When
a product claims to be good and the company aims to help people to regain
health, why then are the products not available on a cheaper scale instead of
going through certain parties which charges sky-high for the products or
membership.
Within the past few years, dozens of successors
commonly known as multi-level marketing (MLM) schemes have convinced people to
sell their memberships, products, health supplements, packages and more, only to saddle them with pathetic
inventories, credit card debts, and shattered dreams of "having it
all." We scoured the internet to bring you the best (or worse) of some
schemes highlighted.
You are not
building a real business with MLM. You don’t own the business. You don’t
own the website. You don’t own anything other than “product” that you
usually are required to buy from the company (for way more than it is actually
worth).
One of the
biggest fallacies with an MLM program is that you are actually building a
business, sucking in that next person to be your downline,
shamelessly promoting the products and services to your family and
friends, or even worse, have to buy the product yourself in order to remain
part of the MLM…which can get very expensive.
Most
Scammers aim in earning all the profits they can before they are being detected
as scams and closed down by the authorities. By then, the pioneers are laughing
their way to the bank, and looking into targetting more innocent (and greedy)
victims via innovative investment and MLM schemes. Some of the schemes claimed
to be legitimate and owned by a so-called Datuk and some were even listed on
the stock exchange.
You
can sometimes identify these “successful” Scammers and MLMers by the way they dress, the cars they drive,
the branded watches they wear. Take a look at how they flaunt their wealth and
talk about achieving
FOREX
SCAMS
The foreign
exchange (forex) investment scam normally require investors to invest in the
region of RM10,000 with the promise of receiving dividends. The companies’
traders show people holding huge amount of cash and encourage testimonials to
lure people to invest in the currency trading investment for big earnings.
 |
| The RM2.7 million cash seized by police from the home of one of the suspects in Bukit Ceylon in Dec 2015. – source : Malay Mail |
According to Bukit Aman Commercial CID deputy director Datuk
Hamza Taib more than 130 reports on crooked forex trading companies were filed
in 2015.
In Dec 2015, a forex trading syndicate, which embezzled some
US$8 million (RM33.8 million) from a Chinese national, was crippled by police
following raids in two separate locations in the Klang Valley early on Sunday
morning.
A seminar, which was organised by the syndicate’s foreign
partners, had offered returns of up to three fold on their original
investments.
GOLD
INVESTMENT SCHEME (OR SILVER, PLATINUM, OIL PALM, ETC).
There are many Gold companies which promises a Guranteed Fixed Income through hibah, interest, ROIs and a
guaranteed buy-back or exit scheme. Most of thes Gold Scams are nothing more
than ponzi scams.
The modus operandi is pretty much the same i.e.
you will get a payment / dividend / profit every month without having to do any
work. All you need to do is hand them the money and goyang kaki, then sit back
and watch the money roll into your bank account every month.
Remember the Genneva
Malaysia? The gold-trading business shut down this month by Malaysian
authorities for suspected illegalities may have raised as much as $3 billion
(RM10 billion) from its clients, a government minister said Wednesday.
Authorities raided trading firm Genneva Malaysia on 1st October 2012 on
suspicion of taking deposits illegally, money-laundering and tax evasion, and
later expanded the crackdown to three other firms.
The raids have sparked anger from thousands of clients of such
firms, who have petitioned authorities to let operations continue and have
threatened to hold anti-government demonstrations over the issue.
But authorities have defended the crackdown, and Deputy Finance
Minister Awang Adek Husin told lawmakers on Wednesday that Genneva Malaysia
alone had taken in some RM10 billion from customers.
In April 2016, Five
individuals and five companies linked to Genneva Malaysia Sdn Bhd were
acquitted by the Sessions Court yesterday of illegal deposit-taking and
money-laundering charges involving a total of RM12 billion. Yet, there were
complains of investors not getting their money back in return. So how now
brown cow?
HERBAL / HEALTH SUPPLEMENTS / MAKE-UP AND SKINCARE PRODUCTS
We have seen tons of products in the market capturing on their
healing powers, touching on nutrition, health and weight loss. Members, aka as
Distributors, are required to recruit new members into its distribution scheme
to earn more money, instead of selling products to consumers.
When people are desperate to earn quite money, or to treat a
certain ailment, distributors take the opportunities to talk about the goodness
of the products and the distribution business.
The
development of pyramid scheme by some make-up and skin care companies cleverly
targets SAHM and women looking for quick cash, an emotional support system and
perhaps most of all – empowerment.
Below here are a collection of lists of companies
that have been spreading around social
media on the unscrupulous dealings of the schemes that victims claimed were
sucked into.
