THIRUVANANTHAPURAM: After a brief lull, multi-level marketing (MLM) fraud has reared its ugly head again in the city. In the latest incident, the Museum police on Saturday arrested 10 people running a MLM company for allegedly assaulting three people, including two women, who had approached the company, demanding a refund of their investment.The incident took place on Friday evening at the company office in Plamoodu. The victims, hailing from Kochi, have been identified as Louis, 50, his wife Suma Devi, 40, and their daughter Anjali, 20. They are undergoing treatment at the Medical College Hospital.
Anjali had joined the MLM scheme and was told to buy some products to sell online to other people who join the firm under her MLM network. In due course, she was asked to deposit some money into the company’s account to purchase some products. Later, when her family raised doubts about the firm, they decided to get back the money. Thus, they visited the firm’s office to demand their money.
A heated argument ensued with a female executive of the firm and the promoters of the company allegedly assaulting the victims.
According to Museum police Sub-Inspector G Sunil, 10 people, including the staff of Team Oceanus, have been arrested and booked under Section 308 (attempt to commit culpable homicide) and Section 354 (assault or criminal force to woman with intent to outrage her modesty).
“Prima facie, we learnt that the firm is involved in fraudulent financial activities. Efforts are on to verify the records available in the office. Now, we have charged them for attacking women. In due course, we may file a case based on further findings,” Sunil said.The arrested were later produced before a local magistrate and remanded to judicial custody for 14 days.
Multi-level marketing
Multi-level marketing is a strategy that some direct sales companies use to encourage existing distributors to recruit new ones by paying the former a percentage of their recruits’ sales; the recruits are known as a distributor’s “downline”.
The distributors also make money through the direct sales of products to customers. However, the Reserve Bank of India has made it clear that acceptance of money under money circulation/multi-level marketing/pyramid structures is a cognizable offence under the Prize Chit and Money Circulation (Banning) Act, 1978. Members of the public coming across such schemes should immediately lodge a complaint with the police.