulation Schemes (Banning) Act, 1978 which prohibits the chain schemes and ponzi schemes. Later I realised it is a bigger racket than it looked and started filing criminal cases against such companies like speakasiaonline, NMart, GoldQuest, Gemini Techno and scores of other fraudulent companies.
At that time only I learnt that a criminal case was filed against Amway and the AP High Court delivered a judgement stating that Amway’s business model is illegal. The beauty of the judgment bowled me out. It clearly stated as to how the business model is illegal and how the Amway is making easy and quick money and how it is inducing the members to join its 6–4–3 scheme with the promise of get quick rich.
Later, it was found out that there are several such companies including Herbalife, Tupperware, Oriflame, Avon, New York Max Life Insurance, and others under the umbrella of Indian Direct Selling Association. All these companies are doing the same business model and our spineless politicians remain mute spectators to the daylight loot of the country by these companies.
Finally, I wish to say one thing. One need not burn one’s fingers to learn that it is fire. Simple common sense is enough.