MLM industry hopes to pick up after Sunshine Empire saga

by louabbott on October 27, 2009

Source:  Saifulbahri Ismail/Evelyn Choo, Channel NewsAsia

This article properly identifies one of the causes of the bad reputation of MLM (multilevel marketing).  It is that people, including journalists who write about the industry, don’t know the difference between legitimate MLM companies and illegal pyramid schemes or other types of fraudulent operations.

SINGAPORE: The Consumers Association of Singapore (CASE) received more than 160 complaints against multi-level marketing (MLM) firms between January and September this year, which is more than double the number received during the whole of 2008.

Three directors of MLM firm Sunshine Empire are currently on trial for running a fraudulent company, falsifying accounts and making false capital declarations, and the saga has left a scar on the industry.

We feel that all these bad apples are tainting the industry, so much so that the livelihoods of half a million people who are involved in the industry are put at risk. So we are committed to weed them out,” said Leo Boon Wan, chairman, Direct Selling Association of Singapore (DSAS).

DSAS has teamed up with CASE in a bid to improve the direct-selling industry.

The organisations have submitted joint recommendations to the Ministry of Trade and Industry on amendments to the Multi-level Marketing and Pyramid Selling Act – which oversees direct-selling in Singapore.

These include simplifying definitions, identifying the types of products under the MLM umbrella, and providing investment tips for new marketers.

Seah Seng Choon, executive director, CASE, said: “In a recession, there will be more people jumping into the industry and trying to sell the products and services.

“In hard times like these, I suppose the agents will try to sell harder and there will be complaints of pressure-selling and agents visiting the estates more frequently.”

CASE and DSAS will be organising a public forum on direct-selling next week, as part of efforts to educate consumers and increase awareness.

Bold emphasis is ours.

How can you tell the difference between an illegal pyramid and a good MLM?
See Pyramid Schemes vs. Legal MLMs

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