YSLM –
UNDER CDTUP INTERNATIONAL SDN BHD
Owned by a self-proclaimed “future richest man in the world": Chinese national millionaire Zhang Jian in his
20s who came to Malaysia and set up a get-rich-quick pyramid scam was found to
be carrying out online business and claimed
investors had only to invest as little as RM300 for them to receive a return of
between RM2,700 and RM6,000 a month without having to work.
Zhang was said to have openly offered several
police officers money when they found more than RM50mil in cash, jewellery,
land deeds and bank accounts during the raid.
Zhang, who founded the controversial YSLM
multi-level marketing outfit, was reported to dupe people in China and Malaysia
of nine billion baht (RM900 million).
INVESTMENT
SCHEMES - SWISSCASH
Swisscash is an internet based investment scam which claimed
to have invested in a range of investments such as equities, commodities and
foreign exchange. Swisscash and Swiss Mutual Fund had been soliciting
investments from investors around the world, including the Malaysian public,
through the internet, offering returns of up to 300% within 15 months of
investment. Swisscash operated the scam through telegraphic transfer (TT)
and the Internet.
However, based on SC's enquiries
and investigations, this scheme is an illegal operation which has been unable
to provide these returns to investors.
SWISSCASH was the King of all and inspired similar companies to flourish.
Many members were left stranded with unpaid money when the company shut down.
SUNSHINE
EMPIRE
This licensed Company back then had an impressive office at the ground
level of KUB building along Jalan Yap Kwan Seng. Singapore’s Straits Times and
The Paper published news reminding their people to be careful and NOT to
believe in the company. People have complained that the company had stopped
paying back members with investors claiming to have lost their money in the
company.
The man behind Sunshine Empire, James Phang, has a dubious record of operating various scams. One of them involved investing in a resort in Batam known as Magic Kingdom.
GRI (GLOBAL ROYAL
INTERNATIONAL)
The
owner behind this scheme is non other than multi-billionaire James Phang, the
guy behind the Sunshine Empire Scam.
Prior
to Sunshine Empire, he operated NOP and SwishCash. He operated this business
remotely using various representatives and MLM leaders after his passport is
held by the Singapore government and he is not able to enter Malaysia. The bold
MLM leaders of the company in Malaysia visit his representatives in Malaysia or
Singapore to market the company.
PERFUMERY
PRODUCTS – LAMPE BERGER, BEL AIR
Lampe Berger (DCHL Sdn Bhd / RZ Corporation) MLM business is one of the most exploitative and shameless program in Malaysia. Bel-Air operated with the same intention and is no longer in operation in Malaysia.
This perfumery product from France with over 100 years history speaks
highly of their pretty bottles and fragrance
products falsely claimed by their MLM Business as an aromatherapy or air
purifying product.
Apparently, Hong Kong TVB aired a program that exposed their
scam but their members claimed that Hong Kong’s TVB apologised to the members
for the misinformation, but a view of that video doesn't show any clear apology on that part.
The MLM Business claims that some of the collector item’s
price would appreciate in future like collector’s antique. They would use this
to lure in more people to join. If that is true, has anyone successfully
sold their lamp with the appreciated price? Some even have stocks piling up like mountain in their home. So talk about
selling at an appreciated price?
Do note that the MLM members will go
all way out to lie in order to defend for their Company as they fear that they
will not be able to gain back in the money invested, knowing that the Company may
collapse. Understanding that the Lampe
Berger products are moving slow, they added a line of skincare products called Estebel,
which also claimed to have over 100 years history in France.
Their top earner Steven Yeam (SYN), eventually left (is it even a
surprise?) and started a new MLM company known as One Community World Wide.
ONE COMMUNITY
WORLDWIDE
The company, owned by Steven Yeam and Willie Lim who started the Lampe
Berger scheme targets the Malay market. Their main focus is selling mattresses
with negative ion for RM25,000, with other therapy package for RM300 onwards for those who can’t afford the
mattresses. Members can opt for colostrum products as well.
CAFE
SCAMS – ISLAND RED CAFE / STEVENS CORNER
Island Red Cafe collects RM6,000 from each members and promiss a 5% return monthly,
with your name listed in the ROC as a shareholder.
Stevens Corner, the famous indian coffee shop jumps on the bandwagon. They
collect RM3,000 per member and promise a
return of RM150 monthly with the intention to open a nice fanchisee cafe known
as StevensTeaGarden. Someone mentioned that they will make you sign an
agreement which included the rights of not paying you anything in future.
It is advised that you ask for a copy of the agreement and consult your
lawyer before paying. However, you may not get a copy of the agreement at all.
Both cafes collected monies from new members with MLM recruitment schemes to
pay the old members, just like the Sunshine Empire program. You will never know
when they will run away.
MOBILEWALLET
This Company, owned by 2 young men,
Stanley & Rey Gan with their office based in Queens Avenue Park, collected millions
years ago.
They had advertisement billboards everywhere and claimed that they have
tie-ups with Telekoms, Utility Board payment like Water & Electricity bills
and even fooled Maybank. They STOPPED paying
their members a few months ago and the members weren’t able to do anything as each
of them were made to sign an agreement, unaware of the company’s rights to stop
paying members by CHANGING terms and policies.
WATER
BUSINESS – SITO
The trick to this is promoting oxygenated and alkaline water products through
bottled water, filters or equipments. . One of the better known Company that
sold “oxygen” water is SITO (supposed to stand for Selangor International Trading
Organiszation with claims that the Selangor State Government owned some share
in it). The key person and founder is a Dato Robert Ong from Rawang but his
name is no longer in the business now.
Their products are sold for RM2 to RM3 for a 350ml bottle and now targetting
mostly in the Indian market. Their Chinese and Malays market are long gone
since a year or 2 ago. Their customers are made to believe that their water has
more oxygen and able to give miraculous effects for the body.
Latest news is that this SITO
Company is going to create a new label to market under a new Company since the
SITO name has already gone bad. Someone informed that this Company is owing
alot of money (due to refunds) to ex-stockists and refused to pay them back.
(An update stated that SITO has shifted to another place and their MLM business
is no longer in operation, but the company has plans to rebuild the business
again with a different name, beware !!)
CAR
FUEL BOOSTER – K-LINK
K-Link, the famous MLM Company that sold the footpatch TAKARA, later the
“cock-ring” and energy-card launched the patrol-saving pills for cars last
year. The products were hot selling that
grocery shops are also selling for them.
Many of the car ownerss that used the pills in their car have rushed to
workshops to clean the residual. Few months ago, another MLM Company launched a
fuel booster gadget that is attached to the cigarette lighter, with claims that
it could save up to 20% fuel. It started off well using a binary plan but
business began to fade away and most users found it to be NOT effective.
ENERGY PRODUCTS –
PENDANTS, BRACELETS, MATTRESSES, PILLOWS
They used all sorts of gimmicks and demonstration to make you believe in
the products. There were no proven
improvements for those who used the products.
HI-TECH
PRODUCTS– BIO-YOUNG, XKL
Names like bio-tech, nano-tech that millions of dollars of research
involved (eg Bio-Young and XKL few years ago) use the name and pictures of a highly acclaimed professor
behind them with words like “U.S.A.
formula”, “German Technology” or “Nanotechnology” to attract buyers.
When you ask for more details like the professor’s or factory’s address,
the answer given is that it’s “trade secrets with no further information
provided.
ENERGY / COMMODITIES
PRODUCTS – GOLDQUEST, QUESTNET
The company claimed to be a Hong Kong-based startup selling gold-plated
coins of “no value” for over RM2,000.
They have changed their business names and products several times from
QuestVacation, QuestNet and so on.
They have several offices in PJ and the key person (owner) is a Malaysian
Indian guy who was eventually arressted in Indonesia for having an involvement
in a huge Philippines scam. Most of their overseas offices are now dormant or
closed but their business in Malaysia is still trending with more “energy”
products.
NUMEROLOGY
AND FORTUNE TELLING – VISIBER
Imagine an MLM company selling fortune telling classes based on Numerology.
Prospects will be told that they need to buy a certain “number” between 1 to 9
in the form of pendants or bracelets made of stainless steel and gems which are
sold between RM600 to RM20,000.
Customers, or rather victims are mostly
females. Many similar companies targeting the gullible "believers" who believe in
numerology and fortune telling have since entered the market.
MJ-LIFE
This Company boasts of a very established background with many, many years
of history which is NOT true. Their people or associates may be long in
business but have nothing to do with
their MLM business launched recently.
New members are told to pay a sum of money (up to RM1000) but get NOTHING
for it. You will be given membership entitlements to enjoy the various
discouted and special price programs when you have medical check-ups in their
centres. They claim that all those check-ups cost more if they’re done
elsewhere. Unfortunately, it not entirely true. Only the naive and those unfamiliar
with medical check-up requirements will fall victims to them. Most members who
paid the money ended up with nothing.
SEAWEED
VENTURE SCAMS
The seaweed scam is pretty prevalent in Malaysia. One such company was
located in Taman Maluri, Cheras. You will be asked to invest a few thousand
ringgits for their business venture of
growing seaweed in East Malaysia and you are guaranteed returns.
To gain your confidence further, they will tell you your investment money
is secured by some “insurance” or “unit trusts” schemes with “trustees”. When
you ask for further documents to prove, all sorts of excuses will be given.
MGM / MXM
Owned by a Dato Kam (Pathlab), this scam targets young individuals. The
business was extremely successful in the beginning but the business dropped
once they changed their name to MXM after moving into their big 10-storey
office at Phileo Damansara.
A RM3,000 to RM4,000 fee is collected through credit card payment from
members. Payment can also be made through easy monthly installments. In return,
members will get an insurance coverage from Pacific Insurance that provides
hospital benefits and medical check-ups. They lure members by offering talks on
fitness, healthy lifestyle and other unscrupulous offers.
GANO
EXCEL / I-TOUCH LIFE / GEW2U
This company from the north is a copycat of DXN. selling Lingzhi capsules.
The Company called Gano iTouch tried to cash-in using online schemes similar to
e-Cosway after their Company went down the drain, selling Lingzhi products, energy
pendants of no-value and alkaline water gadgets. They even provided free
transportation to interested parties from KL to visit their Alor Star office
every weekend. In 2009, they changed their name to GEW.
NULIFE
(HK)
This Company founded/started by some HK people has been in Malaysia for
more than 10 years but flopped in Hong Kong and Malaysia due to bad management
and promoting a product using the name
of a prosecuted American named Dr Jeffrey Bland who was found guilty for making
false claims. When this case was leaked out in the US and many Malaysians found
out that the real boss in Hong Kong is a Steven Tang (an infamous conman who
cheated Malaysians in another scheme about 20 years ago) their business went
downhill. They then claimed that they were cheated by their
Malaysian partners.
AROWANA
FISH BREEDING
The arowana fish venture ask you to invest some money in breeding fishes and
give you fixed return continuously. This sounds really fishy. It sounds just
like many other investment schemes. You invest, you get monthly return. At the
end of the day, will you get your money back?
BIOFUEL
(KOMPLEKS MALURI)
Biofuel will tell you their Indonesia connections (just like Sunshine
Empire before using Taiwan). It was believed that the buifuel company operated
as a pyramid scheme, where new investors’ money are used to pay previous ones.
OORA
FROM GERMANY
Oora from Germany that marketed some bio-chips and a gadget that claims to
give energy and therapeutic effects of acupuncture, tai-chi, yoga, etc
depending on how you set the toy-like gadget and wear it on your body to get
the effects later. There were no given explanation or demonstration to prove
their effectiveness.
EASY-PHARMAX
One
of the biggest MLM scams in Malaysia, owned by a Dato Yeap with a false promise
that the company will use an e-commerce or online selling platform to transact
their goods and make profits beyond means. Members were tricked to invest up to
RM40,000. The promise was not fulfilled.
VACATION AND REWARDS
PACKGE – GENIUS THEME
Holiday
packages are being sold for RM499 to RM599 with a complimentary few nights stay
in Thailand or Bali. Started by a company named Max Generation, Genius Theme
sells their products to other companies and also famous companies like Sen
Heng.
Previously
Sen Heng gave the package away for free with purchase of products over RM2,000.
There were other hidden costs to be paid and it was never really free unless
more upfront fees were committed.
In
recent years, we have hear of new vacation packages that use the pyramid
recruitment scheme to get members to sign in and experience ‘”worldwide
travelling” for free. To enjoy free trips, there are terms and conditions set
out to go for your desired holiday destinations.
WORK
FROM HOME / INTERNET AUCTION
While this is not an MLM scheme, it is worth noticing that the largest percentage of Malaysian scam victims had fallened
for the Work-from-home fraud. Applicants are tricked into paying someone online
to help them start a business or undertake work but end up not receiving any
payment.
Almost a quarter had experienced Internet
auction fraud, where they purchase an item online and never receive it.
Based on a report from Telenor group as shown below,
46% of surveyed Malaysians have been an internet scam victim.
 |
| Source : Telenor Group |
Greed lures people into investing their life savings in investment
schemes by the promise of ridiculous returns.
Illegal or not, you judge for yourself. There is no stopping
anyone from joining any MLM, but don’t risk your reputation with the intention
to make money and cause others to fall into the trap.
If
you are involved in an MLM, you are not a bad person We are defined often times
in life by what we achieve and what we have, and having an internal
motivation to make money in the fastest time possible and make it just like the
people at the top of these pyramids (whose success stories they are alway
sold on).
You
may have good motives. Hoever, there are many opportunities out there that can
carry you far beyond any MLM program that will get you wrapped up and
swallowed.
People
need to be reminded of the 3 main points :
·
There is no such things as a free lunch
·
If a scheme is too good to be true, it's probably a scam
·
It's better to be safe than sorry.
In the Bank Negara Malaysia (BNM)’s website, a list has been compiled based
on information, complaints and queries received by BNM regarding the activities
of the persons and entities concerned.
The list is not exhaustive and the Bank
will update the list periodically from time to time. The list of companies and
websites which are neither authorised nor approved under the relevant laws and regulations
administered by BNM is intended to serve
as a guide to the public.
List of companies and websites [Updated: 07 June
2016]
