A legislative framework will safeguard the interests of genuine organizations and also help distinguish them from fraudulent ponzi and pyramid schemes that operate under the garb of DS/MLM companies.
In a petition addressed to President Pranab Mukherjee, Prime Minister Manmohan Singh, Home Minister Sushilkumar Shinde and Finance Minister P. Chidambaram, the FDCI has also urged immediate intervention to protect genuine DS/MLM companies from the mischief of 'Prize Chits and Money Circulation Schemes (Banning) Act 1978 (PCMCS)' by excluding from its purview genuine companies that have been operational in the country for over 10 years now.
Despite various initiatives to amend the said Act and remove from its purview genuine product-sales based DS/MLM companies, the said Act continues to bring under its mischief genuine DS/MLM companies and authorities, in the absence of a clear legislation are unable to distinguish genuine companies from fraudulent ones and many times end-up harassing genuine companies and their representatives.
P A Joseph, General Secretary FDCI, said, "The Indian Direct-Selling Industry needs legislation today more than it ever did before. There are more fraudulent ponzi schemes operating today in the garb of DS/MLM and in the lack of clarity at legislative level, it is only getting tougher for genuine companies to differentiate themselves.
"The last two years have seen a steady dip in the overall industry performance, which has otherwise grown consistently in India and we believe this is principally because of the ambiguity that shrouds the industry currently. Amway CEO was recently arrested in Kerala and QNET faces probe in Maharashtra.
"RCM survived a nearly fatal probe in Rajasthan with similar stories for other DS/MLM in various states."
--IBNS (Posted on 19-12-2013)