THE MLM & ME SINGAPORE

miloud mil
Aug 9, 2017 · 6 min read

The MLM and me, its a long story that i should write, since 2000 until today, I have been attending, listening ,learning and communicating in many platforms under many company names, the problem here is what is MLM at 1st place and why it is sort of scam and it doesnt work for many people like me? even though i still want and dream to me successful doing it and to be that “YOU” in the diagram below:

1- Definition:

What is Multi-Level Marketing (MLM) and Pyramid Selling?

A Multi-Level Marketing or Pyramid Selling scheme will typically require participants to pay an upfront charge. In return, the participants are promised financial rewards for each additional participant recruited, as well as all new participants who are in turn brought in by their recruits — hence the pyramid-like structure.

As more salespersons are recruited, participants hope to recover their upfront charges and earn sizeable profits. However, such a pyramid schemes will eventually collapse when they run out of new recruits, resulting in those salespersons at the bottom of the pyramid losing all their upfront charges.

In the interest of consumer protection, the Government’s regulation effort is targeted at preventing the proliferation of such high-risk schemes.

2- Is it legal?

How are MLM activities governed in Singapore?

MLM activities in Singapore are governed by the Multi-level Marketing and Pyramid Selling(Prohibition) Act. The Ministry of Trade and Industry administers the Act.

The original Multi-Level Marketing and Pyramid Selling (Prohibition) Act was first passed in 1973. In June 2000, Parliament approved an amendment to the Act to widen the definition of pyramid selling to catch all business schemes that were multi-level in nature.

However, as not all multi-level marketing techniques are undesirable, the Government concurrently enacted the Multi-Level Marketing and Pyramid Selling (Excluded Schemes and Arrangements) Order (hereafter, referred to as the ‘Exclusion Order’) to exclude legitimate businesses from the Act, such as insurance companies, master franchises, and direct selling companies which fulfill certain criteria. This Exclusion Order was implemented in June 2000.

3-Why should i pursue this dream?why?

So Why in SINGAPORE law there is an Exclusion Order for some MLM?

Not all multi-level marketing techniques are undesirable. There are legitimate businesses using innovative sales tactics, and should not be lumped together with pyramid schemes.

Hence, the Government enacted the Multi-Level Marketing and Pyramid Selling (Excluded Schemes and Arrangements) Order (hereafter, referred to as the ‘Exclusion Order’) in June 2000, to exempt legitimate businesses from the Act. The following categories of businesses were exempted:

(1) Insurance businesses that are registered, approved or licensed under the Insurance Act, the Insurance Intermediaries Act 1999 and the regulations made thereunder;

(2) Master franchise schemes and direct selling schemes which satisfy the following conditions:

  • The benefit received by any promoter or participant is as a result of the sale, lease, license or other distribution of a commodity and not as a result of the recruitment of additional participants;
  • The promoter of the scheme shall not knowingly make false or misleading representation or omission relating to the scheme or the commodity;
  • The promoter shall not make any representation on the benefits other than those allowed;
  • There should be a clearly stated policy on refund or buy-back guarantee.

After the Exclusion Order was enacted in 2000, the Government received feedback that the provisions in the Exclusion Order were not sufficiently clear. Some members of the public were also confused by claims of legitimacy by companies and often requested for the Government to clarify if particular schemes were legitimate.

In response to the feedback, the Government reviewed the Exclusion Order, and subsequently amended the Order in 2001.

4. Why is there a need to amend the Exclusion Order?

As a result of developments in the market and suggestions from the public, the Ministry of Trade and Industry, in consultation with the industry, and taking into consideration the public’s comments, has come up with a revised MLM Exclusion Order.

5. What were the amendments made in 2001 to the Exclusion Order?

The Exclusion Order 2001 continued to maintain that insurance companies and master franchises would be excluded from the MLM Act.

However, it also introduced the following rules for direct selling companies:

  • Safeguards — A participant cannot be required to provide any benefit or acquire any commodity in order to become a participant in the scheme, other than the purchase of demonstration equipment which is not for resale, at no more than cost price and for which no commission can be given out. A legitimate multi-level marketing scheme would not impose a financial risk on salespersons. For example, salespersons should be entitled to full refunds, under reasonable commercial terms, for any inventories kept or purchased by them which are not sold to end consumers, so long as the inventories are returned within a period of 60 days.
  • Behavioural checks — The companies must not misrepresent the scheme as get-rich-quick opportunities, and should not use fraud, coercion, harassment, or unconscionable means to force people to join the scheme. Instead, the companies should focus their efforts on promoting the quality and features of the products. If a company wishes to show potential participants the earning potential, they must keep records of the maximum, minimum, mean, mode and median earnings of their salespeople in the past.
  • Sharing of commission — It is all right for a salesperson to share commissions from several layers of salespersons recruited by him. However, such commissions must be generated by sale of the product or service in question, and not through the recruitment of additional participants into the scheme.
  • The amendments to the Exclusion Order were published on 14 December 2001, and came into effect on 01 January 2002.

6-How safe or harmful to be an MLMer?

What are the penalties for being in breach of the MLM Act?

During the review of the MLM Act in Year2000, the fines were raised from $30,000 to $200,000. Currently, a conviction under the Act will result in a fine of up to $200,000 or to imprisonment for a term not exceeding 5 years, or to both. The fines are for the following offences:

  • promoting or participating in a multi-level marketing, or pyramid selling, scheme or arrangement.
  • registering a business which is designed to promote multi-level marketing, or pyramid selling, scheme or arrangement.
  • registering a company which proposes to promote multi-level marketing, or pyramid selling, scheme or arrangement.

In addition, the Act empowers a Court that convicts a promoter or participant of a multi-level marketing or pyramid selling an additional penalty of an amount not exceeding the amount or value of any benefit which the promoter or participant has received. This additional penalty ensures that the Act serves as an effective deterrent to potential offenders.

What would happen to “innocent victims” who participated in pyramid schemes unknowingly, and who did not benefit in any way before the scheme closed down?

Under the Act, all persons who participate in multi-level marketing or pyramid selling would commit an offence. This is because the participants would have played an active but destructive role of attracting others into the scheme. We believe that this is the best way to deter the potential promoters of such schemes.

Hence, we would urge the public to be extra careful and to exercise due diligence when deciding whether to participate in business schemes. They should be doubly suspicious of get-rich-quick promises. If they believe empty promises and hand over their money to the promoter, chances are they will be cheated of the money. At the same time, they might be guilty of committing an offence as they are participating in an illegal scheme.

CONCLUSION:

Being a consumer of a good health product that really empower you and save you some health troubles,and maintain your lifestyle,your look and/or using a service that benefit you, your family and friends, regardless to the value paid, there is a full satisfaction of the said product and services.

for theses reasons i recommend everyone to feel safe and enjoy being one of the authorized MLMs in Singapore, and dont mind to share with friends or any others interested to have same benefit as you do, without making the other part feel any pressure to join or any regret after joining…and thats should be the way to keep friendship safe and perpetual.

One happy thing is happening in most MLM families is that really feel in a family environment, lot of humble friends, knowledgeable,kind,helpful and talkative…and yes…its a place to find good friends and share many topics out of the MLM things, and even can share individual experiences,start discuss or plan for other real businesses .

references:

Where can one obtain the amended Exclusion Order?

The full text of the current Multi-Level Marketing and Pyramid Selling (Excluded Schemes and Arrangements) Order can be accessed at the MTI website.

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade