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Sri Lanka Equity Forum » Stock Market News » New network marketing scams spread their wings countrywide

New network marketing scams spread their wings countrywide

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sriranga

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Co-Admin
By Bandula Sirimanna

Though the controversial GoldQuest pyramid scheme appears to have collapsed in Sri Lanka, the Central Bank (CB) says that new ‘pyramid style’ network marketing offering various products are operating countrywide misleading the public and authoriies.

A senior CB official told the Business Times that under the new Finance and Banking law, stern action would be taken against network marketers operating fraudulent, endless chains which include pyramid or Multi-Level Marketing (MLM) schemes.

He said that it was investigating new complaints of classes being conducted in certain parts of the country to promote these schemes and trying to identify those responsible for such scams. The CB recently investigated the business activities of Global Lifestyle Lanka Ltd, an agent of a wide range of environment friendly and zero carbon emitting products, such as solar panel lighting systems, and high quality wrist watches, etc.

Investigations revealed that the activities of this company were suspicious and the full report on this has been sent to Attorney General’s Department for further action. Parliamentarian Wijeyadasa Rajapakshe, also President of the Bar Association of Sri Lanka, has brought to the notice of the Inspector General of Police that this company is operating an MLM scheme using their agents to mislead the public.

In a letter, he stated that he came to know from a disgruntled victim of the alleged scam in Anuradhapura, that this company is using his name as their legal consultant to attract more customers to their illegal net. He noted that this person has filed an affidavit outlining details of the alleged scam, and has requested the IGP to conduct investigations into the activities of the company and to take legal action.

Global Lifestyles Lanka Ltd Director, Priyantha Perera denied the allegations and said they are carrying out a legitimate business.
He disclosed that he started his business in 2009 and now has 7,000 agents countrywide. Of them 3,000 are operating in the North and East.

He pointed out that the company uses teams, word of mouth and support of the communities to sell their products and services.
He told the Business Times that the management of the company was conducting its own inquiry to see if anyone had used Mr. Rajapakshe’s name while canvassing customers and that the company had no connections with the latter. He said that he has not received any complaint from customers for cheating as they deliver their products through courier service soon after the customer pays money to the company bank accounts maintained at Commercial Bank and Seylan Bank.

He added that the company has introduced unique products, assisting local entrepreneurs by launching their products to the market. Many customers who bought this product automatically became a sales representative of the company, after promoting the product to their neighbours.

“Our solar power products have uplifted the lives of many people in rural areas especially those living in the areas deprived of electricity,” Mr. Perera said. He revealed that the company charges Rs. 1,000 from those who are willing to become their representatives to provide necessary guide lines and then they are given a kit containing details of company product and services and other relevant instructions.
http://www.sundaytimes.lk/120624/business-times/new-network-marketing-scams-spread-their-wings-countrywide-3824.html



Last edited by sriranga on Mon Jun 25, 2012 1:26 pm; edited 1 time in total

http://sharemarket-srilanka.blogspot.co.uk/

soileconomy

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Vice President - Equity Analytics
Vice President - Equity Analytics
Everyone needs to understand the key features of these pyramid schemes.
Then only we can be more vigilant.
Now these people promote their business mainly talking about advantages of their products and later comes to attract new members.They are very cunning attracting members in such a manner.
If we go by the central bank guidelines it will help to identify such companies.
Normally it is managed by rich businessmen(at the Top) , but many members are poor people.(Bottom)

Redbulls

avatar
Director - Equity Analytics
Director - Equity Analytics
@soileconomy wrote:Everyone needs to understand the key features of these pyramid schemes.
Then only we can be more vigilant.
Now these people promote their business mainly talking about advantages of their products and later comes to attract new members.They are very cunning attracting members in such a manner.
If we go by the central bank guidelines it will help to identify such companies.
Normally it is managed by rich businessmen(at the Top) , but many members are poor people.(Bottom)

That's the fact.

CSE.SAS

avatar
Global Moderator
Time to time new schemes introduce by culprits.
Public should be educated on these issues.
Timely article from Sunday TTimes.

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