The meltdown of US direct-selling giant Amway seems to have begun in Kerala with the arrest of its CEO William Scott Pinckney and two directors from Kozhikode on Monday. Police officials probing the case believe the amount of fraud detected is only a tip of the iceberg as Amway does country-wide operations.
And at the receiving end are a bunch of gullible housewives from the lower middle income bracket who have unwisely invested hard-earned money in this venture eying the quick returns promised by Amway.
Madhavikutty, 53, of Mukkam in rural Kozhikode had invested in Amway as a shortcut to multiply her money to construct a house. As her husband was bedridden, the income from her beauty parlour at Mukkam was the family’s only revenue. She came to know about Amway through her friend, who was a native of Pavangad in Kozhikode.
“The training sessions that I had attended were literally a magic world. Their words were so trustable that those who attend the class would definitely join the network. I also did join by remitting a fee of Rs 999 and became an Independent Awmay Business Owner (ABO) with Amway. Then, I attended similar sessions in Kochi, Thrissur and Coimbatore and had purchased products worth Rs19,000,” recollected Madhavikutty.
“During the training sessions, the company enticed us by introducing certain persons who had become millionaires by selling Amway products.
“They always compelled us to sell the products and recruit people to make money. I had bought almost 90 per cent of the products marketed by Amway. Due to the heavy pricing, we could not sell the products. And the company refused to accept the unsold products. In the process, I lost around `6 lakh, the amount which my husband had received while retiring from service,’’ she said.
Vishalakshi, 48, of Vengerimadom near Chathamangalam had invested Rs 3 lakh in Amway in terms of purchasing products and taking insurance policy.